|Over the past few years, a rising emphasis has been placed on banks’ Corporate Social Responsibility (CSR). But what does CSR mean anyway? This is indeed one of the most frequently asked questions for all those dealing with CSR matters.
A simple definition refers to CSR as how banks take into consideration the impact on society of their operational activities. Consequently, it requires a built-in, self-regulating mechanism whereby banks would monitor and ensure their adherence to law, ethical standards, and international norms to produce an overall positive impact on society.
Largely, the banking industry does not realize the central importance of having a defined CSR policy. Many banks do not fully understand the worth of CSR. Yet, there are banks that do well in this area.
There are obvious and real gains on hand for banks which have well-designed and successful CSR strategies. The advantages for banks lie in the following areas:
– Encourage sustainable behavior by customers;
Community involvement is the basis of all accomplished CSR policy initiatives and extends far beyond the standard charitable measures. Banks would normally introduce innovative CSR schemes such as:
– permanent learning programs for disadvantaged sectors of society;
It is essential that there should be a transparent and strong commitment to adoption of CSR practices. This can be reached through explicit reference to CSR activities adopted by banks through dedicating sections of Annual Reports to CSR matters or by publishing Sustainability Reports and/or policy statements on CSR.
It is important to note that corporate sustainability for banks is much more than mere charity. In this context, banks are encouraged to improve the future of the people in all communities they operate through CSR programmes, which in turn will sustain their business in the future.
Just like other business sectors, the business of banking has a direct impact on the environment through consumption of paper, energy, waste management and means of transport used. Direct environmental impact can be reduced by keeping environmental order in banks themselves, through limiting the consumption of energy and paper, ensuring good waste management and requiring suppliers’ to conform to environmental standards. A bank can minimize the impact in a systematic manner through implementing an environmental policy; it can even go further and apply for environmental certification in accordance with ISO 14001.
The market in which banks operate today requires new range of products targeting new customer segments including groups who are not yet fully integrated in society, and not dealing with banks such as low-income families and micro businesses operating in poor areas of the country.
This situation represents for banks a challenge in terms of designing suitable products for these distinct segments, and the opportunity to develop a new type of business beneficial to all. Some good examples of responding to the challenge would be microfinance and financial education.
Banks are encouraged to promote financial education projects involving different target groups. This can be achieved in two ways. Firstly, by concluding agreements with strategic partners which are recognized by the target groups in order to inform them better on financial services and products which they will use in their daily life. Secondly, by developing contacts with the local authorities towards certain target groups. These target groups include primary schools, secondary schools, higher education, universities, and the general public world.
In 2010, the bank established CIB Foundation as a non-profit organization dedicated to enhancing health and nutritional services for underprivileged children in Egypt. The Foundation focuses on sustainable development initiatives that result in positive, long-term outcomes. The bank increased the percentage of its net annual profit to the Foundation to 1.5%. One hundred percent of the donations made to the account go towards the implementation of development projects for children.
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