CORPORATE SOCIAL RESPONSIBILITY IN THE FINANCIAL SECTOR :
The institutions representing the financial sector like banks, mutual funds and other institutions. like other corporate sector players contribute significantly to the community development in many ways. International Financial Corporation (IFC) an affiliate of the World Bank, International Chamber of Commerce (ICC) and United Nations Organization (UNO) are participating in the various projects across the world. They are motivating banks and financial institutions to play an effective role in promoting environmental protection and social sustainability through these projects. In this respect, the financial institutions and banks are encouraged to follow certain principles in respect of CSR
(a) Commitment to sustainability: FIs should expand their mission of profit maximization to a vision of social and environmental sustainability. To achieve this FIs should integrate the consideration of ecological limits, social equity and economic justice into their corporate strategies and into their core business models.
(b) Commitment to ‘Do No Harm’: FIs should prevent or minimize harm to the environment
(c) Commitment to Responsibility: FIs should take full responsibility for the environmental and social impacts of their transaction
(d) Commitment to Transparency: FIs should have transparency in their policies and business dealings
(e) Commitment to Accountability: FIs should be accountable to their stakeholders and the community where they operate. FIs should promote economic development through their CSR activities
(f) Commitment to good governance: FIs should frame good corporate governance policies and follow them in letter and spirit.
Quite often we come across many news pertaining to the CSR activities of banks and other players in the financial sector.
Some examples of CSR activities are:
Environment protection: Going Green is an eco friendly initiative not only to protect the environment but also to encourage younger generation to ensure such initiatives would lead to a better life around us. Some of the green initiatives include eco friendly e communication, banks and companies forwarding the annual reports by electronic mode (saving reams of papers for printing reports to the shareholders) Saving the globe from different kinds of pollution such as water, air, noise. etc.
Health Care: Many banks and other financial institutions including government organizations are keen in ensuring better health care facilities are provided for the needy persons. They organize regular blood donation drives, free medical checkups, donating ambulances, sponsoring free medical camps in remote villages.
Education: Educational services occupy an important position in CSR activities of organizations. Many organizations are promoting community schools, colleges. Scholarships are offered to many deserving students.
Social Causes: Many banks offer help and financial assistance through their CSR programs to assist weaker sections of the society for a better future.
Apart from the above many employees of the banks and other institutions, are very active in their contribution for the community development and these can very well be considered as part of Corporate Social Responsibility in view of the fact that each person is a stakeholder in one respect or another.