1.2 CSR as a business strategy
It is about supporting the state industrial and environmental
protection policies. CSR protects and improves the natural ecological
environment and supports the sustainable development of society.
CSR is defined as the economic, legal and ethical
responsibility that financial institutions assume in their dealing with
shareholders, employees, consumers, business partners, government and the wider
community to improve the quality of management. As globalization accelerates
and large corporations are serving as global providers, CSR programs have been
progressively recognized through the benefits they provide in various
locations. CSR functions as a built-in self-regulating mechanism whereby
business monitors and ensures its active compliance with the spirit of the law,
ethical standards and international norms.
In short, Implementing CSR in a company refers to linking
itself with ethical values, transparency, employees' relations, compliance with
legal requirements and overall respect for communities in which they operate.
So, because of the importance of business ethics in the modern economy, it is
absolutely necessary for managers and stakeholders to understand CSR and
implement it correctly.
Furthermore, CSR is a concept which supports organizations to
look at society's interests by being responsible for the impacts of the
organization activities on customers, employees, shareholders, communities and
all environmental aspects.
This management process has both inward and outward
dimensions:
· The inward dimension refers to the human resources
management, health and safety at work, adaptation to change, management of
environmental impacts and natural resources.
· The outward targets are local communities, business
partners, suppliers, consumers, human rights and global environmental
concerns.
1.3. CSR basic principles
CSR as a new strategy adopted by financial institutions aims to
preserve several bases and principles economically, socially and
environmentally.
1.3.1 Theoretically
· Respect for human rights: a company should make sure that
operations are conducted in accordance with basic human rights standards.
· Contributing to sustainability: to ensure that
business practices contribute to a longterm economic and social development.
Companies should work with government and civil society to define roles and
responsibilities for social development.
· Diversity: company should pay attention to the rights,
requirements and cultural integrity of indigenous people affected by its
operations.
· Dialogue: A responsible of a company should open a
dialogue with stakeholders to make sure that their activities are properly
adapted to meet local conditions and guarantee benefits for both the company
and the community.
· Integrity: a company should have a fair and honest
dealings
1.3.2 Practically
· Reporting: the company should report on important aspects
of the social impacts of their business.
· Anticipating issues: stakeholders should be identified
and consulted before any major commitments are made or significant resources
are allocated to ensure that the company acts in accordance with CSR
principles.
· Social impact assessment: the company should
evaluate whether and to what extent social impact assessments should be
conducted as a basis for making business decisions.
· Community investments: opportunities for implementation
through partnerships with government and civil society organization should be
actively explored.
· Partly owned companies and other business
relationships: contributing to improve supplier standard, adequate procedures
for monitoring, evaluation ad or selection of suppliers reflecting the
companies' social responsibility principles should be developed.
1.4 The objectives of CSR
The following are some of the goals the CSR aims to reach:
First, it aims to minimize the negative effects operating in
conflict (disagreement sphere) while maximizing positive contributions to these
areas. The key is to develop strategies that can address company goals to
maximize and maintain sustainable profits and investments. So, it is necessary
for the company to consider how they can increase both transparency and
accountability in their operations to avoid negative social, political and
economic effects. Secondly, CSR intends to promote health and safety. Finally,
it highly takes into consideration the protection of the environment.
Those goals could be reached by
· Extinguishing practices that harm the public sphere, for
example: child labor, hazardous substances, resources usage...
· Being committed to the internationally-agreed
conventions which aim to protect the environment and provide basic social
services like Non Governmental Organization (NGO) ,) The Organization
Co-Operation and Development (OECD).
· Integrating public interest into corporate decision
is making to serve the triple bottom
line: people, planet, profit and to help advance social and
economic well being and enable people around the world to realize their full
potential.
1.5. CSR in Banking
Banks are generally large companies that have powerful
impacts on the economic sector. Their profession leads them to play a key role
in managing the social and environmental impacts of their activities on the
companies that benefit from their financing. For the past fifteen years, this
unique responsibility has been gradually integrated into the bank practices,
particularly at the request of civil society and donors. In addition CSR in
banking is about organizing economic, social and environmental efforts of the
bank, based on persisting stakeholder engagement and aimed at supporting
business strategies and minimizing risks. Therefore, it should be guided by
those transparency, dialogue, reliability and flexibility. CSR commitments in
banking are divided into three major areas:
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