INTRODUCTION:
Corporate social responsibility is the continuing commitment by
business to achieve commercial success in ways that honour ethical values,
address legal issues and contribute to economic development while improving the
quality of the workforce and their families as well as the local community and
society at large. Indeed, the idea of social responsibility is not new to this
age; rather it has been around as long as businesses have existed. Sometimes it
comes in the shape of caring owners who provided housing, paid the workers who
are off due to sickness or otherwise in form of attempts made to provide ease
and comfort to the employees lot. Although many such voluntary social measures
have become legal requirements, a number of business leaders have gone further
ahead by utilizing their wealth to improve the living conditions of many people
in the society. Simultaneously, a shift is already occurring from traditional
philanthropy to wholesome community development among the more progressive of
the companies. Financial System is the most important institutional and
functional vehicle for economic transformation of any country. Banking sector
is reckoned as a hub and barometer of the financial system. As a pillar of the
economy, this sector plays a predominant role in the economic development of
the country. Thus the banking sector has been playing a significant role as
growth facilitator. In recent years corporate social responsibility has become
an important issue at global level. The concept of corporate social
responsibility recognizes as commitment of an organization to operate in a
socially responsible manner. It takes into consideration the social and
environmental implications of corporate financial decisions. It is also
associated with corporate governance and ethical business procedure. The three
keys to an effective CS R policy are commitment, clarity and congruence with
corporate values. Clarity is all-important because social responsibility is a
broad term, and it needs to be debated and hammered out to meet each company’s
circumstances. Congruence is about ensuring that the company’s attitude to its
responsibilities towards society is consistent with the way in which it runs
the whole business, i.e. its values and culture.
An important aspect of corporate social responsibility is
Sustainable Development. It is broadly defined as the advancement of economic
development while maintaining the quality of environmental and social systems.
Incorporating Environmental & Social (E&S) issues into development is
important because environmental resources provide a basis for social and economic
development. The principles of sustainable development are important in all industrial
and commercial sectors, as all activities have the potential to influence
social and
environmental welfare quality. The financial sector is of
particular importance, as this sector is able to affect many projects and the
development trends that result from them.
DISCUSSION:
Banks should make sure that the companies for which they are
financing or investing incur the risks that the impacts due to their
anti-environmental acts create can be legal, financial, and reputation al, and
banks themselves are increasingly accountable for the effects their portfolios
have on the environment and society.
According to me banks are not fulfilling there duty of corporate
social responsibility because of lack of resources and certain ups and downs in
the market. The financial institutions have to see the environmental and social
sustainability of the projects of the company, coming for financing. Banks
should charge extra fees or fines from companies which are causing
environmental harm to the society.
CONCLUSION
Banks are beginning to recognize that they have a social
responsibility to fulfill as they emerge from the shadow of traditional
banking. As per Relatively indirect nature of their environmental and social
impacts, banks need to examine the effects of their lending and investment
decisions. Incorporating environmental and social criteria into business
decision making can reduce the impacts of operating activities.
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