UGB264 Business Ethics, Responsibility and Sustainability (GC01678)

Table of Contents

1.0      Introduction.

2.0      Examine and discuss the key challenges relating to corporate responsibility and sustainability in the banking sector

3.0      Corporate Social Responsibility.

2.2 Benefits of implementing CSR in the banking sector

2.3 Challenges relating to CSR and sustainability in the banking sector

4.0      Analyse and explain what is considered to be ‘best practice’ within the banking sector

3.1 Corporate Social Responsibility, Ethics, and Banking Sector

3.2 CSR and Ethics in the Banking Business: Myth or Reality?.

5.0      Recommendations for businesses in the banking sector

5.0 Conclusion.

References.

1.0  Introduction

This paper is about Corporate Social Responsibility in the banking sector. At present, the practice of CSR and Sustainability in business activity is very popular. According to recent research, it is found that businesses are investing more in social and ethical creativities. By implementing CSR in business, companies are able to increase their growth rapidly. Besides companies are able to build strong brand images. The implementation of CSR provides positive impacts on the social and political environment of the business (Hopper et al., 2018). In this paper firstly the concepts of CSR are explained. After that, the benefits and the challenges of implementing CSR in banking sectors are discussed. The sustainability of CSR in banking sectors is also described in this paper. Various ethical factors and their consequences are also focused on here. Different myths and realities of the impact of the practice of CSR are outlined in this paper. And finally, some recommendations for the banking sector for successful implementation of CSR are discussed in this paper.

2.0  Examine and discuss the key challenges relating to corporate responsibility and sustainability in the banking sector

2.1 Corporate Social Responsibility

Corporate Social Responsibility can be defined as a management idea where the social and environmental apprehensions related to the company’s actions and performances are integrated with their stakeholders. According to the Triple Bottom Line Framework, CSR is a method in which a balance of economic, environmental and social practices a company can be achieved by fulfilling its shareholders’ and stakeholders’ expectations instantaneously (Collins, 2018). Corporation has various purposes including producing goods and services to fulfill economic and social needs, creating better employment, producing feedbacks for shareholders and creating a positive contribution to the physical and social environment (Collins, 2018). CSR is a form of charitable program. It helps the company to create a better engagement with society. Economic priority is the main goal of the shareholder. Maximization of the shareholders is the main focus to gain economic stability. The economic, social and environmental aspects of business are surrounded by the evolution of shareholder attitudes towards the threefold method (Collins, 2018).

2.2 Benefits of implementing CSR in the banking sector

As the banks are facing challenges to build devoted teams, CSR implementation is costly for banks. Besides they also face challenges to manage the evolution process. By implementing CSR programs, the financial performances of the companies have increased rapidly (Hopper et al., 2018).

In accordance with Hopper et al. (2018), there are two logical causes required to explain the high performance of ethical firms. The first reason is that the companies which are willing to implement CSR are vigorous firms. They are determined to build the future according to the latest social and environmental challenges. The second reason is that CSR is an opportunity of creating new business and implementing CSR helps the firms to attract more investors and creates growth opportunities. In the last decade, the demand for implementing CSR in business is growing gradually. As the demand for Social Responsible Investors (SRI) is growing rapidly, the managers are creating a large range of SRI funds. According to a survey released by the Global Sustainable Investment Alliance, in 2014 SRI assets under management were a total of $21.4 trillion. In Europe, it was 63.7%. Around the world, the SRI assets are increasing rapidly. At present Europe is the most mature and competitive market for SRI investment. On the other hand, Asia needs more improvement in this area (Hopper et al., 2018).

2.3 Challenges relating to CSR and sustainability in the banking sector

In the banking sector, there are two major challenges for additional improvement of SRI and CSR (Martin, 2019). The first challenge is that sometimes CSR and SRI may not be associated. There may be a situation to choose over one another. Some companies may outfit SRI to meet the SRI requirements rather than implementing CSR. In order to increase investor confidence, many companies are trying to develop their sustainability performance. This can occur if the investment is based on the company’s ESG rating. CSR and SRI are related to each other and influenced themselves. The second challenge is regulation. The regulations of the governments on social and environmental investment have outlined the guidance of the business operations. According to the new regulations the operations of the business will be influenced. The profit, cost and investment of any business are greatly affected by the regulations. The companies must operate according to the regulations otherwise the business can be failed to fulfill the demand of implementing CSR and SRI (Martin, 2019).

According to Walker (2016), the banking sector must depend on the regulations of the governments as the regulations affect social and political factors. The existence of the banking business depends on the regulations. The commercial banks have their individual private account source and thus create a private-public hybrid. Finally, the citizens are responsible for the management of the large banks as the debt of the banks is paid by their taxes (Walker, 2016).

The privately-owned commercial banks are willing to convey the system of state guarantees (Oliver, 2017). This makes a bad position for them to the creditors and the probability of gaining sufficient performances. For this reason, banks have to build their private functional guarantee systems. The standards of assessing the ownership structure of the commercial banks cannot be provided by the state banks. And in this context, the opinions of government regulations are completely reasonable. In the global and financial crisis situation, the politicians are putting additional pressure on the implementation of the regulations in banking sectors (Oliver, 2017)…………….

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