THESIS REPORT ON Present and Prospect of Corporate Social Responsibility: A Study on the Banking Sector of Bangladesh

EXECUTIVE SUMMARY

The banking system plays a critical role in underpinning economic development. Banking  sectors of Bangladesh has shown a great success in all areas of operation with a view to improve the socio-economic development of the country.

Awareness of issues in socially and environmentally responsible business and organizational practices is increasing among users of  financial services in Bangladesh. Banks and  financial institutions will therefore be well advised to adopt CSR practices in formal, structured manner inline with global norms. Socially and environmentally responsible practices will, besides fulfilling the moral obligations involved, also help preserve competitive edge in client bases sensitive to these concerns. Further, the disadvantaged population segments aided by social responsibility initiatives will hopefully constitute their future new client bases.

This study reviews recent CSR activities of banks, in light of the BB guidance circular issued in June 2008 for mainstreaming CSR practices in the  financial sector in Bangladesh. The financial sector in turn can contribute hugely by catalyzing CSR practices in their real sector corporate clients, promoting inclusive economic and social development. I hope this report will be useful for banks and  financial institutions in learning from each other’s examples.

 Contents

Chapter-1: Introduction      

                                                                                          

1.1	Origin of the study	1
1.2	Rationale of the study	1
1.3	Objectives of the study	1
1.4	Methodology	2
1.5	Limitation of the study	3

Chapter-2:  Theoretical Review

2.1	Corporate Social Responsibility	4
2.2	Potential Business Benefits	5
2.3	Human Resources	6
2.4	Risk Management	6
2.5	Brand Differentiation	7
2.6	Review of Literature	8

Chapter-3: Overview of CSR in Bangladesh

3.1	Introduction	10
3.2	CSR in Historical Perspective	13
3.3	CSR Implications to Business Activities	14
3.4	CSR as Community Development	14
3.5	CSR Applications and realities in Bangladesh	17
3.6	Prospects and Future of CSR	17
3.7	Good Governance and CSR in Bangladesh	19

Chapter-4: CSR practices in banks: An Analytical Review

4.1	CSR Expenditures by Banks	20
4.2	Financial Inclusion	20
4.3	Social and Environmental Improvement	21
4.4	Reporting CSR Initiatives	23

Chapter-5:  Some CSR Initiatives taken by the banks

5.1	CSR Initiatives by AB Bank LTD	34
5.2	CSR Initiatives by BCBL	34
5.3	CSR Initiatives by BKB Ltd	37
5.4	CSR Initiatives by Bank Asia Ltd	40
5.5	CSR Initiatives by BRAC Bank Ltd	43
5.6	CSR Initiatives by Dhaka Bank Ltd	46
5.7	CSR Initiatives by DBBL	49
5.8	CSR Initiatives by UCBL	50

Chapter-6:  Recommendations and Conclusion

                                                                       

6.1	Findings	53
6.2	Recommendations	54
6.3	Conclusion	55
6.4(a)	Annexure A	56
6.4(b)	Annexure B	57
6.4(c)	Annexure C	58

1.1 Origin of the Study

As a student of Business Administration (MBA Program) every student has to conduct a practical orientation in any organization for fulfilling the requirements of the 12 weeks Research Program. The main purpose of the program is to expose the students to the real world situation. This thesis report is generated under the academic supervision of Professor Dr Md Nazrul Islam Dept. of Business Administration, Shahjalal University of Science and Technology, Sylhet. This report is prepared as the partial requirement of MBA degree. The topic is, Present and Prospect of Corporate Social Responsibility: “A Study on the Banking Sector of Bangladesh”

1.2 Rationale of the study

The ‘social contract’ between the corporation and the community is of critical importance. The motivations for these contracts are continuously being revisited to understand how CSR programs can nurture and contribute to the growth of firms. While CSR issues are attracting a great deal of attention in the developed world, there is a need for more research into CSR in the developing world. This paper considers the CSR practices of a small sample of banks in Bangladesh to better understand this situation.

1.3 Objectives of the Study:

Before any research work, setting up objectives is very essential and it is as the half of completing the work. The reasons behind conducting this study are clear and were motivational towards the achieving of goals. In defining the objective, the CSR practices in the banking is given special emphasis. The main objective of this study is to identify the nature of CSR practices in the banking sector of Bangladesh.

1)      To identify the attitude & responsibility towards the society   of   various banks in Bangladesh.

2)      To get insight of actual scenerio of the CSR practices of banks operating in Bangladesh.

3)   To highlight the social responsibility of banking sector in Bangladesh.

4)   To recommend suggestions for better CSR practices.

1.4 Methodology:

All the information incorporated in this report has been collected both from the primary sources and as well as from the secondary sources. The details of these sources are highlighted in the following.

1.4.1 Primary Sources:

         I have collected primary data by interviewing employees and clients of the various banks in Sylhet. I made a questionnaire and collected primary data by survey method. I also collected Primary data by face to face conversation.

1.4.2 Secondary sources:

I have collected secondary data for my research paper from:

•Annual reports

•Bank records

•Journals of the Bank

•Different books, training papers, manuals etc. related to the topic.

•Website of the Bank

1.4.3 Target Group:

         The banks operating in Sylhet region have been considered as the population of the study.

1.4.4 Data Collection and presentation Techniques:

         I designed a structured questionnaire for the study. This structured questionnaire was the major tool of this research paper. For collaborating the data and information collected through primary and secondary sources I have used both qualitative and quantitative method. I analyzed and presented the data by percentage, graphical presentation techniques, used different types of charts. I tried to analyze the major or critical findings .Then, based on everything; I provided recommendations and conclude the research paper.

1.4.5 Sample Size:

          I surveyed 20 branches of different banks operating in Sylhet by the questionnaire. My Study includes qualitative analysis of data which were collected through the questionnaire. I used both qualitative and quantitative method for collaborating the information that was collected.

1.5 Limitation of the study:

        As it is the first organized research on this topic, we had to face a lot of problems since adequate information is not available, in many cases these were hard to gather. Some obstacles are given below:

·                  Lake of experience in research work.

·                  Insufficient supply of relevant books and journals.

·         Most of the bsnks dislike disclosing information.

·         Many individuals are not familiar with this type of work.

·         Time and Budget were limite

2.1 Corporate Social Responsibility:

One of the most frequently asked questions at this era - and probably for all those individuals and organizations dealing with CSR issues is the obvious - just what does "Corporate Social Responsibility" mean anyway? Is it a stalking horse for an anti-corporate agenda? Something which, like original sin, you can never escape or what? Different organizations have framed different definitions - although there is considerable common ground between them. My own definition is that CSR is about how companies manage the business processes to produce an overall positive impact on society.

The World Business Council for Sustainable Development in its publication "Making Good Business Sense" by Lord Holme and Richard Watts used the following definition. "Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large"[1]

Definitions,"CSR is about capacity building for sustainable livelihoods. It respects cultural differences and finds the business opportunities in building the skills of employees, the community and the government" from Ghana, through to "CSR is about business giving back to society" from the Phillipines.

Philip Kotler and Kevin Lane Keller urge that, “Raising the level of socially responsible marketing calls for a three-pronged attack that relies on proper legal, ethical, and social responsibility behavior.”[2]

2.2 Potential business benefits

The scale and nature of the benefits of CSR for an organization can vary depending on the nature of the enterprise, and are difficult to quantify, though there is a large body of literature exhorting business to adopt measures beyond financial ones (e.g., Deming's Fourteen Points, balanced scorecards). Orlitzky, Schmidt, and Rynes[6] found a correlation between social/environmental performance and financial performance. However, businesses may not be looking at short-run financial returns when developing their CSR strategy.

The definition of CSR used within an organization can vary from the strict "stakeholder impacts" definition used by many CSR advocates and will often include charitable efforts and volunteering. CSR may be based within the human resources, business development or public relations departments of an organization, or may be given a separate unit reporting to the CEO or in some cases directly to the board. Some companies may implement CSR-type values without a clearly defined team or program. The business case for CSR within a company will likely rest on one or more of these arguments:

2.3 Human resources

A CSR program can be an aid to recruitment and retention,[8] particularly within the competitive graduate student market. Potential recruits often ask about a firm's CSR policy during an interview, and having a comprehensive policy can give an advantage. CSR can also help to improve the perception of a company among its staff, particularly when staff can become involved through payroll giving, fundraising activities or community volunteering.

2.4 Risk management

Managing risk is a central part of many corporate strategies. Reputations that take decades to build up can be ruined in hours through incidents such as corruption scandals or environmental accidents. These can also draw unwanted attention from regulators, courts, governments and media. Building a genuine culture of 'doing the right thing' within a corporation can offset these risks.

2.5 Brand differentiation

In crowded marketplaces, companies strive for a unique selling proposition that can separate them from the competition in the minds of consumers. CSR can play a role in building customer loyalty based on distinctive ethical values.[10] Several major brands, such as The Co-operative Group, The Body Shop and American Apparel[11] are built on ethical values. Business service organizations can benefit too from building a reputation for integrity and best practice.

License to operate

Corporations are keen to avoid interference in their business through taxation or regulations. By taking substantive voluntary steps, they can persuade governments and the wider public that they are taking issues such as health and safety, diversity or the environment good corporate citizens with respect to labor standards and impacts on the environment.

2.6 REVIEW OF LITERATURE

The focus of this chapter is to provide a selective review of the past research works related to the present study. A lot of researches will ve done but (as a sample) very few are related with this unique one. Among the researches done the following are mentionable:

Corporate Social Responsibility (CSR), which is also known as corporate citizenship or sustainable  responsible  business  (SRB) , is  a form  of corporate  self-regulation integrated into the business culture. CSR is defined as:

“CSR  is  a concept  whereby  financial  institutions  not  only consider their profitability and growth, but also the interests of society and the environment  by taking responsibility  for the  impact of their activities on stakeholders, employees, shareholders, customers, suppliers, and  civil society represented by NGOs. Banks must take on new responsibilities that go beyond a simple policy of “paternalism” vis -a- vis their suppliers, customers and employees, such as that practiced up until recent times” (Noyer , 2008).

There are many theoretical reasons (such as political economy, legitimacy and stakeholder   theories)   why   companies   should   engage   in   social   responsibility reporting.  Some companies  do not engage in corporate social disclosure  becaus e they: (i) do not have the information, (ii) do not want to disclose this information since it signals bad performance, and (iii) it is an expensive process. This study focuses on two  important   theories   that  explain  the extent   of  corporate   social  disclosure: legitimacy   theory   and  stakeholder   theory. Previous studies   have  used  either legitimacy  theory  or  stakeholder  theory  to  develop themes  of  disclosure easurement and to analyze the extent to which companies disclose their corporate social responsibility. Legitimacy is defined as:

“a  generalized  perception  or  assumption  that  the  actions  of  an entity  are  desirable,  proper,  or  appropriate  within  some  socially constructed   system   of   norms,   values,   beliefs,   and   definition” (Suchman, 1995, p. 573).

Although  a relatively  new concept  in Bangladeshi  corporate culture,  awareness  of corporate  social  reporting  has  rapidly  increased.  All companies  need  to consider their  CSR for  two  basic   reasons.   Firstly,  there  is  intensifying   pressure  from stakeholders  to do  so  (Belal,  2001).  Any  company  that  does  not  develop  and promote  its  CSR  policy  to all  stakeholders   will  face  increasing   threats  to  its reputation. Secondly, because it makes sound business sense, CSR enhances  the reputation  of  an  organization,  brings  in  new business  and  improves  stakeholder return (Kabir, 2003). The government  of Bangladesh  has not imposed or proposed requirements  for  disclosure  of  social  and  environmental  performance. The Bangladesh Companies Act 1994 sets the general framework for corpor ate financial reporting.

However,  no provisions  regarding CSR exist in the Companies  Act 1994 (GoB,  1994)[3].  Until recently,  neither  is  there  a  separate  Bangladesh  Accounting Standard   (BAS) regarding   social   and  environmental   reporting   (IASCF,   2003). However, since the adoption of International Financial Reporting Standards (IFRS) in Bangladesh   on   5  July  2006i,   Presentation   of   Financial   Statements   (BAS   1) encourages  companies  listed  on  the  Stock  Exchange  of  Bangladesh  to  publish additional  statements  on their non-financial  activities; if management  believes  they will assist users in making  economic  decisions.  Therefore,  in Bangladesh,  CSR is still  voluntary  with  the exception  of  disclosure  of  expenditures  on  energy  usage required under the Companies  Act of 1994 and the Securities and Exchange Rules of 1987, which require the total amount spent on energy to be shown as a separate expenditure in the notes to the financial statements (Belal, 2001).

Since  corporate  social  reporting  disclosure  is  voluntary  in  Bangladesh,  it  is  not  surprising  that in previous  research  only a few companies  did disclose their CSR. Using annual  reports of 40 companies listed on the DSE, Imam (2000) found that in 1996–97 annual reports[4]:

….. a total of 25 per cent of the sample companies made community and 22.5 per cent environmental disclosure. Only 10 percent of companies  provided  consumer related  disclosure  (Imam,  2000,  p.136).

Though some progressive companies disclosed some information on community, environmental   and consumer  related  activities,  that  information   was  not  at  all adequate in discharging  social responsibilities. Imam conclude that

….. the sample listed companies tend to represent a relatively minor quantity of disclosure when compared with corporate financial disclosures. The disclosures mostly comprise narrative  qualitative information (Imam, 2000, p. 140).

Belal‟s  (2001)  study  represents  30  annual  reports  collected  on  a n  ad  hoc  basis  directly  by  contacting  the  company  source  or  collected  from  the  Dhaka  Stock Exchange. In  his  study,  listed  companies  dominate  the  survey  (28  out  of  30) representing  15 percent  of the total listed companies  in Bangladesh  (196 at June, 1997). Belal (2001) concluded that

…although a number of companies  are making social d isclosures, the quality of information

disclosed is very low. The nature of disclosure is mainly descriptive (Belal, 2001, p.286).

These conclusions echo the findings of the research by Imam (2000). In the absence of independent verification, the credibility of information disclosed is questionable. Hossain et al. (2006) also used the annual reports of 107 non -finance companies, for the financial year 2002-2003, showing that:

an average 8.33% of Bangladeshi companies disclose social and environmental  information  in their corporate annual report (Hossain et al., 2006, p. 10).

Hossain et al. (2006) concluded that these disclosures were voluntary in nature and largely qualitative.  They also mentioned  that the findings  between  developed  and some developing countries are compared, the disclosure of social and environmental information  made  by  the listed  companies  in  their  corporate  annual  reports  in Bangladesh is “very disappointing” (Hossain et al., 2006).

3.1 Introduction

‘Corporate Social Responsibility’ or CSR for short is a relatively new term that has suddenly gained currency. Hundreds, indeed thousands, of companies are adopting ‘ethical policies’ or ‘codes of conduct’ saying how they intend to behave. More and more companies are signing up to such initiatives as the United Nations Global Compact or the Fair Labor Association. They are joining bodies such as World Business Council for Sustainable Development and CSR Europe. On both sides of the Atlantic there are myriads of conferences and ‘initiatives’, where corporate ‘CSR Executives’, some even from companies with a long anti-union record, meet up with campaigns, NGOs and indeed trade unions. Take the example of McDonald’s. In the 1990s, the hamburger corporation took two campaigners through a long and exhausting libel court case in London after they criticized its corporate practices. Then there was the 2004 film ‘Super Size Me’. Its public image thoroughly dented, today McDonald’s leaflets in the UK show happy local farmers producing organic crops for healthy meals. Or the oil company Unocal, which was severely criticized for knowingly using forced labour to construct a pipeline in Burma, a country run by a vicious regime and subject to an international boycott. Labour rights’ groups in the US took Unocal through the courts. Unocal now has a huge area on its website devoted to CSR. In fact, CSR means different things to different people. However, certain ideas are becoming commonly accepted. One is that CSR is not about philanthropy or charitable work. It refers to something much more fundamental. It is about how companies take responsibility for their actions in the world at large. Conventional CSR Watchdogs include Labor Unions, Consumer Groups, Environmentalists, NGOs and all ‘Stakeholders’ watching over their interest as opposed to ‘Stockholders’ only.

The role of business worldwide and specifically in the developed economies has evolved over the last few decades from classical ‘profit maximizing’ approach to a social responsibly approach, where businesses are not only responsible to its stockholders but also to all of its stakeholders in a broader inclusive sense. One can identify so many reasons for shifting the role of business from classical concept to a responsible business concept, but negative impression of stakeholders on the enterprise would get a higher priority among others. In one hand, enterprises create wealth and job opportunities for the society and on the other, they are pollute and destroy environment and ecology with devastating impact on human health and bio-diversity worldwide.  To address the social problems or the problems of the stakeholders, the business community evolved a new approach in their business strategies named CSR and through CSR enterprises are intent to strike a balance between economic and social goals, where resources are used in a rational manner and social needs are be addressed responsibly.  CSR can be viewed as a comprehensive set of policies, practices, and programs that are integrated into business operations, supply chains, and decision making processes throughout the company and include responsibilities for current and past actions as well as adequate attention to future impacts. CSR focuses vary by business, by size, by sector and even by geographic region. The umbrella of CSR is quite big and it includes all the good practices that increase the business profitability and can preserve interest of all stakeholders.

3.2 CSR in Historical Perspective

CSR is a concept whereby companies integrate social and environmental concerns in their business operations and in their interactions with their stakeholders on a voluntary basis. (Green Paper, 2001) Socially responsibility means not only fulfilling legal expectations, but also going beyond compliance and investing ‘more’ into human capital, the environment and in rapport-building with stakeholders.  It is relevant in all types of companies and in all sectors of activity, from MSMEs to Multinational Enterprises (MNEs).  “A number of companies with good social and environmental records indicate that these activities can result in better performance and can generate more profit and growth.  (Green Paper, 2001)  Research (Industry week, 15 January 2001) has shown that about one half of the above average performance of socially responsible companies can be attributed to their CSR image while the other half is explained by their performance. Socially responsible companies are expected to deliver above-average financial returns. (Green Paper, 2001)  CSRhas some internal dimensions such as: human resources management, health and safety at work, adaptation to change and management of environmental impact and natural resources. The external dimensions include local communities, business, partners, suppliers and consumers, human rights and global environmental concerns. Again, CSR may be as simple as sponsoring social service oriented entertainment events. In essence, ‘CSR is positive rapport with the society’.  In a Bangladesh context, several multinational companies and local companies practice CSR. While the multinationals are influenced by their own ESRB disposition, most of the business concerns in Bangladesh do not rate high in practicing CSR unless being pressured by the foreign buyers in case of export oriented business.

3.3 CSR Implications to Business Activities 

Companies are facing the challenges of adapting effectively to the changing environment in the context of globalization and in particular in the export sector. Although Consumer Rights Movement, enforcement of government  regulations and a structured view regarding the economic importance of CRS are not yet so widespread in the corporate world in Bangladesh, companies have gradually attaching more importance to CSR in the local market as well. They are increasingly aware that CSR can be of direct economic value.  Companies can contribute to social and environmental objectives, through integrating CSR as a strategic investment into their core business strategy, management instruments and operations.  This is an investment, not a cost, much like quality management. So, business organizations can thereby have an inclusive financial, commercial and social approach, leading to a long term strategy minimizing risks linked to uncertainty.  

3.4 CSR as Community Development 

CSR in Bangladesh can also contribute a lot to community development. The corporate house can develop the community by creating employment, providing primary education, contribution to infrastructure development like road and high-ways and addressing environmental concerns. This is more relevant for a country like Bangladesh where the government interventions in these fields being augmented by corporate alliance can go a long way in developing the economy, society and environment. 

3.5 CSR Applications and Realities in Bangladesh 

CSR concepts and practices in Bangladesh have a long history of philanthropic activities from the time immemorial. These philanthropic activities included donations to different charitable organizations, poor people and religious institutions. Till now, most of the businesses in Bangladesh are family owned and first generation businesses. They are involved in the community development work in the form of charity without having any definite policy regarding the expenses or any concrete motive regarding financial gains in many instances. Moreover, most of the SMEs fall under the informal sector having low management structure and resources to address the social and environmental issues. These limitations drive the top management of local companies to think only about the profit maximization rather than doing business considering the triple bottom line: profit, planet and people (CSR definition of Lotus Holdings). The discussions on CSR practices in Bangladesh in its modern global terms, are relatively new, but not so for the concept itself. Because, being a part of the global market, it is difficult to ignore CSR standard specifically in the export sector.   In general, it is true that in Bangladesh, the status of labor rights practices, environmental management and transparency in corporate governance are not satisfactory, largely due to poor enforcement of existing laws and inadequate pressure from civil society and interest groups like Consumer Forums.  Globally, as CSR practices are gradually being integrated into international business practices and hence is becoming one of the determining factors for market accesses, it is becoming equally instrumental for local acceptability . A focus on CSR in Bangladesh would be useful, not only for improving corporate governance, labor rights, work place safety, fair treatment of workers, community development and environment management, but also for industrialization and ensuring global market access.  Since, CSR entails working with stakeholders it is important to work from within and diagnose the stakeholders; concerns so that CSR is truly embedded in the companies.  By now, many CSR dimensions are practiced in Bangladesh. The SMEs largely depend upon export. The US and EU buyers set guidelines to RMG industry to ensure the standards. The 1992 Hrkin’s Bill and subsequent consumer and industry boycott of RMG products by USA and the consequent remedial moves by local RMG sector is one example. Moreover, some buyers from EU visited the sites of recently collapsed garments factories. A temporary ban was also imposed on Shrimp export to the EU on health and hygienic standard and appropriate remedial action followed in that instance too. But, some of the exporters found difficulty in convincing the US/EU buyers to have positive attitude towards Bangladesh due to inadequate CSR practices,

Lack of enforcement of Industrial Laws and Regulations, weak unions, absence of consumer rights groups and high level of corruption within the regulatory bodies make CSR violation rampant in Bangladesh. Two most significant foreign exchange sources is the RMG sector and the overseas manpower export. Unbelievably low compensation, working hours, health/hygiene/sanitation conditions, fire safety and various types of abuse are so common and to the extent of inhumanity that wild shock any conscientious individual to the core. Recently, the RMG sector employees have embarked on a industry wide movement to establish their rights.

Overseas workers are mostly exploited by recruiting agencies whereas these rural and mostly illiterate people have to sell all their belongings becoming paupers of lend money at very high interest. Owing to cheating by the recruiters and unlawful behavior by the overseas employers, many of them get compelled to come back as beggars, some after long confinement in overseas jails. Hardly any remedy is available from the law enforcing agencies.

Many industrial units run with half-century old machinery producing fatal air, soil and water pollutions. More modern factories also don’t care to install Effluent Treatment Plants.

Starting from FMCGs, vegetables, fruits and all other conveyable goods, adulteration, abnormal ripening at times with poisonous elements, keeping fish fresh with applying deadly Formalin and all other malpractice is rampant and carefree. Good Governance and efficient law enforcing agencies can only solve these plights.

3.6 Prospects and Future of CSR in Bangladesh 

Bangladesh is a developing country. Because of global competitiveness and demand, the CSR practices and standards are being implemented in Bangladesh. But we are yet go a long way. There are challenges to implement CSR properly in Bangladesh. Ultimately CSR practices should be better practiced in Bangladesh for better and enhanced performance. In the publication “Good Governance and Market-Based Reforms: A Study of Bangladesh, Fara Azmat and Ken Coghill relates Good Governance with CSR by discussing the good governance indicators of regulatory quality, rule of law and control of corruption in the context of Bangladesh and analyses how lack of good governance indicators affects the success and sustainability of reforms and contributes to the lack of business ethics and CSR in Bangladesh.

3.7 Good Governance and CSR in Bangladesh

CSR has been defined in general terms as ‘the obligation of the firm to use its resources in ways to benefit society, through committed participation as a member of society, taking into account the society at large and improving the welfare of society at large independent of direct gains of the company’ (Weile et al., 2001: 288). In this article, CSR, as related to the problems of the agricultural input sector of Bangladesh, is used to explain the need of the businesses to be socially responsible and focus on economic, social, legal, ethical and environmental issues. Farmers are being cheated into buying underweight, low quality inputs sometimes at higher prices, which do not benefit yields. The contaminated inputs also cause damage to soil fertility, which eventually results in decreased yields. While the economic aspect is represented by the resultant effect of a price hike on the farmers, the social impact is due to the decrease in farmers’ income. The legal and ethical components are represented by the private sector not complying with the laws and rules and not meeting the obligations placed on them by the state and the society. Finally, the environmental consideration is also important because of the effect of contaminated and unbalanced inputs on the soil and on soil fertility.

As discussed above, lack of effective good governance in Bangladesh has resulted significantly in lack of business ethics and poor CSR culture. According to Wilson (cited in McIntosh and Thomas, 2002: 7), the key idea behind CSR and corporate citizenship is that responsible behavior makes good business sense. In Bangladesh the private sector seems to focus on earning profits in the short term, ignoring the issue of responsible behavior and the desirability of earning the trust of consumers which are important for the long-run success of their operations. The incidence of selling adulterated low quality products at high prices and with underweight and above all, hoarding to reap dishonest profit, all confirm this. In the absence of a socially responsible behaviour in the private sector, there is need to enhance capacity-building on the part of the state to intervene and implement sanctions effectively to enforce compliance. CSR does not develop and is not sustained independently of the context in which business operates. Importantly, the context includes the legal infrastructure created by the state and the enforcement effort imposed by the state. In the absence of an effective state intervention in the public interest, private entrepreneurs are less constrained to behave in the public interest and in conformity with CSR. Thus lack of capacity or lack of will, or both, by the state weakens the incentives for private sector entrepreneurs to practice CSR.

In addition, private sector entrepreneurs lack expertise and are not efficient and competent enough to take advantage of the open economy. The government has recognized the need for educating the private sector and is undertaking some programmes. However, this is not done on a large scale and nor is the potential exploited sufficiently for NGOs to be involved to educate the private sector on business ethics and issues of corporate social responsibility.     

CSR Perceptions of Business Community in Bangladesh

AT a Roundtable organized by CSR Center of Bangladesh Enterprise Institute, held on Thursday, 23 February, 2006, speakers identified dearth of expertise, poor accountability as major obstacles to obstacles to practicing CSR in Bangladesh. They elaborated that lack of expertise and poor accountability of corporate houses are obstacles to implementation of CSR in Bangladesh. The speakers also said many CSR activities by Bangladeshi corporate houses are centered mainly around publicity and short-term implications. The BEI roundtable on CSR titled 'Corporate Social Responsibility Practices and Challenges in Bangladesh' was a part of its 'Dialogue Series on CSR in Action'.

Sanjiv S Mehta, chairman and managing director of Unilever Bangladesh Ltd, Mohammad Abu Musa, deputy managing director of Dhaka Bank Ltd, and Mohin Khan, executive assistant (Board Affairs) of BRAC, spoke at the discussion.

BEI President Farooq Sobhan said corporate entities should understand what CSR is and

why it is important. The private sector enterprises will remain weak unless and until they practice CSR in their ventures, the BEI president said, adding that when it comes to adopting good corporate governance, Bangladeshi companies are lagging far behind those in India, Pakistan and Sri Lanka. "Properly implemented CSR programmes help the companies meet legal and societal expectations and benefit governments, employees, citizens and businesses," noted Farooq. On the other hand, poorly implemented CSR programmes are nothing but public relations exercises, he mentioned.

Representatives of Unilever Bangladesh, Dhaka Bank and BRAC briefed the roundtable about their CSR activities. Around 20 high-level executives from local and international corporate houses and donor agencies participated in the roundtable.

CSR practices in Banks: An Analytical Review

4.1 CSR expenditures by banks

The banking sector of Bangladesh has a long history of involvement in benevolent activities like donations to different charitable organizations, to poor people and religious institutions, city beautification and patronizing art & culture, etc. Recent trends of these engagement indicates that banks are gradually organizing these involvements in more structured CSR initiative format, in line with BB Guidance in DOS circular no. 01 of 2008. The June 2008 BB Guidance circular suggested that banks could begin reporting their CSR initiatives in a modest way as supplements to usual annual financial reports, eventually to develop into full blown comprehensive reports in GRI format. Information on CSR expenditure available from annual reports of banks, compiled together, bring up the following picture of sectoral patterns :

In the year 2007, large concentration in the field of disaster relief, both in participation and expenditure wise, was observed mainly because of the cyclone ‘Sidr’. Whereas, in the year 2009, the ‘Education’ and ‘Health’ sectors were getting more attention and appeared to be the most popular area for CSR activities as huge investments are being made by several banks in these segments. These shifts point to the responsiveness of the banking community to the changing need of the society.

Following are some notable features observed from the CSR activities carried out by the banks:

Ø  In a natural calamity-prone area like Bangladesh, there remains an existing and distinctive CSR agenda focused on the business contribution to tackling social crises in the affected area. Disaster relief and rehabilitation became the segment where the highest number of banks participated to help ease the sufferings of the affected people. In the current context, a desired move from the traditionally popular fields of education or health.

Ø  In the education segment, more and more banks have taken long-term or renewable scholarship programs for under-privileged but meritorious students for the persuasion of their studies instead of providing one time recognition awards to good performers.

Ø  Some banks choose to provide continued financial support for maintaining operating costs of health care organizations. A bank undertook a continuous program called ‘Smile Brighter Program’ to perform as many operations possible per year on cleft-lipped boys and girls to bring back smile on their face.

Ø  Several banks have taken steps and introduced investment schemes to cater the needs of selfemployment and poverty alleviation under which micro-finance is channeled to the target groups, such as poor farmers, landless peasants, women entrepreneurs, rootless slum people, handicapped people, etc.

Ø  A few banks have taken steps to introduce Interest-free Education Loan to poor and meritorious students to help bear monthly educational expenditure including food, accommodation etc. The loan is distributed to the selected students in monthly installments till their completion of studies upto the Masters Degree level.

4.2 Financial Inclusion

The CSR guidelines issued by Bangladesh Bank put special emphasis on reaching out with financial services to the less well-off population segments of the community in order to speed up financial inclusion of the large socially disadvantaged rural and urban population segments; drawing them in with appropriate financial service packages and with _inancing programs innovatively designed to generate new employment, output and income.

It was observed that 4 SCBs, 3 DFIs, 29 PCBs and 3 FCBs have responded positively to this call and undertaken programs for speeding up _inancial inclusion of the large socially disadvantaged rural and urban population segments. Out of these programs-

1. 4 SCBs, 3 DFIs, 28 PCBs and 3 FCBs were engaged in self-employment credit and Small and Medium Enterprise (SME) lending programs, taken up solo or in association with locally active Micro Finance Institutions (MFIs). These programs were mainly designed to create productive new on-farm/off-farm employment. The banks also formally recognized their philanthropic obligation towards the promotion and development of small and medium industries sector.

2. 1 DFI has _inanced programs for installation of biomass processing plants and for Effluent Treatment Plants (ETPs) in manufacturing establishments.

3. In order to provide support to small landholder farmers of Bangladesh who play a crucial role in the development of the country, 4 SCBs, 3 DFIs, 25 PCBs and 3 FCBs have disbursed agricultural loans mainly through their rural branches for diversi_ied production of crops, oilseeds, spices, vegetables, fruits etc. by rural households, financing the growers directly or through suitable intermediaries in the value chain, and have provided credit support for combinations of farming activities. Concurrently, credit lines are also extended to different NGOs to support the initiatives for agricultural development and alleviation of poverty in the rural areas.

4. Two banks reported taking up initiatives aimed at prompt delivery of remittances from migrant workers to recipients in remote rural households, or programs for card based/ mobile phone based delivery of financial services to such households.

Among bank financed self-employment & SME projects; dairy, fishery, poultry, goat rearing & cow fattening projects and financing of NGOs for enhancing the _low of micro-credit under NGO Linkage Loan were more prominent. Among the four classes of bank, DFIs were the most important participant in the SME sector. From chart 3 below it can be seen that, during the year 2008, the DFIs had the dominant share of SME credit outstanding during 2008 and 2009. Involvement of SCBs in SME lending do not show signs of stable upward trend. The engagement of PCBs however, have been in signi_icant upward trend. Involvement of FCBs even though small in absolute size, is also showing signs of steady increase.

Chart 4 shows the trends of outstanding agricultural credit. Here again, the DFIs have dominant role, because of statutory obligation of two DFIs (BKB, RAKUB).

The volume of credit outstanding is no firm evidence of extent of financial inclusion per se however, chart 5 plots the trend of number of small sized bank loan accounts, a plausible proxy for increase in number of agricultural and small enterprise loan accounts and hence for financial inclusion. Trend lines in the chart indicate that the positive results from the CSR and other current

initiatives for broadening financial inclusion are yet to show up with prominence.

4.3 Social and Environmental Improvement

The banks had significant community investments by way of donations to initiatives of Civil Society Organizations (CSOs), NGOs and institutions involved in health, education and culture; for social and environmental improvement including nutrition, health and education in the disadvantaged population segments. The following table shows participation of banks in various areas of community development :

It was observed that, Education and Health were the more popular area of participation by the banks in community development. A total of 3 SCBs, 2 DFIs, 22 PCBs and 5 FCBs have made donations to various educational institutions for their cause. In the health sector, 1 SCB, 3 DFIs, 25 PCBs and 4 FCBs patronized a number of health care organizations by way of financial support to them. Disaster Relief also received due attention as 3 SCBs, 2 DFIs, 25 PCBs and 8 FCBs have provided donations to Relief and Rehabilitation Programs for the people affected in different

natural calamities.

On the other hand, as shown in the following table, only 12 banks out of 30 PCBs and 3 banks out of 9 FCBs have conducted direct social interventions, both as sustainable/continuous projects or occasional/remedial measures. These banks actually tried to enrich economic and social indicators of the society by way of reducing poverty, giving standard health care service, proper nutrition, and ensuring environment friendly society for the present and future generation. However, none

of the SCBs or DFIs conducted any direct social interventions. The following areas were covered by the banks that had direct social intervention programs :

1. Having considered education as a tool for social change, 8 PCBs and 1 FCB have chalked out programs with a view to remove the access barrier of some of many economic hardship-hit estimable students to their desired level of education by providing scholarship, fellowship, infrastructural development, etc.

2. Since a large number of poor people in our country are deprived of the opportunity to cure their health problem, 4 PCBs and 2 FCBs have established permanent health projects to reduce their sufferings.

3. Bangladesh lies in a natural calamity-prone area where floods, cyclones and other natural calamities often occur. Some Banks have always been at the service of the people afflicted by the natural calamities. 5 PCBs and 1 FCB have taken direct steps to provide aid and rehabilitation program they considered necessary to the group of people affected in different natural disaster.

4. 1 PCB and 1 FCB have some projects covering Art & culture aspects.

5. 1 PCB and 1 FCB have environmental project to combat the devastating effects of environmental changes for Green House affects due to Global warming.

4.4 Reporting CSR initiatives

The following figure shows that, 3 SCBs (75%), one DFI (20%) and 29 PCBs (97%) have reported their CSR initiatives as supplements to usual annual financial reports in accordance to the directive of Bangladesh Bank.

In case of FCBs, only audited financial statements are prepared for the host country, and their annual reports are published from their parent country. As a result, disseminating their CSR activities as supplements to usual annual financial report do not apply. It was also observed that :

1. 1 SCB, 1 DFI and 13 PCBs have reported the CSR activities separately as a chapter in the annual report to make it available in the public domain for perusal by stakeholders.

2. 1 SCB and 11 PCBs have provided details in those supplements. They have reported the action programs along with amount of investment made in each program.

3. 2 SCBs, one DFI and 4 PCBs have included a future plan in the annual financial reports.

None of the banks have issued separate reports of their CSR programs and activities in comprehensive standard formats such as the GRI. Additional information had to be asked for in compiling this review, over and above the information provided in annual reports of banks. For convenience of all involved, banks and financial institutions will be well advised to take steps for more elaborate reporting in comprehensive standard formats.

Some CSR Initiatives taken by the Banks

5.1 AB BANK LIMITED

Education

Ø  AB Bank limited assisted 20 blind students to participate in a specialized ICT training program. A contribution of Tk. 10.00 lac was made for phase-1 of the program. Upon successful completion of phase-1, 8 visually impaired students were able to find gainful employment in various offices.

Ø  The Bank contributed a further Tk. 12.41 lac in August 2009 to BODA towards providing Braille support for visually impaired students.

Social Welfare

Ø  AB Bank’s “Save the River” campaign appeared in national dailies in July 2009.

Ø  Supported the awareness campaign of ADHUNIK- ‘Amra Dhumpan Nibaron Kori’ aimed at youths of the country.

Ø  Supported an exhibition organized by SAARC Women’s Association, Dhaka to set up a life saving ventilator for the ICU unit at the Shishu Hospital.

Ø  Contributed to Zonta International Club to raise funds for “Shishu Bikash Kendro” for 160 under privileged children.

Ø  Contributed Tk. 5 lac to ‘Chhayanat’, a cultural organization, to partly support the construction of an auditorium.

Ø  Arranged to publish a supplement in one of the national newspaper commemorating “International Day of the Misuse of Drug and it’s Illegal Trade” organized by Home Ministry.

Ø  Periodically participating in such national campaigns as “World Environment Day” organized by Ministry of Environment and Forests, “World Breastfeeding Week” organized by Bangladesh Breastfeeding Foundation, “National Fishery Week” organized by Ministry of Fisheries and Livestock etc.

Ø  CSR activities also include contribution for the treatment of prominent cultural artists, donation for procurement of training room equipment for Dhaka Stock Exchange Training Academy, etc.

Sports

Signed an agreement with Bangladesh Table Tennis Federation in April 2008 for arranging National Table Tennis Championship for four years and contribute an

amount of Tk. 7.9 lac each year. Further agreement has been executed under which AB Bank to pay Tk. 15.13 lac per year for scouting new talents.

5.2 BANGLADESH COMMERCE BANK LIMITED

Financial Inclusion

Disbursed term loan to BRAC (NGO) for alleviation of poverty and agro-based farming projects.

Social welfare

Ø  Donated to UCEP to establish a school at Sylhet.

Ø  Donated Tk. 1.00 Lac to an organization named “Center for the Rehabilitation of the Paralyzed”.

5.3 BANGLADESH KRISHI BANK

Financial Inclusion

Ø  Financing activities relating to poverty alleviation, creating self-employment, reducing gender discrimination, women empowerment, environmental development, increasing social awareness, development of the handicaps, development of the rootless slum people etc.

Ø  Sanctioned loan of Tk. 20.00 Crore with easy-conditions to an NGO named “Bureau Bangladesh” under “BKB-NGO Linkage Wholesale Microcredit Program”.

Ø  Huge investment has been made in Mymensingh for fishery applying intensive/half-intensive system.

Ø  Started implementation of Special Fishery Loan Program for other potential areas of the country.

Ø  Loan program for landless/marginal peasants.

Ø   Special micro credit program for the development of the handicaps.

Ø  Financing at concessional interest rate for the socio-economic development of the country.

5.4 BANK ASIA LIMITED

Bank Asia contributes to the development efforts of the government and other recognized agencies including charitable, educational and healthcare institutions, throughout the country.

Education

Ø  Under Bank Asia’s “Higher Studies Scholarship” scheme, poor but meritorious students of rural areas where the bank has branches are awarded scholarships for their higher studies in several core subjects. The scholarships are given basing on the SSC and HSC exam results and the duration of the scholarship is generally 4 to 5 years. Under the program, students receive Tk.2,000 per month and a lump sum grant of Tk.10,000 is given annually to purchase books and for payment of tuition fees. This scheme was introduced in 2005, presently a grand total of 80 students are enjoying bene_it of this scheme.

Ø  Help poor students in rural areas by establishing and operating Computer Learning Centers (CLC) in different schools in providing a technological platform for students. Already 13 CLCs have been established in different rural schools and are in full operation. About 1,000students have enrolled so far in these CLCs out of which 900 students have already obtained certificates. The bank is also going to setup another 15 CLCs from where more than 3,000students are expected to receive education in computer technology every year.

Health

Ø  In the year 2005, Bank Asia started a program in collaboration with Bangladesh Eye Hospital (BEH) to help the underprivileged children by performing ophthalmologic operation of all born blind children of Bangladesh. So far, a total of 929 children have been operated.

Ø  The bank arranges free Eye Camps in the rural areas where free treatments including spectacles are provided to a large number of school going poor boys and girls and other people of the localities concerned.

Ø  The bank has donated an amount of Tk. 2.00 million to Islamia Eye Hospital (IEH) for the construction of a children ward at the hospital premises.

Ø  Donated Tk. 1.5 million for purchasing an ambulance for a hospital run by Bir Shreshta Matiur Rahman Foundation.

Ø  Financial support to Thengamara Mohila Sobuj Shangha for their hospital at Bogra, Centre for rehabilitation of the Paralyzed (CRP) and to Acid Survivors Foundation.

Ø  The bank also arranges voluntary blood donation campaign on various national occasions where the of_icers of the bank and general people participated spontaneously.

Financial Inclusion

Ø  Credit lines are extended to different NGOs to support the initiatives for agricultural development and alleviation of poverty in the rural areas.

Ø  Introduced ‘Palli Shawnirvor’ and ‘Kormoshangsthan Prokolpo’ under which micro_inance is channeled to the target groups. So far, the bank has extended loans in these sectors amounting to Tk. 460.67 million up to September 30, 2008 through NGOs and rural branches.

5.5 BRAC BANK LIMITED

Health

Ø  Donation made to extend BRAC Bank short Stay Ward at ICDDR,B.

Ø  Donated to Kidney Foundation Hospital.

Ø  Sponsored Photography Exhibition & Publishing a Book for Thalessemia Awareness Program.

Ø  Sponsored 3rd South Asia Regional Conference on Autism.

Social welfare

Ø  Sponsored 10th Anniversary of Acid Survivors Foundation-International Conference of the survivors of Acid Violence.

Ø  Sponsored SAARC Women’s Association Dhaka Chapter.

Ø  Supplement sponsored 4th Convocation of BRAC University.

Ø  Sponsored 2nd International Conference on Genocide, Truth & Justice.

Ø  Sponsored 10th Daily Star O & A Level Performance Awards.

Ø  Sponsored Junior Tennis initiatives to Bangladesh Tennis Federation.

Ø  Sponsored Inter School Soccer Tournament.

Ø  Donated to Bangladesh Wintering Water Fowl Census & Bird Festival.

5.6 DHAKA BANK LIMITED

Dhaka Bank Ltd. has formed a five member CSR committee headed by the Managing Director to oversee the overall activities and management of the CSR fund of the bank. Dhaka Bank Foundation, established in 2002 as a non-profitable, non-governmental organization, is solely devoted to the cause of charity, social welfare and other benevolent activities towards the promotion of the objective of the foundation. Dhaka Bank has taken the decision to provide 2% of the pre-tax profit

each year as its CSR activities.

Health

Ø  Donation of passenger lifts and two haemodialysis machines to BIRDEM Hospital and Tk. 1.2 million per year from 2006 for supporting operating costs.

Ø  Donation of Tk. 10 million to Centre for Women and Child Health Hospital for setting up pathological laboratory.

Ø  Setting up of a 10-bed ward at the proposed Ahsania Mission Cancer and General Hospital,sponsoring Society for the Welfare of Autistic Children (SWAC).

Ø  Donating to Bangladesh Eye Hospital, Sponsorship for Shield Trust.

Disaster relief

Ø  Among Dhaka Bank’s contribution as corporate social responsibility, a few initiatives are donation to Asiatic Society of Dhaka.

Ø  Relief operation for _lood victims at a cost of Tk. 5.0 million.

Ø  The bank distributed 10 kg rice, 1 kg pulse, and 1 kg salt to each of the 10,000 distressed families of Araihazar, Sirajdikhan and Belkuchi.

Social welfare

Ø  Renovation of the auditorium of Dhaka Reporters Unity.

Ø  Sponsoring of Anti Drug Debate Festival, Distribution of winter cloths by the employees of the bank.

Ø  Sponsoring of Bangladesh Under-19 cricket team.

Ø  Awareness creation for Road Safety, Blood Donation, Eye Donation, Prevention of AIDS.

Ø  Provided _inancial assistance for Educational Development Trust of Scholastica to support and nurture academically gifted students.

Ø  Sponsorship for BADC School.

Environment

Ø  Sponsored the city beauti_ication program initiated by Dhaka City Corporation by refurbishing Dhaka Bank Fountain in front of Ministry of Foreign Affairs and Dhaka Bank Park in front of Dhaka Bank Head Office, beautification at Jashimuddin Crossing at Uttara costing 1.5 m, and also in front of Dhaka Bank Head Office costing 1.2 m.

5.7 DUTCH BANGLA BANK LIMITED

Dutch Bangla Bank Limited (DBBL) has been playing a pioneering role in implementing social and philanthropic programs to help disadvantaged people of the country. Education, healthcare, human resource development, conservation of nature, creation of social awareness, rehabilitation of distressed people and such other programs to mitigate human sufferings are some of the important areas where the bank carries out its social and philanthropic activities. Dutch-Bangla Bank Foundation, established in June 2001, carries out humanitarian activities like

rehabilitation of the destitute and neglected section of the society. DBBL provides 5 percent of its gross profit to the foundation every year.

Education

Ø  DBBL is providing scholarships to students, especially for those who can not continue their study due to financial constraints as well as to the meritorious and needy students every year since 2003. The bank awards around 300 new scholarships of Tk. 1,000 per month every year along with continuing scholarships for those studying at HSC level. So far around 745 scholarships have been awarded in this level. The Graduation level scholarships of Tk. 2,000 per month are renewable for their entire academic period of graduation level and about 876 scholarships have been awarded in this level. The bank also awards 50 fellowships of Tk.5,000 per month every year to the researchers having Masters Degree and those studying at different public universities at M. Phil, PhD or post-doctoral level. About 129 fellowships have been awarded so far.

Ø  As part of its corporate social responsibility, DBBL donated more than Tk. 10 crore to Dhaka University for constructing a research centre (Centre for Advanced Research in Arts & Social Science Bhaban). The research centre, first of its kind in Bangladesh, aims to play a vital role in higher study in human and social sciences. Researchers and scholars from home and abroad will be awarded scholarships and fellowships for conducting higher study.

Ø  Donated to establish a modern Braille printing press to Bangladesh National Society for the Blind for publishing Braille books for the blind students.

Ø  Donated reference books to the library of different educational institutions like BSMMU, Dhaka University etc.

Ø  Donated a pick-up van to Botanic Garden of Bangladesh Agriculture University for collection, conservation and utilization of rare and endangered plant species of Bangladesh etc.

Health

Ø  Cleft-lip problem is not only a health problem but it affects the whole family along with the victim. Since 2003 DBBL is working with these vulnerable groups under its Smile Brighter Program to bring back smile on their face and to enable them to start normal life. This is a continuous program aiming to perform as much operation possible per year. Total 5,000 poor cleft-lipped boys and girls have so far been successfully operated across the country till date.

Ø  DBBL Foundation provides financial support for operative treatment of rural and poor women who have been suffering from Vasico Vaginal Fistula (VVF) and other related problems with a view to ensure their healthy and productive life. A total of 86 patients have so far been successfully operated across the country till date.

Ø  In 2008, DBBL took an initiative of conducting surgery on some 12,000 poor cataract patients across the country. So far some 2000 poor cataract patients have so far (during 2008 & 2009) been successfully operated across the country under the Cataract operation for underprivileged rural people program.

Ø  Under DBBL’s Medicine and nutrition support for HIV/AIDS patients program, 50 HIV/ AIDS patients including women and children are being provided with ARV (Anti-Retro-Viral) medicines, vitamins and nutritious food supplement and clinical supports.

Ø  DBBL provides free rural medical services for rural poor people specially mother and children through rural branches such as Shimrail, Donia, Gazipur Chowrasta, Boardbazar, Savar Bazar, Baburhat, Patherhat, Hathazari branch etc. Medical of_icers are providing advices and prescriptions to poor patients of surrounding areas of these branches.

Ø  DBBL donated generous amount of money to different health organizations for medical instruments and medical infrastructural development such as operation theatres, laboratory, hospital building, etc.

Disaster relief

Bangladesh faces various kinds of natural calamities like cold, _lood, storm, cyclone etc. in every year. Considering the sufferings of common people DBBL has introduced following special programs for the people of the affected areas :

• Financial support for rehabilitation of land slide victims of Chittagong.

• For rehabilitation of devastating flood victims.

• For rehabilitation of cyclone ‘Sidr’-hit people.

• Twenty lacs blankets for cold-hit people of northern region of Bangladesh.

• Water purifying tablets, oral saline & Cholera saline for the Flood victims.

• To ensure hygienic sanitation system DBBL provided 460 numbers of sanitary latrines for the inhabitants of Angorpota and Dahagram enclave. DBBL also provided support for ensuring pure drinking water by providing 50 hand tube wells for them.

Sports

DBBL provides financial support for promoting the sports and culture of Bangladesh. Some mentionable events were :

• Sponsoring inaugural Test Match between Bangladesh and India.

• Financial support to Bangladesh Hockey Federation.

• Sponsoring Dutch-Bangla Bank President cup Golf Tournament.

• Sponsoring Dhaka Sports Carnival-2007.

• Donation to Bangladesh Olympic Association.

Social welfare

Ø  For the development of the vulnerable segments of Bangladesh, DBBL assisted to rehabilitate the acid and dowry victim women by providing one-time financial assistance for establishing small scale agro-based rural economic enterprise to be self reliant. Total 884 women received financial assistance from DBBL.

Ø  DBBL provides financial support for rehabilitation of physically handicapped, mental impaired, visually impaired, hearing impaired, autistic and street children by ensuring education and vocational training.

Ø  DBBL runs mass awareness programs on different burning issues through print and electronic media. Some remarkable issues are as follows: Save the Nation from curse of Dowry, Stop Acid violence, Prevent Drug Abuse, Tree plantation and preservation of environment, Right of disable children etc.

Ø  Financial support to ‘Nirapad Sarak Chai’ for helping the victims of road accident and mass campaign for prevention of traffic accident.

Ø  City beautification and preserving environment to develop an eco-friendly society for healthy human life.

5.8 UNITED COMMERCIAL BANK LIMITED

As part of its CSR, United Commercial Bank Ltd. is continuing donations to different organizations which support social welfare.

Disaster relief

Ø  Donation to Prime Minister’s Relief Fund for Tornado victims in 2004, and ‘Aila’ victims.

Ø  Donation to Victims of Landslide, Chittagong.

Health

Ø  Donation to Riverboat Hospital project.

Ø  Donation to ORBIS.

Ø   Donation to ‘Chattagram Maa O Shishu Hospital’.

Ø  Donation to SIED Trust for providing physiotherapy support to underprivileged children.

Ø  Sponsored Immunization Campaign.

Social welfare

Ø  Donation to Election Commission for preparing Voter & National ID.

Ø  Sponsored New Voter Campaign.

Ø  Donation to TRY Foundation.

Ø  Arrangement of job fair.

Ø  Donation to Monga affected people.

Ø  Sponsored Tree plantation program for maintaining ecological balance.

Sports

Ø  Donation to Bhatiary Golf & country club, Chittagong for construction of Halfway house.

Ø  Games & Sports sponsorship (ICC T20 World Cup & Athletic Federation

 

 6.1 Findings

 Globally, the notion of Corporate Social Responsibility (CSR) is fast gaining acceptance as the contribution that businesses can and should make voluntarily towards environmentally sustainable and socially equitable development. Besides the usual financial reporting, ‘non-financial’ or ‘sustainability’ reporting is accordingly also fast gaining usage.

Stated briefly, CSR is about (i) taking stock of the economic, social, and environmental impacts of a business, (ii) mitigating the negative impacts and bolstering the benign impacts, (iii) taking up action programs and community investments to reduce social exclusion and inequality and to address the key sustainable development challenges (‘meeting the needs of the present generation without impairing the ability of future generations to meet theirs’ is a generally accepted meaning of ‘sustainable development ’).

Because of their ethical and public interest dimensions, many of the desired social and environmental practices are compulsorily mandated by laws and regulations (e.g., safe and healthy work environment, equal opportunity and fair treatment in respect of gender and ethnicity in hiring and career advancement, avoidance of forced labor or child labor, and so forth). CSR programs and actions go beyond such mandatory compliances into voluntary engagements to promote equitable, sustainable development. Besides the self-evident ethical case, a strong business case for CSR ( as investment in a strategic asset or distinctive capability, rather than an expense) is also getting clearer with developing practice; seen as benefiting a business by :

Ø  building reputation, brand value, customer loyalty, employee motivation and retention;

Ø  mitigating risks in own operations and in assessing suppliers and clients;

Ø  cutting down wastes (of energy, raw materials etc.), driving up efficiency;

Ø  gaining new markets for products and services, in the communities/ social groups benefited by the CSR actions.

 6.2 Recommendations

It would be of strategic, longer run competitive advantage for banks and financial institutions in Bangladesh to embrace CSR in their management approaches and operations, with initiatives chosen in broad-based, extensive stakeholder engagement. Besides adoption of socially and environmentally responsible practices in own internal operations, banks and financial institutions can make major CSR contribution by speeding up financial inclusion of the large socially disadvantaged rural and urban

population segments; drawing them in with appropriate financial service packages and with financing programs innovatively designed to generate new employment, output and income. The following could be some priority areas, among the broad range of possible useful initiatives:

Ø  Self-employment credit and small and Medium Enterprise (SME) lending programs, taken up solo or in association with locally active Micro Finance Institutions (MFIs), designed to create productive new on-farm /off-farm employment, such initiatives are of particular urgency for regions with endemic high seasonal unemployment (e.g., the manga afflicted Northern districts);

Ø  Financing programs for installation of biomass processing plants (e.g. biogas plants), solar panels in rural households, for waste recycling plants in locations populated by urban poor, and for Effluent Treatment Plants (ETPs) in manufacturing establishments;

Ø  Credit programs for diversified production of crops, oilseeds, spices, vegetables, fruits etc. by rural households, financing the growers directly or through suitable intermediaries in the value chain. Credit support for combinations of farming activities (like co-production of a minor crop with a major one, fish/duck farming with aman rice of deep water variety in low lying fields), may also be well worthwhile;

Ø  Mobile phone based/ local MFI outlet supported programs promptly delivering remittances from migrant workers to recipients in remote rural households; programs for card based/ mobile phone based delivery of financial services to such households;

Ø  Financing programs supporting folk crafts, folk musical and performing arts, aimed at promoting domestic tourism and markets in cultural products/events besides income and employment for the population groups involved.

With the employment and new income generated by successfully executed programs, the targeted population segments can eventually constitute big new client bases for financial products and services.

6.3 Conclusion

Embracing CSR has to begin with decision at the highest corporate level (board of directors), and adoption of action programs and performance targets chosen in consultative processes involving the internal and external stakeholders concerned. A first time CSR program of a bank or financial institution would be likely to include action plans for:

i) Ingraining environmentally responsible practices within the organization;

ii) Engaging with borrowers in scrutiny of the environmental and social impacts of their proposed undertakings (along the PKSF 2004 or Equator Principles 2006 guidelines, as relevant);

iii) Reaching out with financial services to the less well-off population segments of the community (with own initiatives along lines indicated at paragraph 1.2 above); and

iv) Community investments by way of donations to initiatives of Civil Society Organizations (CSOs), NGOs and institutions involved in health, education and culture; for social and environmental improvement including nutrition, health and education in the disadvantaged population segments (most banks and financial institutions in Bangladesh already have significant outlays of such charitable expenditures, these can fit in appropriately as elements in the new structured CSR programs).

Foreign banks in Bangladesh having structured CSR programs (in line with their home country practices) can come forward to usefully mentor the new, incipient CSR initiatives of local banks. Networking and joint initiatives in CSR programs among banks and financial institutions may be useful in some cases in devising more inclusive, comprehensive programs of necessary critical size.

Reporting of the CSR initiatives can begin in a modest way as supplements to usual annual financial reports, eventually to develop into full blown comprehensive reports in the GRI format. Like the statutory financial reports, the CSR reports are expected to be available in the public domain for perusal by stakeholders.

 Annexure A

References

1. Sustainability Reporting Guideline

(www.globalreporting.org, info@globalreporting.org).

2. Financial Services Sector Supplement: Social performance, for use with the sustainability reporting guidelines (www.globalreporting.org).

3. Financial Services Sector Supplement: Environmental Performance, for use with the sustainability reporting guidelines (www.globalreporting.org).

4. The Collevecchio Declaration on financial institutions and sustainability (www.foe.org/camps/intl/declaration.html).

5. Revised and Updated Guideline for Management of Microenterprise Environmental Health and Safety (EHS) Risks: August 2004, PKSF (available at Bangladesh Bank website www.bangladeshbank.org.bd).

6. The Equator Principles, July 2006 (www.equator-principles.com).

7. Probal Dutta, Sudipta Bose: Corporate Social and Environmental Reporting on corporate websites: a study on listed companies of Bangladesh, The Cost and Management, Vol.35 No.4. July-August 2007, pp31-49.

8. Theresa Moyo, Shanon Rohan: Corporate citizenship in the context of the _inancial services sector: what lessons from the Financial Sector Charter? Development Southern Africa, 23:2, 289-303, 01 June, 2006.

9. John G. Ruggie: Globalization, the Global Compact and corporate social responsibility, Transnational Associations, 6/2000, 291-294.

10. Jane Covey, L. David Brown: Critical Cooperation: An Alternative Form of Civil Society- Business Engagement, IDR Reports: A continuing Series of Occasional Papers, Vol. 17, No.1, 2001.

11. David Husselbee: NGOs as development partners to the corporates: child football stitchers in Pakistan, Development in Practice, 10:3, 377-389, 01 August 2000.

12. Department of Environment, Govt. of Bangladesh (www.doe-bd.org, info@doe bd.org).

13. UN Environment program (www.unep.org).

14. Sustainable Development Networking Program (SDNP) Bangladesh (www.sdnbd.org).

Annexure B

CSR expenditures by banks

Amount in Taka

Annexure C

     Department of Business Administration

     Shah Jalal University of Science & Technology, Sylhet

       Topic: Present and Prospect of Corporate Social Responsibility: “A Study on the Banking Sector of Bangladesh”

      (The collected data will be used only for preparing academic report and will be kept confidential)

 

Dear Sir/Madam:

For your kind information, this is a survey research regarding Present and Prospect of Corporate Social Responsibility: “A Study on the Banking Sector of Bangladesh”. We will be very obliged if you kindly give your responses to the following questions. Please pick the right answer:

                                i.        Bank Name      :

                              ii.           

Islamic

Private

Govt. Owned

Branch           :

                            iii.        Type                 :

1. Yes

   

   No

   Does your bank do CSR activities?
2. How do you decide on CSR activities (what are the criteria)?

…………………………………………………………………………….

3. Regional Branch

   

   Central Branch

   Who makes the CSR planning?

4. No

   

   Yes

   Does the regional branch has any planning authority?

5. Tk.……………….

   If yes, what is the threshold amount of the CSR expnditure?

6. Tk.……………….

   How much does your bank spend for CSR activities?
7. What are the sectors in which your bank does CSR activities?

8. Tk.……………….

   Till now, how much did your bank spent as CSR?

9. Who are the beneficiary?

10. No

    

    Yes

    On your opinion, do you think it is sufficient?

11. How would you assess your organization’s awareness of the current range of the CSR initiatives (check one)

Excellent

Good

Fair

Poor

12.  Is your organization currently active in developing or supporting voluntary CSR instruments/initiatives? If so which?

13.   If you have not been involved in any such initiatives, what are the main reasons?  (Check all that apply)

Not invited

Don’t consider it a priority

No relevant experience or skills

Limited financial resources

Other _____________________________________

14. Does your organization have a policy on corporate accountability and/or the role of CSR?  If so, how could this be best summarized?

					No

 

            If yes, ……………………………………………………………………………………..

“Thanks for your cordial cooperation”

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