CSR to combat climate change

Corporate Social Responsibility, commonly known as CSR, refers to activities integrating economic, environmental and social aspects of financing.  In recent times, the development of conceptual framework and practices of CSR has been broadened in multi-dimensional aspects. Along with direct expenditure for the community, practices of green banking and financing in environmental-friendly projects are accepted as major CSR involvement.
Opening of accounts for destitute people, cleaning staffs, workers of readymade garments and small footwear and leather products, school banking facilities and so forth are also considered as CSR activities. Even the financial literacy/education and financially inclusive programmes are recognised as the CSR engagements. And these terms are used interchangeably now-a-days.
The Bangladesh Bank (BB), the central bank of the country, has taken initiatives in respect of formalising CSR in the banking sector. It has issued an elaborate directive to banks and financial institutions in this regard. It has defined the strategic objectives for CSR engagement, provided some priority areas with a suggestion to foster CSR in their client businesses.
The BB has suggested a first-time CSR programme indicating some likely action plans. For instance, the central bank considers that CSR stimulates the financial sector's accountability to society while the Environmental Risk Management (ERM) requires inclusion of environmental risks in its main framework. The central bank has been monitoring CSR adoption and performance of banks and financial institutions as an additional dimension of their management performance.
Banks in Bangladesh are maintaining generally caring and safe working environment. Community engagements of the banking sector's CSR programmes focus both emergency humanitarian and disaster relief as extending help to the hapless segment of the population in terms of healthcare, education and training. As such, CSR initiatives of banks include reaching out to financial inclusion campaigns for the under-served rural and urban population segments with financial services including financing for their productive farm and non-farm micro-, small- and medium-sized enterprises.
Banks have deepened and broadened CSR activities substantially.  In 2013, CSR expenditure of banks totalled Tk 4.47 billion showing more than 45 per cent growth over that in 2012. Besides, some banks are running their own non-profit hospitals and diagnostics establishments. Banks are becoming more gender sensitive, recruiting more women and implementing maternity leave for six months. Some banks are focusing more on disability by placing bright but physically challenged people at various operational segments within the banks. Thus, financial services have reached the doorsteps of the ultra poor, landless, small farmers, sharecroppers, small traders and poor women. These activities are adding a new dimension to poverty alleviation and building social safety net.
Like the conventional banks, the Islamic banks have inculcated financial inclusiveness in their banking business wholeheartedly. They have streamlined their activities promoting sustainable inclusive growth and offered financial services to the doorstep of all people of the country modernising payment systems like i-banking, mobile banking etc. to make it more inclusive. Their CSR activities are very comprehensive and have depth in terms of various dimensions like environmental impact assessment in project financing decisions, and gender issues in workforce composition and internal working environment since their inception in 1983. These banks also encourage their valued client businesses to expand or initiate CSR engagements, offering them helping hands with know-how and incentives, perhaps by way of favoured customer treatment and feasible rebates on profit rates and fees on banking services. Moreover, their CSR activities are integrated towards the efforts of accelerating poverty eradication with inclusive, environmentally sustainable economic and social development and opening up fair advancement opportunities for all in the country.
CSR programmes of banking businesses can bridge the market failures and market gaps that limit the access of the poor to the services necessary for their well-being. These programmes can go a long way in reducing deprivation and widening the access of rural and urban poor to basic social and financial services necessary for healthy, enlightened and productive life. CSR programmes should include steps for measuring and tracking the ecological footprints of the business activities focusing on carbon neutrality.
Bangladesh is a developing country with modest resources. It is pertinent that we should utilise our assets most productively. So, we should make an endeavour to have an integrated CSR policy enhancing strategic interactions. As the country faces a grim future in terms of environmental degradation, banks should divert their CSR resources to projects that will meet the challenges of climate change effectively.
The writer is a banker.                smaacca@gmail.com