Business Ethics, Responsibility, and Sustainability

This report discusses the concepts of business ethics, responsibility, and sustainability in the banking sector. It explores various CSR activities, key challenges, and best practices within the industry. Recommendations and conclusions are also provided.

Business ethics,
responsibility and
sustainability

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Overview of banking sector ...................................................................................................3
Banking sector CSR activities ...............................................................................................3
key challenges related to corporate responsibility and sustainability within banking sector 6
Best practise within banking sector .......................................................................................9
Recommendations .................................................................................................................9
CONCLUSION .............................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
Business ethics is defined as the analysis of various practices and policies which are
associated with various business concepts like corporate governance, bribery, corporate social
responsibility, insider trading, etc. The corporate social responsibility is defined as the way by
which companies involve in society's welfare (Ahn, Lee, and Yun, 2018). The following report
discusses about various CSR activities within the banking sector. It also discusses about the key
challenges which are associated with the sustainability and responsibility of the banking sector.
There are recommendations and conclusion for the given scenario.
MAIN BODY
Overview of banking sector
Bank is defined as the financial institution which provides financial services and banking
services for the clients and customers. These are known as a subset of financial service industry.
A banking system is defined as the process in which there is management of cash services and
reporting account transactions. There are a lot of facilities as well as opportunities which are
present within customers and clients that are provided by banks globally.
Banking sector CSR activities
There are various responsibilities of business that are done in effective manner for
managing what are the ways in which business is done. There are different requirements for
handling as well as taking care of the various moral values and obligations which provide benefit
to the society. There is need for managing the various practices that are associated with CSR so
that clients and customers will praise the company and organisation. The corporate social
responsibility of business is an important concept which help in business growth and
development (Ali Chughtai, 2016). This is defined as the form of business self regulation within
the business which is offered by the company in order to benefit the societal welfare. The aspect
of corporate social responsibility emphasises upon the change in point which is associated with
the changing needs as well as varying of the social requirements of business. The banking sector
is known to be vast and big. Thus, there are various opportunities in order to manage the work.
There are both private and government organisations working within the banking sector. The
profits earned by the banking sector is high and thus, it is essential to provide contribution within

the corporate social development. The different responsibilities within the CSR to the banking
sector are mentioned below - Ethical responsibilities – This is defined as the responsibility of firm or corporate that are
not covered by the economic or legal requirements. This is considered as the work which
can be said as right or wrong in front of eyes. This means banks must always work by
following all the ethics and do not make trouble for the stakeholders. Economic responsibilities – This responsibility is defined as the organisation which is
associated with the company's responsibility to run business in healthy economic manner.
This focuses upon various aspects like fair employee salaries, investment for the
shareholders, quality products for the customers, etc. Philanthropic responsibilities – There is need of the corporation which includes
willingness for increasing living standard of different stakeholders such as local
community, society, employees, etc (Buchanan, 2017). by involving into various
charitable donations and organisational support.
 Legal responsibilities - This consists of various demands that a company has which are
associated with the present legislation and regulatory requirements. There is need for
having a proper legal framework which helps and fosters the society in ethical manner.
According to this, it is required that company follows all the laws and is not harming
society.
The different practices within of CSR within the banking sector are of great importance
and value. There are various financial institutions and banks which have started involving in the
promotions of socially responsible and environment friendly procedures and projects. There are
different activities and tasks which are related with the undertaking of CSR initiatives in order to
manage the business activities and functions in effective manner. There is need of conducting
various CSR activities and tasks as it will enhance company's reputation within market. As per
business ethics, it is seen that there is need of helping poor and needy society by working
properly and contributing in welfare of society. There is need for developing the activities related
to societal benefit as this enhances the bank reputation within the business environment (Corlett,
ed., 2016). There is need for various organisations to manage the business activities and tasks
properly so that banks are able to achieve assigned targets and goals properly. There are various
major sectors of the CSR that consists of community welfare, children welfare, environment,

education, healthcare, poverty eradication, women empowerment, vocational training, protection
of girl child, etc. Education – There are various banks across the world that provide value and importance
to education. Few banks provide donation to various schools and helped them by giving
fans or air conditioners in classrooms. There is also help provided to the primary school
by giving them help of water cooling facility. Rural Development - There are several banks which have provided the societal help to
various people through education. Different banks are present which are involved in the
rural development of the society. There are various cases in which banks are involved in
the Financial Literacy centres and few are helping villages. Children and women – It is seen that women empowerment is needed for managing the
functioning of CSR within banks. There are several programs related to the girl child or
women empowerment that are functioned through participating in various governmental
as well as non governmental organisations (’Adda, and Et. Al, 2017). Few projects
related to the girl child education are funded by banks for contributing in CSR. Health - This is associated with the involvement of banks within programs related to the
health facilitation. This consists of managing effective functioning of bank in CSR by
providing health care facilities. There are many banks which have started trauma centres
and health care centres in various areas. Few banks are involved in providing ambulance
facility to hospitals and taking care of the poor areas of society. Wheel chairs are
provided to the physically challenged people.
 Social community welfare - It consists of providing welfare activities and projects as a
whole. In context of this category, there are several welfare activities organised by banks
for helping poor and needy people. There are different banks which are involved in the
organising various activities related to the social welfare.
There are a number of CSR which are performed by the companies who are carrying on
their work in the Banking sector successfully (Greenwood, and Freeman, 2018). CSR is now
considered as one of the major business activities these days. There are a number of other
benefits provided by CSR such as it helps in motivating as well as benefiting the employees who
are working in organisation. It is a great way to improve the human resource productivity along
with doing good for the society. They also help organisation in developing a successful and

dedicated team who are working towards the betterment of society and of the organisation. There
have been financial crisis recently which have been decreasing the image of banks but following
CSER will help them to regain and build their reputation in the market place. There are a number
of benefits of using CSR activities which might include development of brand image of the
organisation as well. It is however, difficult to understand whether the firms have serious
concerns for the environment or not. However, it is often seen that companies may not align their
CSR and SRI. The objectives of both of these are often differing (Hemberg, Syrén, and
Hemberg, 2018). All the regulations of company have to support it in its growth. It can be
evidently seen that in the current scenario of banking sector the demands of customers are
increasing heavily. There are also a number of challenges developed due to these demands.
Along with which a number of competitors in the industry is also rising for the companies in the
banking sector. Thus, it becomes necessary for the companies to make sure that they are
effectively running a number of CSR activities in order to effectively face the competition in the
market and stay in the market for a longer period of time.
key challenges related to corporate responsibility and sustainability within banking sector
CSR is defined as as the tool for the sustainable development of companies and
enterprises within the growth as well as improvement of three factors like economic, social and
environmental balances. As per the Business for social responsibility it is said that there is need
of management of CSR in a good way for managing different business aspects like ethical,
commercial and legal (James, 2017). CSR is defined as the complex process that involves
human right issues, fair business practise and consumer relation. Business ethics is sometimes
mixed up with corporate social responsibility because there is need of ensuring various
management patterns which are related with compliance. There is contract with audience in
which stakeholders and audience are established for commitment and sustainability. Within the
banking sector, there are resolute commitment in order to have responsible consumption. When a
company is involved within the CSR activity, the first thing to do is to put the CSR into
company's policy. This is very essential for the company to inform all the stakeholders properly
about the CSR activities. This is common among audience and it is informed to the company
policy that CSR is involved within the company (Lawton, and Páez, 2015). There are various
cases in which there is lack of standards in determining the various corporate sustainability
factors which are implemented for managing company's policies. Banks which are developing

CSR activities are useful for determining the value addition for products and services. The banks
which are implementing rules and policies of CSR within the competitive strategy are most
successful. There is need of managing the business activities in such a way that the
organisational targets are achieved in specified time frame. If banks are able to have a good
competitive strategy then it is easy to develop CSR activities which are with the advanced
position within the business environment.
Social commitment – Banking sector is defined as one of the most important service which is
used by different people across the world. There is need of managing the business activities and
doing proper CSR activities so that it is easy to manage the work (Levy, 2016). There are strict
regulations and rules enforced in order to maintain safety and quality within business. Within
banking industry, there is need of establishing commitment for providing safe and secure
services to customers and clients. The factors related to the commercial factors must be
encouraged as it is helpful for interacting with the productive as well as extractive functions of
the company. This can be concluded with an example – when there is need of involving into
growing communities countries which are having few resources and participation in social
projects are improved for dignity. This is involved in the management of company in order to
involve in various projects that are helpful for improving dignity, education and culture.
Economic engagement – There is need of managing the work effectively so that there is no
problem to the management of company. This is related with the concept of various social aspect
which are involved in replacing various suppliers in order to distant various communities. There
are various cases of momentary cost reduction which is not involved in the compensation of
improvisation. The present market condition consists of managing the environment in proper
manner and doing the CSR activities effectively. There is need of managing the work in effective
manner so that it is easy to plan the service process to the clients and customers. There is a
concept of social aspect which is involved within the banking sector. People visit to banks for
managing their money as well as investments. It is necessary that business activities are managed
properly so that market expansion is easy. There are various long term CSR activities which are
involved in the improvisation of standard of living. There are various challenges that are faced
by the banks while implementing CSR activities. Sometimes the financial institutions like bank
face challenges while implementing the CSR activities and projects. There are various
corporations that are facing difficulty within the implementation of CSR activities. These are

involved in the managing of various activities which are associated with the implementation of
corporate social responsibility and sustainability projects and activities. It has been increasing as
an important activity within the organisation as it includes the following -
 Conceptualisation crisis – The term CSR is related with several activities which are
associated with the managing of societal welfare by the company. There is need for
various companies to provide help to society by involving into various activities such as
funding and campaigns for poor and needy people, involving into various activities
associated with providing welfare for communities and people. CSR can be assigned as
various activities which require to help poor and needy people.
 Lack of public awareness regarding CSR – This is related to the context of education and
awareness programs for making it easy to understand CSR across the geographies and
sectors. If there is no awareness then customers are not able to reward the involvement
of CSR within the company.
 Lack of community participation in CSR activities – When there is lack of interest of
local communities within participating and contributing to CSR activities of the
organisation, then there is need for managing the attributes that there is little or less
knowledge regarding CSR benefits and importance.
 Problems of selecting partners – This is related with the non availability of well organised
and non governmental organisations or companies within rural areas. The companies
must work effectively for achieving the organisational goals and objectives (Pennock,
2015). There is also requirement for having a proper management for conducting the
confidence among local communities.
 Problems of building local capacities - There are various challenges which arise due to
the need for capacity building regarding the non governmental organisations.
 lack of trust on CSR - There are various CSR practices which are associated with the
problem of distrust. There are clients and customers which are assessing the CSR
activities of banks as an emotional as well as social factor that helps to manage the
functions of banks. There are various CSR activities which are temporary and these are
not sustainable.

 Lack of transparency – This is related with the key challenge associated with the banks
for implementing the CSR activities. There is need of managing the work related to CSR
activities so that there is proper management of all the work.
 Challenges of invisibility - There are many CSR activities that banks are involved in and
they are invisible. Media is involved in providing information regarding the importance
of bank and it's role in CSR. When there is spread of effective cases within successful
CSR then there are several initiatives which affects the CSR programs.
 Political pitfalls – When there are cases in which CSR is growing properly then this is
considered as the strategic tool for attaining sustainable development. There is a political
belief that hinders various CSR activities and tasks. There is need to manage the work
related to the CSR activities within bank by managing the attainment of goals and profits
as well.
Best practise within banking sector
The best practise for the corporate social responsibility includes the environmental
support. The banks are helping environment in both direct and indirect manner. There are various
investments and lending activities which are having an indirect impact on business environment.
It is ensured that the credits are being used for managing environment friendly concerns. It is
concluded that there is scene of green investments within business. These are the investments
which are associated with the improvement of insulation of building and managing the
effectiveness of the working of the project related to the CSR activities. There is need of
managing the associated with the managing with the business activities. Banks have to work in
more appropriate manner for working in order to achieve the organisational targets. There is
need to have proper management for environmental projects so that banks are able to increase
their reputation and brand value.
Recommendations
From the above discussion, it can be recommended to the banking sector that if the banks
want CSR as a fruitful process to the strategy and sustainable corporate commitment then there is
need to socially as well as economically involved in promoting the CSR activities.
Banks must create public awareness which are associated with CSR regulations, rules, policies
and procedures that are associated with the academics, people, managers, stakeholders, etc.
because it will help to emphasise upon objectives and aims of CSR.

There are proper guidelines related to CSR activities which are followed within the bank.
There must be skill development initiatives associated with external and internal groups. There
are certain tools and skills associated with the CSR activities and tasks.
CONCLUSION
It is concluded from the above report that banking sector is a profitable industry and it is
involved in the managing of success within less time. It is seen that banking sector is a well
organised industry and it has proper procedures and skills for involving into several activities
related to the accomplishment of business goals. Banks must ensure transparency and build trust
among the CSR activities. There is great importance and value of CSR within the organisation,
There is need of managing the work in proper manner so that companies have the good
capabilities of increasing brand value.

REFERENCES
Books and Journals
Ahn, J., Lee, S. and Yun, S., 2018. Leaders’ core self-evaluation, ethical leadership, and
employees’ job performance: The moderating role of employees’ exchange
ideology. Journal of Business Ethics, 148(2), pp.457-470.
Ali Chughtai, A., 2016. Can ethical leaders enhance their followers’
creativity?. Leadership, 12(2), pp.230-249.
Buchanan, A., 2017. A critical introduction to Rawls’ theory of justice. In Distributive
Justice (pp. 175-211). Routledge.
Corlett, J.A. ed., 2016. Equality and liberty: analyzing Rawls and Nozick. Springer.
d’Adda, G., and Et. Al, 2017. Do leaders affect ethical conduct?. Journal of the European
Economic Association, 15(6), pp.1177-1213.
Greenwood, M. and Freeman, R.E., 2018. Deepening ethical analysis in business ethics. Journal
of Business Ethics, 147(1), pp.1-4.
Hemberg, J., Syrén, J. and Hemberg, H., 2018. Ethical Leadership in a New Light: As Described
by Leaders in Public Healthcare. International Journal for Human Caring, 22(4), pp.179-
188.
James, A., 2017. Constructing justice for existing practice: Rawls and the status quo. In John
Rawls (pp. 69-104). Routledge.
Lawton, A. and Páez, I., 2015. Developing a framework for ethical leadership. Journal of
Business Ethics, 130(3), pp.639-649.
Levy, J.T., 2016. There is no such thing as ideal theory. Social Philosophy and Policy, 33(1-2),
pp.312-333.
Pennock, J.R., 2015. Democratic political theory. Princeton University Press.