Analyzing CBA's Corporate Social Responsibility and Ethical Violations

This report provides a comprehensive analysis of the Commonwealth Bank of Australia's (CBA) Corporate Social Responsibility (CSR) activities, ethical violations, and financial decisions. It begins by evaluating CBA's practices and financial strategies in relation to its CSR initiatives, categorizing them into governance, social, and environmental practices. The report then assesses the importance of sustainability and social responsibility for CBA, highlighting its impact on the bank's core business and its commitment to various ESG (Environmental, Social, and Governance) frameworks. Furthermore, the report identifies specific ethical principles breached by CBA, such as honesty, integrity, loyalty, and fairness, linking these violations to issues like money laundering and manipulation of medical reports. Finally, the report discusses the ethical violations in the context of ethical theories, including egoism and utilitarianism, offering a critical examination of CBA's actions and their ethical implications.

Running head: PRINCIPLES OF FINANCE
Principles of Finance
Name of the Student
Name of the University
Author’s Note

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Table of Contents
Introduction......................................................................................................................................2
Evaluation of CBA’s Practices and Financial Decisions with Respect to CSR Activities..............2
Importance of Sustainability and Social Responsible Outcome for CBA.......................................3
Identification of Ethical Principle Breached by CBA.....................................................................4
Discussion of Ethical Violation with Ethical Theories....................................................................5
Conclusion.......................................................................................................................................5
References........................................................................................................................................6

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Introduction
In today’s business world, Corporate Social Responsibility (CSR) is considered as a
major pillar for the success of the businesses. CSR refers to a particular business approach that
has major coronation of towards sustainable development of the companies by delivering social,
economic and environmental benefits to the stakeholders (Schwartz 2017). In recent years, it has
been seen that the Commonwealth Bank of Australia (CAB) has been involved in the violation of
different CSR principles with their business activities. This report takes an honest attempt to
analyse and evaluate various aspects of CSR activities of CBA.
Evaluation of CBA’s Practices and Financial Decisions with Respect to CSR Activities
CAB is regarded as one of the major banks of Australia providing different types of
financial services to the Australians. It needs to be mentioned that CAB follows some practices
and financial strategies to make financial decision making that have some connection with
various CSR activities of the bank. For the identification of the relation of practices and financial
decagons with the CSR activities, it is required to shed on them (commbank.com.au 2018).
Three main categories can be seen in the practices of CAB; they are Governance
practices, Social Practices and Environmental Practices. The policy of governance of CAB
ensures professionalism, honesty, commonsense and fairness in the banking practices. The main
objective of CAB is to implement the highest practice of corporate governance. Moreover, CAB
always ensures the correct payment of their taxes (commbank.com.au 2018). In addition, CAB
has various practices to fight with bribery, corruption, money laundering, fraud and others. The
social practice of CAB ensures human rights, financial inclusion, diversity, responsible
procurement and others. Apart from these, CAB has also developed strategies to fight with
different environment factors like environmental management, climate change, responsible
investing and others (commbank.com.au 2018).
As a part of the financial strategies, the main aim of CAB is to provide the Australians
with the required financial services like banking, fund management, insurance and others. Over
the years, there has not been any change in the financial strategies of the bank
(commbank.com.au 2018). The board of CAB has taken the decision of reviewing the

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remuneration strategy, framework and governance in order to provide transparency and
accountability. Apart from this, CAB also taken the decision of strengthening the business of
CommInsure and other business segments. These are the major financial decisions of CAB
(commbank.com.au 2018).
In the areas of CSR, the main approach of CAB is to launch various CSR programs and
initiatives in order to assist the customers, support the communities and to ensure minimum
impact on the environment. In order to increase the value of contribution towards the society and
environment, CAB does the review of the emerging social and environmental issues for the
development of effective CSR strategies. As a part of the CSR strategies, CAB has implemented
different CSR strategies like carbon reporting, climate disclosure, respecting human rights and
many others (commbank.com.au 2018).
The above discussion indicates towards the presence of a positive connection between
the practice and CSR principles of CAB. It can be said that the CSR principles of CAB is a large
part of the practices of the bank. In the part of social and environmental practices, CAB has
implemented different strategies by complying with the principles of CSR. However, the above
discussion also indicates towards the absence of any connection between the CSR practices and
financial decisions of CAB. It can be observed that CAB has taken the financial decisions by not
considering any principles of CAB as the focus is to increase the business of the bank.
Importance of Sustainability and Social Responsible Outcome for CBA
In Australia, CBA is well regarded for their sustainability strategies and social activities.
From the analysis of the sustainability report of CBA, it can be observed that sustainability,
social responsibility is the daily focus area of CBA, and the development of various
sustainability approaches can be seen for over the years (canstar.com.au 2018). Moreover, CBA
considers their social responsibilities as one of the major parts of their business. As CBA is a
major financial institute, it plays an integral part in the social development of various aspects like
job creation, growth of the people of Australia, innovation and others. Thus, for CBA, the
different sustainability and social responsibility related decisions they make have direct impact
on the core business of them (canstar.com.au 2018).

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As a part of the diversity and inclusion strategy, CBA has achieved 35 percent women in
the role of senior management; and the target is to reach 40 percent by 2020. Moreover, CBA
has developed a framework for the integration of Environmental, Social and Governance (ESG)
towards contributing more towards the sustainability and social responsibilities. It can be
observed that CBA uses to provide industry-leading disclosures for carbon emission arising from
the business-lending portfolio of CBA (commbank.com.au 2018). It needs to be mentioned that
the company has been developing strategies for the continuous improvements of various areas
like waste management, carbon emission, energy, water and others. Apart from this, CBA puts
major emphasis on the engagement of their staffs and employees with these sustainability
strategies and goals so that they can be effectively achieved. Thus, from the above discussion it
can be seen that sustainability and social responsibilities have great priority to CBA as the
outcome of them determines the success of the organization to a large extent.
Identification of Ethical Principle Breached by CBA
In the recent years, CBA has been facing major ethical issues due to their different
unethical business actions. The major allegation on CBA is related with the case of money
laundering. According to the statement of money-laundering watch AUSTRAC, there is a vats
effect of the crime of money laundering of CBA on the common people of Australia as they have
been exposed to major financial risks (abc.net.au, 2018). Apart from this, there has been many
instances of unethical actions from the side of CBA like the misuse of medical reports of
CommInsure, deleting the important files and many others. It needs to be mentioned that all
these actions of CBA have breached some major ethical principles (wsj.com 2018). By
manipulating the medical reports, files and others, CBA has violated the principles of honesty
and integrity. It is required for the management of CBA to be honest and they should maintain
the aspect of integrity. Apart from this, with the actions of money laundering, CBA has also
violated the principle of loyalty and trustworthiness. People keep money in the banks in the
presence of loyalty and trustworthiness (Crane and Matten 2016). The money laundering
activities of CBA breached these two ethical principles. Most importantly, it can be observed that
CBA has failed to continue their business operations in the fair manner and thus they have
breached the principle of fairness. When analysing all these issues, the involvement of the senior
management of CBA has been found (Weiss 2014). From this particular aspect, it can be found

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said that the management team of CBA has violated the ethical principle related with the
leadership. Thus, based on the above discussion, it can be seen that CBA has breached some
major ethical principles.
Discussion of Ethical Violation with Ethical Theories
It needs to be mentioned that there are different types of ethical theories that can be
related with violation of the ethical principles of CBA. In this context, the ethical theory of
egoism needs to be mention. The theory of egoism refers to act in someone’s own interest. In
case of CBA, the involvement of the senior management of the bank can be seen in various
unethical cases. Thus, the egoism theory indicates that the management of CBA has their own
interest behind all these manipulations (Broad 2014). Apart from this, in this situation, the theory
of utilitarianism can be mentioned. This particular theory states that being ethical is to do
greatest good things for a great number or people. In case of CBA, it can be seen that the
management of the bank has failed to do good things for the people of Australia due to the effect
of different non-ethical activities like money laundering, manipulation in the medical reports and
many others (Mill 2016). Apart from this two, there are many other ethical theories that can be
presented in the unethical case of CBA like virtue ethics theory, contract theory and others.
Conclusion
The above discussion analyses various aspects of CSR activities of CBA. From the above
discussion, it can be seen that there is a positive relation between the practices and CSR activities
of CBA where the lack of connection can be seen between CSR activities and financial
decisions. The above discussion also states the CSR outcomes matter for CBA, as they are major
success factor of the company. From the above discussion, it can be seen that CBA has violated
some major ethical principles like honesty, integrity, trustworthiness and others. Some major
ethical theories in this context are egoism theory, utilitarianism theory and others.

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References
ABC News. (2017). Will CBA senior management at last be held to account?. [online] Available
at: http://www.abc.net.au/news/2017-08-03/commonwealth-bank-latest-scandal-might-be-the-
one-that-hurts/8772390 [Accessed 30 Mar. 2018].
Broad, C.D., 2014. Five types of ethical theory (Vol. 2). Routledge.
Canstar.com.au. (2018). Commonwealth Bank Focus on Sustainable Business Practices. [online]
Available at: https://www.canstar.com.au/home-loans/buying-next-home/commonwealth-bank-
sustainable-business-practices-a-constant-focus [Accessed 30 Mar. 2018].
Commbank.com.au. (2018). Annual Report 2017. [online] Available at:
https://www.commbank.com.au/content/dam/commbank/about-us/shareholders/pdfs/2017-asx/
Annual_Report_2017_14_Aug_2017.pdf [Accessed 30 Mar. 2018].
Commbank.com.au. (2018). Commonwealth Bank implements sustainability policies and
practices . [online] Available at: https://www.commbank.com.au/about-us/news/media-
releases/2015/commonwealth-bank-implements-sustainability-policies-and-practices.html
[Accessed 30 Mar. 2018].
Commbank.com.au. (2018). Corporate Responsibility Report 2017. [online] Available at:
https://www.commbank.com.au/content/dam/commbank/about-us/shareholders/pdfs/corporate-
responsibility/2017/2017-corporate-responsibility-report.pdf [Accessed 30 Mar. 2018].
Commbank.com.au. (2018). Policies and practices. [online] Available at:
https://www.commbank.com.au/about-us/opportunity-initiatives/policies-and-practices.html
[Accessed 30 Mar. 2018].
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Mill, J.S., 2016. Utilitarianism. In Seven Masterpieces of Philosophy (pp. 337-383). Routledge.
Schwartz, M.S., 2017. Corporate social responsibility. Routledge.

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Stewart, R. (2018). Commonwealth Bank Faces Ethics Check. [online] WSJ. Available at:
https://www.wsj.com/articles/commonwealth-bank-faces-ethics-check-1503945230 [Accessed
30 Mar. 2018].
Weiss, J.W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-
Koehler Publishers.