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CCSR Calls on Banks to Pay Heed to Global Trends on CSR

CCSR Calls on Banks to Pay Heed to Global Trends on CSR

Published 11-01-04

Submitted by Centre for Corporate Social Responsibility

The Centre for Corporate Social Responsibility (CCSR) has noted that The Financial Times and Reuters have on 28th October 2004 reported on the need for banks to place more emphasis on community and environmental issues and in their business agenda. This coincides with the financial sector's increasing role in funding international projects which consequently attracts increasing scrutiny and accountability to society at large.

The articles were the backdrop of findings in a released by F&C Asset Management & KPMG and which had 9 Institutions taking part in the survey. The Institutions reportedly are Barclays, HKSB, Morgan Stanley, UBS, ABN Amro, Credit Suisse, Rabobank, Royal Bank of Scotland and Standard Chartered Bank. It was reported by the Financial Times that F&C has stated that "This study will serve to enhance understanding of various factors that can affect long -termed commercial success and financial valuations."

Whilst traditionally there has been scrutiny on business sectors like forestry, oil, mining and others, the banks' roles in funding controversial projects have only recently come under the spotlight of scrutiny and with regards to community, social, and environmental issues. This coupled with earlier moves by investors through Socially Responsible Investment Funds or SRI who pays particular attention on a Banks CSR Policy and through scrutiny on their governance, ethics and human rights makes it hard for local banks to ignore this trend of social accountability.

Increasingly, financial institutions are expected to provide non financial reporting requirements as a part of corporate governance. Most recently, the focus has turned to where funds of banks go to and if customers have in any way misused or abused the funds provided. For instance, in the US, civic societies are using the Alien Tort legislation to bring US companies accountable for human rights abuse committed in the supply chain. An example that directly affects the financial industry worldwide is the introduction of the Sarbanes and Oxley Act 2002 which requires amongst others enhanced financial disclosures and corporate accountability and responsibility by institutions, both an issue of governance and long termed sustainability.

The CCSR is committed to help stakeholders be mindful of global trends in CSR and would encourage banks to play a more proactive role in this area of rising importance. It believes that CSR initiatives are a key part of good preventive risk management, and encourage local banks particularly and other banks in Singapore to keep abreast of the rapid developments in this area, and proactively prepare their organizations to mitigate the associated risk and capitalize on the associated benefits.

Towards this end it is noteworthy that DBS Bank has shown its interest in CCSR's recent move to allow companies to better understand the UN Global compact last week and hopes more banks would step forward to be counted.

Centre for Corporate Social Responsibility

Centre for Corporate Social Responsibility

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