How CSR Is Shaping UAE Business Banking
CSR’s Rising Role in UAE Business Banking: A Win for Companies and Communities
Corporate Social Responsibility is a self-regulated business practice that aims to serve the community and integrate social, environmental, and ethical concerns into its operations and interactions with people. This concept goes beyond making a profit and serves society. The banks of UAE are emphasizing Corporate Social Responsibility and identifying their obligations to contribute to society, environmentally and economically. Consequently, this concept addresses social and environmental challenges.
In this article below, we will discuss the CSR culture in the UAE banking and businesses, the area covered by them, Philanthropic endeavors, and prospects of the CSR in the UAE.
What is Corporate Social Responsibility (CSR)
CSR is a responsibility model for businesses by which companies make plans and efforts to serve society and the environment, going beyond the profits. This approach improves the scenario of overall society and the surroundings. CSR includes some categories like environmental impacts, ethical responsibility, philanthropic endeavors, and finance-related responsibilities. The Corporate Social Responsibility programs are aimed to not only benefit the society but also boost their brand value.
Areas Covered by Corporate Social Responsibility
Environmental Sustainability: Corporate social responsibility is aimed to serve the surroundings and the environment. Companies can benefit the environment by pursuing environmental stewardship. Environmental stewardship is to reduce environmental pollution and harmful gas emissions in manufacturing. Moreover, this program also includes recycling the by-products, replenishing natural resources, saving biodiversity, and keeping the product line consistent.
Ethical Responsibility: Another condition of corporate social responsibility is treating clients appropriately, ethically, and fairly. This includes fair treatment of clients regardless of their gender, culture, and age. Also, it should have a proper payment system for employees and vendors and maintain transparency for investors.
Community Development: Corporate social responsibilities include fair labor practices, diversity and inclusion, and maintaining transparent governance.
Philanthropic Responsibility: Corporate Social responsibility includes philanthropic endeavors. These include donating profit to Charitable activities, sponsoring fundraising events, and more.
Internal Governance: Corporate Social responsibility programs support small businesses located in small areas. Moreover, to boost local economic resilience, they promote many literacy programs and arrange workshops. These foster the development of an underrated community.
Financial Responsibility: Companies must serve the environment and society. Again, they must invest in research and development for sustainable products and implement DEI, social awareness, and a diverse workforce.
Why is CSR in Banking Advantageous?
Building Consumer Trust: Corporate Social responsibility is crucial for building consumer trust. Nowadays, consumers are very conscious and go with socially responsible brands. Consumer trust is important for overall improving the condition of the company and building a long-term relationship. CSR in banking boosts this consumer trust not only by good and fair investment but also through local targeted audience. This includes financial literacy programs in local schools, sending financial aid to the senior care homes, and creating public awareness. Thus, the CSR funds are used for local occasions and environmental cleanup programs.
Positive Customer Outreach: Corporate social responsibility provides positive customer outreach through making the communities participate in many social events. This brings huge publicity and brand value for the company. These initiatives positively impact on public psychology regarding an Organization. For example, banks and other organisations that are engaged with giving donations those are considered more philanthropic in comparison to others and those who do nothing. Promoting literary programs and other voluntary activities can help bring such positive client reviews.
Consumers Appreciation: According to surveys, 55% of clients and consumers are willing to pay more for products from institutions that maintain corporate social responsibility.
Enhance Productivity: CSR in banking offers good deals in terms of positive marketing, consumer engagement, and trust. These initiatives boost employee engagement and productivity. A study shows that the employees of socially responsible banks are 60% more actively engaged with the work than those of other banks that do not maintain social responsibilities. It’s mentionable that not everyone is interested in such investments, but the number is gradually increasing and creating positive impacts on the work environment. Hence, it would have a great deal over time, which will reflect customer service, engagement, employees' creativity, and overall operations.
Create Value for the Company:
The fundamental aim of maintaining CSR is to get an improved public image, good media coverage, and more brand awareness. However, the most important factor in this regard is that, literate the small community in a conscious way is the result that the community will make good financial decisions and investments. Furthermore, they will learn about tools and strategies for managing debt properly and making good investments of their savings. They will be able to learn about home loans and mortgages. Finally, they will find out the improved ways to manage expenses. This will result in positive economic growth for the community.
Example from Bank of Sharjah UAE
The Bank of Sharjah is a socially responsible bank that has brought many significant changes to Sharjah and the region of the UAE. The bank is engaged in sustainable development strategies in its core operations and making partnerships with businesses to achieve positive growth. The bank's philosophy includes the socio-economic development of the local community, the welfare of the community, the satisfaction of the clients, and overall promoting environmental protection.
Their CSR policies include-
Enhancing the environment and promoting sustainable growth, promoting literacy programs, and providing health care facilities to the needy people of the community.
Promoting and preserving a healthy way of life for the community and contributing to the livelihood earning of the people.
Bank of Sharjah is committed to reducing its environmental footprint in alignment with the Paris Agreement of Climate Change.
To fulfill the demands of conscious and modern customers, the Bank of Sharjah is empowered to address the problems faced by businesses by gaining the trust of the stakeholders.
Bank of Sharjah is making fair and good investments in youth, assisting them in having good health and education.
Bank of Sharjah is supporting the new Emiratization strategy launched by the Central Bank of the UAE in 2017.
Philanthropy has always been in the Bank's corporate culture. They support many Charitable Organizations and small communities.
Future Prospects of Corporate Social Responsibility in Banks of the UAE
In the UAE, the importance of CSR can not be ignored, and it will continue to grow. Today's customers are conscious of banks' activities and their spending areas. They research about sustainability and how they use money. They are aware that investing in a socially responsible bank can create a positive impact and bring sustainable economic growth for the Organization.
Key Expectations about CSR in the Future
CSR will be integrated into banks’ operational decisions emphasizing sustainability.
Banks will be more focused on community awareness campaigns on climate issues and the surroundings.
The UAE will take more initiatives to align with the SDGs in collaboration with the banks.
The banks in the UAE will play a vital role in providing eco-financing solutions to facilitate the climate transition.
The UAE Securities and Exchange Commission will focus on transparency in CSR activities, including ESG components mandated by the Global Reporting Initiative (GRI).
The banks will support enterprises aiming to achieve a more inclusive and sustainable economy.
Conclusion
Finally, we can say that, in this era of globalisation and liberalisation, the term Corporate Social Responsibility has become a familiar term. Moreover, the world is heading towards sustainability for a better future. In the last few years, the world witnessed a huge awareness regarding CSR in Corporations, and the aim of organisations is now beyond only making profits; it is more than that, like a holistic approach. No,w stakeholders have become more conscious about environment and fair business practices. Consequently, banks and businesses are getting more concerned about stakeholders, customers, and society around them. The UAE, which is a global trade hub, now wants to go beyond making profits and maintain social responsibility. In addition, many banks have successfully brought changes in society through CSR programs. It's expected to boost the overall social benefit in the future with many more activities.
This is for all business owners, financial consultants, brokers, entrepreneurs, legal consultants, or individuals seeking to finance their business or start a new company. Seek professional help, by reaching out to the contact below, you can get in touch with the author of this blog: WASIQ SUHAIL.
Contact: +971505053319
Email: abz.wasiq@gmail.com
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