This paper aims at investigating the impact of corporate characteristics and corporate governance upon the level and extent of corporate social and environmental disclosure, with special reference to the case of banks. A desk-based research method has been used, by discussing and criticizing, where appropriate, the results of some related studies. The paper confirms the importance of these factors in determining the level and extent of such disclosure.

Many studies have been conducted in order to investigate the reasons behind the differences in corporate social and environmental disclosure (CSED) practices throughout the world. Firm's characteristics, corporate governance, and contextual factors are provided as influential determinants of the level and quality of CSED. The impact of these determinants can be seen in the attitudes and behaviours of the two main parties in the issue of CSED; information preparers and information users. The level and the quality of CSED made by companies can be justified by investigating and understanding what motivates their managers and stakeholders to involve in social and environmental issues. This paper presents the possible reasons which might be better looked at and investigated by researchers, in order to understand the current practices of CSED and to predict the future trend of such practices.

There is no doubt that collecting and analysing information is the key element in the process of decision making. Lending decisions, taken by banks, are not exception. In order to ensure that lending decisions are serving banks' goals, the process of taking such decisions involves, inter alia, gathering and analysing information about the prospective and actual clients, who are seeking loans. Such information is mainly related to the financial performance of banks' clients. The recent trend of considering information other than financial one, particularly in developed countries, seems to be basically enforced, rather than promoted, by power of the law. This can be noted in the increasing interest of banks in environmental information, while social information is still, to some extent, far from the attention of such banks. Other factors, such as religious instructions are suggested to play a role in encouraging banks to consider social information. In the case of developing countries, social and environmental information alike seems to be out of banks attention due to many factors including the absence of related laws and the weakness of desire and capacity for enforcing such laws in case of their existence. This article tries to provide more explanation for these points.

This chapter uses a survey of personnel in Libyan commercial banks, including general managers and credit managers, to investigate how banks perceive and process social responsibility and sustainability information declared by potential borrowers in their credit applications and other documentation. In particular, the chapter considers how the backgrounds and experiences of key bank staff in lending decisions may bias toward or against lending with the disclosure of potential borrower information on social responsibility and sustainability. We also consider the impact of institutional features, particularly the stance of government, in shaping these perceptions and links with action via regulation and the possible influence of business ethics through industry associations.

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