To engage or not to engage in corporate social responsibility: Empirical evidence from global banking sector

The Effect of Environmental, Social and Governance Consistency on Economic Results

“…In this regard, a dummy variable is created to differentiate the periods before and after the 2007 financial crash (YEARS CRISIS). Financial industry plays an important role in the economic development and their industrial peculiarities such as self-regulation-e.g., Equator Principles-or explicit economic benefits from outside sources-e.g., public funds to bailout distressed financial institutions-may affect their economic performance [39,54]. For these reasons, this study includes an additional dummy variable in order to reflect differences between finance and insurance industry (FINANCIAL INDUSTRY) and the rest of industries.…”

The Relation between Corporate Social Responsibility and Bank Reputation: A Review and Roadmap

“…All studies in this section were developed by subjecting customers or employees to a survey, interview, or questionnaire, validating the results with specific statistical models.Studies that apply mixed methodologies firstly show that the relationships between CSR and reputation depend mainly on the perceptions that customers and employees have toward the socially responsible policies implemented by banks ( Banks not developing a CSR strategy in the current competitive scenario will surely face serious difficulties in recovering from the financial crisis and will quite surely undermine their own corporate image and reputation .According to Shen et al (2016), "CSR is one of the approaches that can enhance the reputation of banks and acquire a greater sense of trust from customers.CSR is particularly important for the banking industry because banks sell intangible products to individuals who may not be equipped with financial knowledge.Banks sell financial products that mostly have similar risk and returns, resulting in difficulty distinguishing these financial products from one another.Brand recognition among banks helps differentiate financial products, particularly in wealth management. "From the analysis of the studies presented in this section, it emerges that the aforementioned positive relations between CSR and the degree of loyalty and customer satisfaction exist also in relation to the maintenance and retention of employees.…”

“…Dell'Atti et al (2017), adopting a multiple econometric approach, highlighted that bank reputation is positively related to accounting performance and is negatively related to leverage and riskiness.The authors show positive relationships between reputation and social performance and negative relationships between reputation, corporate governance, and environmental performance.This last result is due to the fact that in the banking sector there is still no strong focus on the environmental impacts of banking activity.On the other hand, Sneekes et al (2016) show that banks that perform highly on CSR indicators behave more transparently with regard to the presentation of earnings.Banks that engage in CSR activities to improve their reputation use managerial discretion to show socially desirable earnings numbers.For banks that value their reputation, pursuing societal trust is more important than the fulfilling of self-interest.In addition, bank managers should pursue CSR practice as a long-term survival strategy to enjoy different benefits, including enhanced reputation (Shen et al, 2016). Forcadell and Aracil (2017) show that banks' efforts to build a reputation for CSR benefits performance.Nevertheless, in periods of crisis, these efforts do not contribute to improved returns.According to the authors, investments in CSR can be justified as a way to boost both corporate reputation and firm performance, because CSR is a mechanism that contributes to restoring a tarnished reputation.In line with the reputation-building hypothesis, Jo et al (2015) highlight that good environmental management provides firms with a reputational advantage that leads to increased marketing and financial performance.A major contribution of these quantitative studies is empirically testing the relationship between CSR and reputation and its impact on economic performance in the banking sector.In addition, these studies look at managerial behavior and its impact on banks' reputation.…”

Online Corporate Social Responsibility Reporting in the Croatian Banking Sector

“…Also, banks and other financial institutions are large consumers of paper and energy, and produce waste. Banks can have a major influence on society through financing industries that support unethical activities such as smuggling of arms, diamonds and the like (Shen, Wu, Chen, & Fang, 2016). Also, according to Wu and Shen (2013), during the financial crisis, governments of many countries financed recovery of banks using public or state funds and the role of banks in corporate social responsibility is to compensate for the funds spent.…”

“…Furthermore, in many countries banks are exempt from tax (VAT). Finally, corporate social responsibility role of banks is determined by their positive influence on building trust among customers and reputation (Shen et al, 2016) as well as achieving financial success (Nollet, Fillis, & Mitrokostas, 2016).…”