Beruflich Dokumente
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COMPARATIVE
ANALYSIS
OF
CORPORATE
SOCIAL
ABSTRACT
This paper is a comparative analysis of public and private sector bank in India i.e. State Bank of
India and ICICI bank on the basis of quality of the Corporate Social Responsibility report as per
sustainability reporting indicators given by Global Reporting Initiatives. Data of two financial
years i.e. 2012-13 and 2013-14 have been collected from publicly available information through
company websites, annual reports, Business Responsibility report, third-party websites and other
nonfinancial information disclosure used to gather base information for the study. Qualitative
analysis has been conducted by using seven key quality aspect with the appropriate scoring
weightage criteria assigned to each of the quality aspects. Results of this study show that the
quality of CSR reporting of public and private banks are average. The quality can be improved
by addition of certain indicators. Main limitation of this study is that it is based only on
secondary data and sample size i.e. two banks, is small. This study can be conducted on larger
sample size.
Keywords: Business Responsibility Report, Corporate Social Responsibility, Global Reporting
Initiatives
INTRODUCTION
Corporate social responsibility reporting plays a vital role in performance of an
organisation. Inorder to sustain the long run the corporates are required to perform socially and
economically. CSR reporting enables to improve organisations value, governance, its
commitment towards various stakeholders. In India, regulatory developments over the past three
years have set the momentum for higher CR reporting rates.
1
Email:clement.cabral@gmail.com
Foundation), and on the Banks financial inclusion initiatives. The above expenditure has been
undertaken by the Bank, directly and through ICICI Foundation, primarily on
Elementary education
Primary healthcare
Financial inclusion
Company websites
Annual reports
Third-party websites
The Sample - For the purpose of study, the largest public sector bank in India, State Bank of
India is selected and largest private sector bank in India, ICICI Bank is selected. These banks
mandate through Clause 55 of the listing agreement with stock exchanges in India makes
Business Responsibility Reporting compulsory.
Statistical Tools Used - Percentage is used for analysis. A checklist is prepared to study the
Corporate Social performance on the basis of social performance indicators given by GRI G3
guidelines.
Reliability of data - Data is collected from annual and sustainability reports which are authentic
and reliable source of collecting secondary data as these reports are audited externally.
Results and Discussions - Qualitative analysis was conducted by using seven key quality aspect
( maximum score of 100) with the appropriate scoring weightage criteria assigned to each of the
quality aspects. The seven key quality aspects were considered from Global Reporting Initiatives
G3 Sustainability Reporting Guidelines. For detailed study these seven key quality aspects were
again divided into twenty five sub criteria as mentioned. Inorder to quantify the data four points
(25/100) each was assigned to sub criteria. If sub criteria is present in the BR report, four points
is assigned and absence attracts zero points. Two points is assigned if the bank satisfies half of
the criteria. The aggregate point obtained by both banks are computed and scaled. If the
aggregate point falls between 0-20, 20-40, 40-60, 60-80 and 80-100 corresponds to very poor
quality, poor quality, average, good quality and very good quality respectively.
FINDINGS
1. Strategy, risk and opportunity
Businesses today operate in an increasingly resource constraint world and are exposed to an
array of sustainability megaforces which will impact the way businesses will operate in the long
term. These megaforces are complexly interconnected with the potential to amplify the impacts
multi-fold. Megaforces include deforestation, climatic changes, energy and fuel, material
resource scarcity, water scarcity, population growth, wealth, urbanisation, food security and eco
system decline.
Qualitative
aspects
1.Strategy, risk
and opportunity
Sub criteria
of India
4
10
10
With ever expanding global complex supply chains and diverse customers base,
companies will have to demonstrate the understanding of a full range of impacts of these
sustainability mega forces and articulate appropriate strategies to minimise risks and maximize
opportunities that these megaforces present as well as in the future.
1.1
Yes, SBI and ICICI bank are aware on social and environmental mega forces and their
impact on the business. Among the megaforces, SBI gave more importance to environmental
megaforces such as energy and fuel, climatic changes, deforestation, ecosystem decline and
material resource scarcity. But, there is no mention about water scarcity. SBI states social
megaforces such as food security and urbanisation.
ICICI bank gave more importance only to environmental megaforces such as climatic
change, energy and fuel, material resource scarcity, water scarcity and ecosystem decline. The
Bank through its Technology Finance Group assists projects that promote clean technology,
preserve biodiversity and protect the environment. ICICI Foundation focuses on social initiatives
such as elementary education, sustainable livelihoods, primary healthcare and financial
inclusion.
1.2
Yes, SBI and ICICI bank understand about the risks and opportunities, and but, fails to
quantify the resulting risks and opportunities. Both banks has understanding about several
opportunities such as innovation, cost savings, improving market position, improving reputation,
improving employee motivation etc. However banks fail to quantify these risks and
opportunities.
1.3
Yes, there are strategies in place to minimise risk and exploit opportunities and is clear
about the actions taken. SBI introduces sustainable products and services such as SBIePay for ecommerce, State Bank MobiCash Easy a mobile wallet, Green Channel Self Service Kiosk,
Green Remit Card, prepaid cards like Smart Payout card, Ez Pay Card, VishwaYatra Card etc.
are some of the initiatives of the Banks green initiatives and have social benefits also.
ICICI bank provides sustainable banking products to cater to different classes of
customers through an expansive ATM network, mobile, phone, internet, doorstep banking.
Customised products include personal loans, home loans, loans for asset purchases and a wide
range of accounts and deposits. The Bank also offers a selection of cards for convenience to
complement the distinct lifestyle needs of customers. In addition, the Banks Rural & Inclusive
Banking Group focuses on rural and below poverty line customers.
2 . Materiality
Materiality means the information in a report should cover topics and Indicators that
reflect the organisations significant economic, environmental, and social impacts or that would
substantively influence the assessments and decisions of stakeholders.
Qualitative
aspects
2.Materiality
Sub criteria
of India
4
material issues
2.2 Regular materiality assessment which is
stakeholders
2.3 Consideration of internal and external
Yes, Business Responsibility Report of SBI has clear identification and disclosure of all
material issues. SBI, under community service banking, various welfare and social activities are
undertaken by the Bank both in Banking and Non-Banking areas to raise the quality of life of the
downtrodden and under-privileged sections of society Environmental factors are achieved by
launching sustainable products and services, environmental friendly initiatives etc.
ICICI bank has clear identification and disclosure of all material issues. The Bank
through its Technology Finance Group (TFG) involved in social initiatives such as soft
loan/grant assistance to entities engaged in a number of activities that benefit the underprivileged, including medical research & facilities and vocational training & rehabilitation of
physically challenged persons (including defence personnel who have suffered injuries as a result
of which they are unable to continue in the defence forces). The environmental initiatives
undertaken through Technology Finance Group (TFG) includes soft loan/equity/grant assistance
for development & distribution of fuel efficient cook stoves & solar lanterns, seed-stage
sustainable energy and clean technology development and wildlife & forest conservation.
2.2
There is no regular materiality assessment in SBI and ICICI bank, which can be
considered as an ongoing process to assess the changing significance of issues to the business
and its stakeholders
2.3
Both banks have no consideration of internal and external stakeholders inputs for
assessing materiality
2.4
The banks have management approach for material issues to improve performance. SBI
has laid down a well-defined Code of Conduct for its Directors on the Central Boarde and ICICI
through the Group Code of Business Conduct & Ethics. This Code of Conduct attempts to set
forth the guiding principles on which the Bank operates and conducts its daily business to
improve performance.
3. Targets and indicators
Well defined targets and key performance indicators (KPIs) are important for companies
to achieve continual improvement and to drive innovation. Targets have to be linked to material
CSR issues. Clear baselines need to be established along with timelines to monitor progress and
achievement. Targets have to be supported by defined KPIs to measure and manage the
achievements.
Qualitative
aspects
3. Targets
and indicators
Sub criteria
of India
4
issues
3.1
0
4
0
4
The budget for the SBI Corporate Social Responsibility (CSR) spending for FY 13-14
was 1% of the previous years PAT which amounts to INR 141 crores. The Banks actual spend
on CSR activities for FY 13-14 was INR 148.93 crores. ICICI has approximately spent 2.0% of
its average profit after tax for the three financial years ending March 31, 2012, March 31, 2013
and March 31, 2014.
3.2 No data to specify targets to relevant material CR issues.
3.3 KPIs for targets to measure progress against targets are absent in the BR report of both banks
3.4 Banks fail to disclose performance against CR targets.
4. Supply Chain
Corporate social responsibility issues beyond their own operations have a far greater
impact on businesses and thus it is imperative for companies to identify such CSR issues across
the value chain environmental and social issues of supply chain; environmental and social
concerns related to products and services. There is also growing stakeholder pressure on
companies to acknowledge and address especially supply chain CR issues. Owing to the nature
of complex supply chains and limited influence on customer choices, it is rather difficult to
measure and mitigate value chain CR issues. This requires concerted efforts by companies to
have constant dialogue and partnership with suppliers and also innovate for sustainable products
and services.
Qualitative
Sub criteria
aspects
4.Suppliers
of India
0
Bank
0
0
0
0
0
Both banks has no formal CR requirements for supply chain and development of
mechanisms to improve supplier performance
4.2
Yes, SBI and ICICI bank has involvement with suppliers to help them address their CR
impacts
4.3
4.4
No, SBI has no targets for reducing the impact of supply chain and measure the progress
against these targets
4.5
State Bank of India has no identification of social and environmental impacts associated
with the use and disposal of products and services
State Bank of India and ICICI banks banking operations do not have a complex supply
chain and thus the business partners ie. Suppliers and distributors are also quite limited, which
leaves very little scope for the engage them in its Business responsibility initiatives. The bank
expects and encourages its supply chain to conduct their business in a responsible manner.
5.Stakeholder engagement
The stakeholder engagement means identifying its stakeholders and explain in the report
how it has responded to their reasonable expectations and interests. Stakeholder engagement
processes can serve as tools for understanding the reasonable expectations and interests of
stakeholders. Organisations typically initiate different types of stakeholder engagement as part of
their regular activities, which can provide useful inputs for decisions on reporting.
Qualitative
Sub criteria
aspects
5.Stakeholder
of India
4
engagement
key stakeholders
5.1
Yes, the SBI has process in place to identify and engage key stakeholders. The Banks
approach to stakeholder engagement helps to minimize risks, identify ideas for new products and
services, and understand and respond to the issues that matter to the communities it serves. The
Bank communicates with the stakeholders through a variety of channels, such as e-mails,
website, conference call, Press Meets, Advertising, one-on-one meeting, analysts meet and
attendance at Investor Conference throughout the world. Stakeholder engagement is embedded in
all areas of the Bank. The Bank seeks feedback through all their customer-facing channels,
listens to all shareholders concerns and provides opportunities for employees to provide
feedback. The engagement with stakeholders is through social media like Facebook & twitter,
and active participation in a variety of industry and community associations.
ICICI bank through its various financial inclusion initiatives are expanding its outreach to
rural and semi-urban markets and providing financial solutions to customers in this market. The
banking and the financial services being provided by the Bank to the unbanked and below
poverty line customers is providing an opportunity to the target customers to improve their
livelihoods. ICICI Foundation encourages the active engagement of key stakeholders such as the
Governments, NGOs, Panchayati Raj Institutions (PRIs), communities and other local
institutions in the project planning and implementation to facilitate developing and building
community ownership while ensuring the sustainability of the programmes
5.2
Yes, State Bank of India has response to stakeholder feedback and action taken where
necessary. The Banks vision statement clearly spells out the centricity of the customer in the
Banks business strategies and operations. A multi-tiered structure of committees constantly
review existing services and suggest improvements. Important issues raised by these Committees
and action taken thereon, as well as analysis of the consolidated data for customer grievances for
all Circles are placed before the Customer Service Committee of the Board every quarter, to
identify common systemic and policy issues that require rectification.
ICICI bank has response to stakeholder feedback and action taken where necessary. But
elaborate details are not mentioned in the BR report.
5.3
No, The Banks have no process to seek and gather stakeholder views on CR reporting
6. Governance of CSR
CSR governance structure at the apex levels with clearly defined roles and
responsibilities demonstrates the commitment of an organisation to integrate CR across levels
and functions. Board level oversight on CR will enable the Board to understand broader CR
trends that affect long term sustainability of the company and provide strategic guidance to
address them.
Qualitative
Sub criteria
aspects
6.Governance
of India
4
for CSR
remuneration exists.
Total
6.1
Yes, SBI and ICICI have a primary person and/or function is assigned with the ultimate
responsibility for CSR at the highest levels of the organisation. The Business Responsibility
Policy is circulated across all Departments / Business Groups / Verticals of the Bank. Further, it
is communicated to all employees through induction programs, orientation sessions and internal
portals. The designated Nodal Officer (BR officer) heads the BR function of the Bank. He / She
reports directly to the Managing Director & Group Executive (NB), and is responsible for
implementation of the policy, identification of various initiatives and ensuring their effective
implementation by the BR Function staff. The BR Officer, who would head the BR Function is
responsible for implementing the BR initiatives, provide clarifications on the policy, guiding the
staff in implementation, review the results, audit, impact assessment etc.
6.2
basis and report to the company Board. The head of each Bank unit (Branch / Department /
Business Group / Vertical) is responsible for compliance of the BR Policy. He / She would
update the BR Officer about the policy implementation, initiatives taken, discriminatory
complaints received, cases of incidents of violation of freedom of association and collective
bargaining etc. The BR Officer would update the Top Management. The BR Policy will be
updated from time to time by the BR Officer i.e. General Manager (Corporate Communication &
Change), in the light of amendments to laws, rules and regulations, as applicable, and an annual
review report shall be submitted to the Board.
In ICICI bank, the CSR Committee would comprise of three or more Directors including
at least one independent Director. The Bank has a CSR Committee which is duly constituted in
accordance with the provisions of the Act with respect to its composition and terms of reference.
6.3
Non existence of linkage in State bank of India and ICICI banks Corporate Social
Qualitative
Sub criteria
aspects
7. Transparency
on-year
7.3 Presentation of monitored performance,
available to stakeholders.
Total
10
10
7.1 SBIs BR report highlights more positive achievements and misses out reporting the key
challenges and dilemmas.SBI has several achievements such as 10,000 of the 15,869 branches
are located in rural and semi urban areas, leader in agricultural finance, have more than 48,000
ATMs making it the one of the largest ATM networks in the world and its ATMs are located in
all parts of the country including some of the remotest and inaccessible parts, one of the largest
employers in the country having 2,22,033 employees, 100% coverage under financial inclusion
in 31,729 villages during FY 2013-14 etc
ICICI banks BR report highlights more positive achievements and misses out reporting
the key challenges and dilemmas. The bank states about achievements such as launch of
sustainable banking products to cater to different classes of customers through an expansive
ATM network, mobile, phone, internet, doorstep banking. Customised products include personal
loans, home loans, loans for asset purchases and a wide range of accounts and deposits. Selection
of cards for convenience to complement the distinct lifestyle needs of customers etc.
7.2 State Bank of India and ICICI bank use data to monitor performance since 2012-13.
7.3 SBI and ICICI bank prepares Business Responsibility report in accordance with SEBI
requirements and published on an annual basis. The BR report of SBI can be accessed at banks
website http://www.sbi.co.in or http://statebankofindia.com under the link Corporate Governance
CSRBR Report. The BR report of ICICI bank can be accessed at banks the hyperlink
http://www.icicibank.com/aboutus/annual.html.
Qualitative aspects
Maximum
State
points
12
India
10
10
2 Materiality
16
16
20
4
4
4
4
5. Shareholder Engagement
6. Governance of CR
12
12
8
8
8
8
10
52
10
52
12
Total 100
Bank
of ICICI Bank
The above data indicates the score obtained by State Bank of India and ICICI bank after
assessing with seven qualitative aspects.
SBIs scores 52 points out of 100 points (falls in the range of 40-60) which shows its
CSR Reporting is average.
ICICI bank scores 52 points out of 100 points (falls in the range of 40-60) which shows
its CSR Reporting is also average.
SBI and ICICI banks CSR reporting scores high points in strategy, risk and opportunities
as well as transparency and balance.
SBI and ICICI banks CSR reporting scored lowest in supply chain and satisfied only
one criteria.
SUGGESTIONS
Inorder to improve the quality of CSR Reporting the public and private sector banks need to
inculcate several qualitative sub criteria such as
Quantify the resulting risks and opportunities
Continuous regular material assessment
Consideration of internal and external stakeholders inputs
[1].
Md. Abdul Kaium Masud, Mohammad Sharif Hossain, 2012, Corporate Social
[15]http://www.globalreporting.org/resourcelibrary/G3-Sustainability-Reporting-Guidelines.pdf
[16]http://www.icicibank.com/managed-assets/docs/investor/annual-reports/2014/ICICI-BankBusiness-responsibility-report.pdf
[17http://www.icicibank.com/managed-assets/docs/investor/annual-reports/2015/icici-bankbusiness-responsibility-report.pdf]
[18] http://www.icicibank.com/managed-assets/docs/about-us/ICICI-Bank-CSR-Policy.pdf