About CSR

Introduction

Corporate Social Responsibility (CSR) is the idea that a company should play a positive role in the community, consider the environment and social impact of business decision. CSR is both short and long-time bound strategy to achieve a balance of economic, environmental and social imperatives (Triple Bottom Line Approach). It is not only philanthropic but also address the key sustainable development challenges through actionable programs and community engagement to a considerable extent. This type of fund helps to reduce all forms of poverty, disaster, inequality, social exclusion, improve the quality food, disaster preparedness initiatives, healthcare availability and living standards of vulnerable groups of the society. CSR is about how financial institutes manage their business processes to produce an overall positive effect on society. CSR addresses various issues like human rights, education, health, disaster and safety. It also covers corporate governance, working conditions, environmental sustainability, and more.

CSR is now being considered as an acceptable tool all over the world to promote equitable and sustainable development, maintain consistent higher growth of the economy, decrease the inequality of a society and mitigate environmental degradation. Bangladesh Bank (BB), the Central Bank of Bangladesh, is mandated to ensure responsible behavior of social, environmental, governance and economic sectors in a structured manner. In these context Banks and Financial Institutions (FIs) being involved in CSR activities are also aligned in maximizing their values through better risk management and reputation. According to BB’s strategic planning there is a time bound action plan for the implementation of effective CSR Policy Guidelines of Banks and Financial Institutions. As such, BB sets areas or initiatives in CSR activities directly/indirectly linked to the development priorities in national and international plans adopted by the Government of Bangladesh; such as Perspective Plan of Bangladesh (2021-2041), Govt. 8th Five Year Plan, National Sustainable Development Strategy, National Social Security Strategy (NSSS) of Bangladesh, Climate Change Strategy and Action Plan, National Agricultural Policy, Intended Nationally Determined Contributions (INDC), National Disaster Management Policy 2015, National Financial Inclusion Strategy, UN declared Sustainable Development Goals (SDGs).

In 2008, Bangladesh Bank initiated the mainstreaming of CSR activities in the financial sector. These initiatives have inspired banks and financial institutions directly and indirectly to promote various activities, e.g. health, education, environmental decay-resistant ‘greening’ programs etc. Under these activities, BB and all commercial and financial institutions have been taken various projects under ‘Bangladesh Bank Disaster Management & CSR Fund’ through the assistance of so many CSOs (Local NGOs) like Children & Earth Welfare Society, Steps Toward Development, Dipto Foundation Shamata Nari Kalyan Shangstha (SNKS), Jamuna Shamaj Kalyan Shangstha (JSKS) etc. These initiatives have also inspired increasing the depth and diversity of CSR engagements of banks, CSOs and Financial Institutes (FI). On the other hand, these increasing levels of financial involvement in CSR actions are initiating a good move of CSR activities in Bangladesh.

Considering all these issues, indicative guidelines on CSR program of banks and FIs were issued by BB on 22 December, 2014. Under the fresh guideline, spending for environment and climate change migration and adaption sector has been enhanced to 20 per cent of banks total CSR funds, instead of the previous 10 per cent. The central bank also mentioned that Bangladesh is one of the most vulnerable countries in the world, which faces adverse impacts of global warming and climate change. Page 2 of 4

Health, energy, water supply, sanitation, industry (mining and construction), transport, trade, tourism, agriculture, forestry, fisheries, environmental protection and ecosystem, goods and services, and food security are the key development sectors of the country that are directly affected by climate change. So, it is high time to generalize, emphasize and organize CSR activities for the environmental, social, equitable and sustainable development of the country.

Regarding delineates CSR fund use, BB also instructed to the all-commercial banks to spend the fund to combat pandemics and epidemics like Covid-19, SARS, AIDS, dengue, malaria and other illnesses causing fatalities. (Ref: Bangladesh Bank CSR Report, 2022)

Regarding CSR alignment with SDGs and INDC (Intended National Determined Contributions), Bangladesh has already covered the way ahead of SDGs localization and implementation. The responsibilities of ministries and agencies against each goal and target of the 2030 agenda have been mapped out. Bangladesh is also one of the signatories of the Paris Agreement which outlined what post-202 climate actions they intended to take as part of INDCs. Accordingly, the sector of CSR expenditure and target beneficiaries under this policy have been aligned with relevant goals and targets of SDGs and INDC’s commitment of Bangladesh. Under SDG goals-6, 7, 9, 11, 13, 14 & 15 the CSR fund will be utilized for climate change mitigation and adaptation, disaster management and green State Revolving Fund (SRF) [Ref. Policy Guideline of BB, 2022].

In any social based activities, the effective participation of the stakeholders (including community) is very much essential for ensuring its long-term impact and sustainability. Demand for accountability and transparency from both public and private sectors has become increasing. In the olden days, management is seeking for survival and profits. Now a days, management concerns managing financial and non-financial results with awareness of risk and maintenance of transparency. As a result, corporate social performance (CSP) has possessed equal importance of corporate financial performance (CFP). So, under considering the CSP, banking sectors of Bangladesh can immediately contribute for the mitigation of climate changing concerns like recurrently increasing country wide warming, peals of thunder, cyclones, flooding, river erosion and sea-level rise under CSR through the Civil Society Organizations of Bangladesh.