Journal of Economics and Environment Volume 1, Issue 1, 2020, Pages: 1-11

J. Econ. Environ.

Journal web link: http:// www.dormaj.org/index.php/JEE https://doi.org/10.47277/JEE/1(1)11

The Impact of Corporate Social Responsibility (CSR) on Bank Reputation and Financial Performance (Case study: Iranian banks)

Majid Lotfi Ghahroud1*, Seyedmehdi Hosseini2, Aghil Ariannejad3, Elmira Partovi4

1Business school of Hankuk University of foreign studies, Seoul, South Korea 2Cardiff business school, Cardiff University, Cardiff, England 3Department of Management, University of Tehran, 4Department of Business and Law, University of West of England, Bristol, England

Received: 09/02/2020 Accepted: 16/03/2020 Published: 18/03/2020

Abstract Banks and financial institutions play a significant role in the economy by facilitating the transfer of resources between lenders and borrowers. This article is an endeavor to map the corporate social responsibility (CSR) practices of major players in the Iranian banking sector and to find out the impact of such practices on their performance and image. This study examines the impact of CSR on bank reputation and financial performance. This research is based on a local sample of 24 private banks and financial institutions in Iran. We use a questionnaire for assessing reputation and for assessing performance we check bank income by their annual statements. The main hypotheses of research show the positive relationship between these indicators. The findings of the study suggest that banks in Iran have increased their CSR activities, which also have a positive impact on the performance of the business, apart from improving their reputation and goodwill.

Keywords: Corporate social responsibility, Bank reputation, Bank performance, Bank income, Banks in Iran

1 Introduction and literature review1 Some have empirically assessed the relationship between Banks and financial institutions play an important role in CSR and banks’ income, banks’ efficiency and so on. They economic development in society (Shen and Lee, 2006). The examine the impact of CSR on bank efficiency by using a impact of corporate social responsibility (CSR) on firm's DEA Dynamic Network Model and it reveals a positive financial indicators has been the subject of many academic impact of CSR on bank efficiency (Belsari et. al., 2020). Also researches. Although studies linking CSR to finance generally some want to show a positive link between CSR and some do not assess the banking sector (Finger et al., 2018), Some bank profitability indicators such as return on equity or return studies show that CSR impacts the financial performance of on assets or sometimes income (Nizam et al., 2019, Wu and businesses like banking sector (Lins et al., 2017), and their Shen, 2013, Shen et al., 2016, Wu et al., 2017). To address the market value (Ding et al., 2016), or market price (Ferrell et al., deficiencies and shortages of CER (Corporate environmental 2016), and their financial risk (Kim et al., 2014). In recent responsibility), some researchers study employs content financial crisis in 2008–2009, many researchers have analysis method to establish CER performance measurement attempted to study CSR and it`s results in the banking sector. indicators based on the CER framework and rules (Chen and Also, compared to other businesses and fields, banks and et al., 2018). In Islamic banks some scholars aim to financial institutions are subject to strict expectations in terms understand CSR under the Islamic banking paradigm. One of providing feedback to stakeholders such as governments, paper in this area aims to understand corporate social media, or communities (Wu and Shen, 2013). Because banks responsibility (CSR) narrative under the Islamic banking make money mainly from society (e.g., through government paradigm by three aspects, narrative review of the literature, (Iannotta et al., 2013)), public opinion and organizations often review of the definitions of CSR and review of factors and stresses the need for them to engage in CSR especially in elements that cause divergence and contrast from environmental issues (Shen et al., 2016). So, the impact of conventional percepts. They find that religion brings new CSR on banks’ profitability remains argumentative debate. dimensions of ethics and expands the scope of morality in Although banks may be reluctant to engage in CSR because of business (Zafar and et al., 2019). In another study, researchers the costs of CSR activities, CSR could also have a positive seek to investigate whether Taiwanese retail banking impact on financial performance through its positive impact customers and depositors prefer corporate social responsibility on reputation of their brand. (CSR) initiatives that favor themselves or other stakeholder groups (community, environment), and whether these initiatives impact customer and depositor attitude and 1 *Corresponding author: Business school of Hankuk University behavioral intentions and purposes (McDonald and et al., of foreign studies, Seoul, South Korea, E-mail: 2011). The aim of another study is to empirically test [email protected].

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relationships such as sustainable behavior, firm reputation, and researchers to amend and improve CSR discussions and and economic performance regarding the banking sector and practices in the country where CSR undergoes a less for the sub‐prime crisis period (2008–2012). The result show structured platform. Also, Salehi and et al., 2007 (there is an that bank reputation is positively related to accounting expectation gap between actual level of CSR and expected performance and is negatively related to leverage and level from the viewpoint of stakeholders), Ghaderi et al., 2019 riskiness profiles (Dell'Atti and et al., 2017). One article (The paper aims to investigate and illuminate critical aspects which is related to green marketing (marketing companies that of the relationship between corporate social responsibility care about environment) intends to highlight the importance (CSR) and hotel performance with particular reference to four of green marketing and Corporate Social Responsibility (CSR) and five star hotels in the Iranian capital of Tehran), Golipour focusing particularly on Romanian financial and banking and et al., 2009 (The paper aims to investigate and illuminate sector. The benefits of CSR have been also presented. critical aspects of the relationship between corporate social Analyzing the main interest areas for CSR in the Romanian responsibility (CSR) and hotel performance with particular banking sector, the researchers find that banks focuses on reference to four and five star hotels in the Iranian capital of culture, education, sports and humanitarian and environmental Tehran), Esmaeelinezhad and et al., 2015 (In empirical study protection. The results show that these activities offer a great of a sample of 220 employees from the second most popular opportunity to live up the corporate responsibility and automotive industry in Iran shows the positive affect of promote business activities at the same time (Marta, 2018). ethical and philanthropic responsibility on employee The next study has two main goals which are analyzes the engagement) have some related studies. extent to which banks report online their corporate social responsibility (CSR) practices; second, it determines the 2 World Business Council for Sustainable impact of size, ownership structure and framework, multiple Development and CSR exchange listing, and the internationalization of banks and There is an increasing awareness and knowledge about financial institutions on the level of their online CSR Corporate Social Responsibility (CSR), Sustainable reporting. The findings of the study demonstrate that the most Development (SD), and Non-Financial Reporting (NFR) disclosed dimension on the websites of the banks is products around the globe. Stand on the WBCSD2’s journey CSR and customers. Particularly, there is a shortage of disclosure (2002) the main aim was to explore what corporate social on parts of environment and energy. Further, the findings of responsibility (CSR) means for business in a world where the research show that size, ownership structure and ever greater demands are being placed and located on framework, and multiple exchange listing are significant in companies and firms by local governments, NGOs and the explaining online CSR disclosure area (Kilic, 2016). In an general public. In fact, corporate social responsibility (CSR) is interesting academic research and book, the chapter explores the commitment of business to share and contribute to how a financial institution and bank can effectively implement sustainable economic development, working with employees environmental CSR strategies that contribute to the wellbeing and staff, their families, the local community and society at and sustainable development of the global and universal large to improve their quality of life. community. In particular, the case of Piraeus Bank, a leading As global and universal business faces new and complex player of the banking sector in Greece, has been extensively challenges and opportunities, WBCSD science-based analyzed. The analysis demonstrates that by immediately and approach and targeted business solutions (keys) goal to scale effectively responding to environmental and other social up business impact and access. The WBCSD target the issues, Piraeus Bank is fully aware of the imperative need for realization of the Sustainable Development Goals (SDGs) an organization to integrate CSR notion in its strategy and through 6 work programs to achieve and obtain systems business activity (Riskos and et. al., 2019). There are many transformation and change. WBCSD is proud of convening papers which are related to CSR and especially environmental near 200 forward-thinking global and universal companies protection areas. However, since it has some cost for banks committed to advance the sustainability agenda. Sustainable and financial institutions, some of them disagree with this business lies at the heart of sustainable development and topic. environmental issue was part of their value chain. Also, Also, there are some internal studies about CSR and its demonstrating business progress in environmental and relationship with Iranian banks and other companies. For resource management and corporate social responsibility and instance, Saeedi and et al., 2017 examine the gap between the to share leading-edge practices among members is one of their customers’ corporate social responsibility (CSR) expectations goals. In 2010, the World Business Council for Sustainable and the actual CSR engagement within the non-branch Development (WBCSD) released Vision 2050, a landmark banking industry. Nejati and et al., 2012 aim to investigate piece of work that laid out a pathway to a world in which 9 corporate social responsibility (CSR) practices in Iran from billion people are able to live well and satisfied, within the the perspective of employees. The paper unveils information limits of the planet by mid-century. While many of the about the current status of CSR in Iran from the perspective of concepts at the core of Vision 2050 have stood the test of employees. It shows that on average Iranian employees time, inevitably, a number of concepts and topics have either perceive their organizations to be committed to CSR, although increased in importance or emerged as critical new areas and the mean CSR scores were relatively low in all dimensions. In fields within the sustainable development landscape and addition, this research shows that while the four‐factorial beyond. In figure 1 there are main approaches of WBCSD as structure of Truker's CSR scale was confirmed in the Iranian follow: context, some of the items had to be removed from the original scale when measuring CSR. The study by Chapardar and et al., investigated and conducted on 56 corporations from IMI100 (100 Iranian companies with highest annual sales, ranked by Industrial Management Institute or IMI), CSR themes in priority have been identified. The results and discussions are supposed to help business leaders, 2 international companies inside Iran, governmental authorities, - World Business Council for Sustainable Development

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2.3- New Energy Solutions To avoid the most devastating impacts of climate change, they must limit global warming to 1.5°C. They urgently need to reduce energy-related CO2 emissions in the short-term, which means businesses need to use the low-carbon energy sources available today - from the way they heat and light buildings, to the way they transport goods, people and services. With proven technologies and computers and low- carbon fuels, they can already make significant headway in decarbonizing (without GHG) the energy system.

2.4- REscale The speed at which the electricity sector can be decarbonized and grow to satisfy increasing demand will critically influence their ability to limit global warming to 1.5°C. Renewable energy is the main lever to decarbonize electricity consumption. Nowadays, renewables are reliable and cost-competitive correlated to conventional generation sources. REscale brings together leading companies and firms Figure 1: The main approaches of WBCSD representing the full renewable energy value chain to speed up deployment of renewables and the transition to a low-carbon Furthermore, the world in which business is operating (without GHG) electricity system. continues to adjustment: social tensions and environmental impacts are on the rise, fundamental and basic questions are 2.5- SBT4utilities being asked about the role obligation of business, and the 40% of global greenhouse gas emissions come from the economy as a whole and the COVID-19 pandemic has electricity sector. Leading energy companies are setting brought a level global and universal disruption and ambitious targets to reduce emissions in line with a 2°C or disconnection unprecedented (unique) in modern times 1.5°C scenario. Many of them are using the Science-Based (periods). At this critical juncture, WBCSD’s Vision 2050 Targets initiative (SBTi) to validate and announce their Refresh project is bringing their original and main vision up to commitments. They are developing a section guidance to date and restating the baseline for business action (practice) explain the benefits and challenges of science-based goals for and leadership for the decade to come. They are working to electric utilities to drive the uptake of medium- and long-term make the Sustainable Development Goals (SDG) more clearly decarburization aims. actionable for the private section, building an inspirational agenda for business and firm, and ensuring that 2.6- SOS 1.5 transformation in support of sustainability is at the core of Companies across the world are stepping-up their climate businesses’ response to the COVID-19 crisis and tension. In commitments: setting targets to reduce emissions and align their programs and projects the WBCSD has some plans like with the 1.5°C target for a climate-safe world. Setting this Climate Action and Policy, Natural Climate Solutions, New ambition is critical but it’s only step one. Businesses need to Energy Solutions, REscale, SBT4utilities, and SOS 1.5 and match their ambition with robust, actionable strategies to etc. accelerate the systems transformation WBCSD need. WBCSD’s new SOS 1.5 project aims to support companies 2.1- Climate Action and Policy from all sectors to stay within the 1.5°C safe operating space. Business is leading the transmission to a low-carbon SOS 1.5 is an action initiative of the WBCSDs Mean Business economy (Without GHG). WBCSD is harnessing the power coalition. of collaboration and cooperation to implement solutions at scale. Businesses and firms can go further and faster when 3 Banks and CSR in Iran they work together. A core and main component of their Discussion over corporate social responsibility (CSR) Climate Policy activities is to foster strong policy signals and concepts has entered into the public domain over the past economic incentives promoting a race-to-the-top where three decades, and almost all of Iranian banks and financial sustainable solutions and keys can accomplish. They actively institutions have some activities in this area. It has significant call for policies and obligations that are consistent with impact on their income as well. In this part, their activities in ambitious action on climate and enable business-led solutions this area have shown for each one. to scale and speed implementation and action of the Paris Financial institutions are well capable of extending efforts Agreement. for corporate social responsibility (CSR) and achieve

sustainability. Internal efforts to make day-to-day operations 2. 2 Natural Climate Solutions cleaner, more efficient, and supportive of social structures can “Natural Climate Solutions” (NCS) help nature do what be helpful in the long run. Sound financing of sustainable it’s been doing for millions of years: sequester and store economy can be efficiently promoted by the banks and carbon. New study shows that these solutions could deliver 37% financial institutions. Banks can also take initiatives for the of the emissions reductions needed to limit global warming betterment of the society. This would lead to general, social, around to 2°C. However, despite their massive potential, they and economic benefits that would accrue to society in a only make up 1% of the climate conversation. They are positive manner. Businesses and banks should hence look changing that by boosting awareness across the business beyond their purview of day-to-day activities and recognize community and helping the private sector invest in nature. broader social goals and include them in their plans (Bihari,

2011). In this section we bring some CSR activities of Iranian banks (There is a rule for name of banks in Iran and based on

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this rule some banks are like instead of • Establishing cultural relations with other countries Pasargad bank): • Joint publication of cultural magazines • Holding literature festivals 3.1 Mellat Bank • Holding volunteer work day This bank has a very serious policy in CSR area and there Also, this bank has a section in the website which is a section in the website of bank which is related to categorizes in 5 sections: education development, Health corporate social responsibility. development, Environmental protection, culture development Social performance: (a) cooperation in public services; (b) and Loan (Retail banking). Some of activities in in addition to purposeful economic activities, has environmental protection area: (a) environmental protection taken various; (c) measures to develop public services through education project for students in cooperation with Mellat gratuitous payments, such as the following: 1) paying money Bank and UNESCO; (b) appreciation of the rangers; and (c) for needy prisoners convicted to unintentional crimes in participate in the renovation of worn-out taxis to reduce air several phases; 2) cooperation in building and equipment of pollution. 63 schools, night art schools and exceptional schools; 3) education Health Environmental Loan culture cooperation of Mellat Bank in Cultural and Art Activities and development development protection development actions; 4) Mellat Foundation has carried out various Since Mellat bank has a clear strategy for Bank’s CSR, programs in line with performing its commitments concerning this bank publishes a comprehensive report for CSR activities social responsibilities (CSR) and public services: every year. • Recognizing professional qualifications (experts) in science, culture and arts

Table 1: Iranian banks and financial institutions income (Rial, 2009-2018) Name 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Mellat 32,138,202 41,513,948 54,569,515 66,747,756 70,542,368 69,747,619 72,302,124 104,516,356 289,741,993 291,551,590 Saderat 32,846,398 36,232,349 40,621,938 46,245,292 56,518,884 46,944,744 64,564,477 58,859,501 82,108,688 123,821,571 Tejarat 20,471,358 23,727,034 30,720,962 200,174 30,475,722 37,127,203 47,785,486 -121,583 72,438,229 86,760,740 Ayandeh 12,928,925 43,543,038 60,330,421 102,155,680 64,899,876 12,928,925 43,543,038 60,330,421 102,155,680 64,899,876 pasargad 9,288,148 13,292,617 19,560,967 22,378,952 21,910,236 27,353,750 20,274,754 35,078,019 59,332,459 64,498,307 Tourism bank 0 1,046,248 1,738,598 2,631,026 1,541,971 4,977,170 5,945,102 12,270,902 14,820,609 27,172,318 Ansar 3,072,996 4,905,775 5,563,382 7,162,382 9,366,658 11,096,128 13,696,676 15,424,282 23,795,588 0 Melalbank 0 0 1,659,319 2,053,535 3,240,788 3,734,518 3,067,815 6,851,112 15,436,430 20,017,679 Mehr 0 0 0 6,449,620 7,646,345 10,333,852 15,212,913 12,117,719 18,168,524 0 Saman 0 0 0 7,248,902 7,740,046 5,779,308 6,260,849 9,141,445 14,976,355 15,724,741 Eghtesad Novin 6,490,954 8,124,764 9,027,139 10,740,041 11,256,475 12,797,758 9,244,832 9,840,847 11,520,938 14,662,737 Middle East 0 0 0 1,261,388 1,519,186 2,408,397 4,417,091 5,555,974 10,161,937 13,694,520 Caspian 0 0 0 0 1 101,085 426,804 5,114,827 13,599,588 0 Sina 2,858,907 3,633,382 4,656,377 7,573,383 5,848,483 6,181,975 6,765,218 6,672,313 8,834,013 12,876,211 Post bank 1,640,497 2,119,889 2,135,557 2,612,306 2,523,101 4,267,033 4,736,662 5,573,614 5,582,286 11,974,623 Resalat 0 0 160,157 995,755 1,678,669 3,071,294 4,483,200 5,083,473 6,699,942 10,044,766 Karafarin 2,844,114 3,945,018 4,547,132 5,642,472 6,438,236 5,929,014 4,997,233 4,576,535 5,838,578 8,970,271 Parsian 9,806,868 13,419,381 14,384,895 16,623,557 9,578,685 12,244,923 10,736,551 13,282,584 16,468,032 6,657,478 Hekmat Iranian 176,432 356,168 941,051 1,105,496 1,259,374 1,670,496 2,430,542 1,905,154 3,373,042 0 Kosar 0 0 1,277,825 2,274,313 3,846,157 3,452,655 3,792,179 -891,896 0 0 Sarmayeh 2,688,410 2,849,291 5,679,919 9,578,781 6,413,432 3,854,829 -19,252,750 -22,707,601 -29,648,282 -23,207,498 Shahr 0 0 2,581,913 3,989,143 6,629,956 12,488,408 12,118,952 -22,838,284 -21,781,255 -26,260,943 Iran zamin 6,615 731,474 1,374,533 1,962,922 4,803,028 5,533,770 3,427,419 6,635,632 -2,771,206 -27,750,294 Day 389,449 1,181,045 2,324,888 2,876,640 6,296,756 6,509,991 -5,210,591 -22,787,471 -22,334,844 -31,115,340

3.2 Saderat bank 5. Saderat Bank, as the first Iranian bank according to ISO Based on a survey by a research company, this bank is one standard, has started the activity in the field of of the most active banks in CSR in Iran. This bank has establishing energy management system in the bank participated in many activities like: Saderat Bank has built 4 buildings. schools in less developed areas and provided them with the The last part of these bank CSR activities is related to educational system. In the last 4 years, it has been responsible environmental protection and energy consumption. for all financial and banking activities of the Tehran International Book Fair. This bank has been responsible for 3.3 spreading the culture of Qarz al-Hasna Last year, Mission and This bank has participated in some activities like: Social Responsibilities paid 4,07 billion Rials for Qarz al- ● Assistance to Imam Khomeini Relief Committee, Hasna facilities under the heading of marriage and preparing ● Assistance to Diyeh Headquarters for the release of dowry, for 1400 people, which will continue in the second involuntary crimes prisoners, year. This bank has paid more than 2 thousand and 3 billion ● Assistance to the Welfare Organization, Rials in topics such as: helping the helpers of Imam Khomeini ● Assistance to Kahrizak Charity, Relief Committee (RA), job creation, home jobs, etc. Also, in ● Assistance to the World Food Program, the website of this bank there is a section for CSR activities: ● Assistance to the Red Crescent Society of the Islamic 1. Transferring money to charity organizations by ATM Republic of Iran, 2. Online payment for Fetriah (In the end of Ramedan, ● Construction of schools and educational complexes in Muslims pay it to poor people) Sarpol-e-Zahab city, 3. Payment of Qarz al-Hasna loan to the people who have ● Construction of rural health house, lost their home because of the earthquake ● Support of scientific university events, 4. One-minute filming of each cultural event in Ramedan ● Granting facilities to small and medium businesses, and send via internal messengers

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● Promoting popular movements like without car Tuesday’s studied and compared by the bank in order to obtain a movement, comprehensive model for BPI’s initiatives in the area of social ● Improving the quality of electronic services, responsibility. Here below is a conceptual representation of ● Loan for replacing worn-out taxis, BPI’s Corporate Social Responsibility (CSR) model Base on ● Supporting the festival Green Film International, responsibilities (Figure 2). The final model is inspired from ● Cooperation with the Environmental Protection Carroll’s CSR pyramid by considering BPI’s particular Organization, activities and characteristics (Figure 3). ● Worn-out mortgage for Mehr housing There are some activities which are related to environmental protection like Cooperation with the Environmental Protection Organization and giving loan to taxi drivers to change their old cars.

3.4 Ayandeh bank Ayandeh Bank has chosen and implemented programs in the areas of: education of children and adolescents, personal and social health, cultural development, environmental protection, energy consumption management, as well as supporting energy consumption reduction projects as its organizational priority. Business leaders behave and act ethically in response to their stakeholders. They are sensitive towards social responsibilities (CSR) and environmental protection since it is one of the significant values. Thus, Ayandeh Bank has taken some actions in this regard, listed as bellow: ● Producing and broadcasting a video clip regarding Iranian cheetah to promote environmental protection ● Cooperating with some charities ● Approving establishment of two schools in Sistan Baluchistan and Southern-Khorasan provinces ● Supporting small and medium sized enterprises (SMEs) as Figure 2: BPI’s Conceptual Model for CSR well as venture capitals (VC) ● Participating in Honar charity fund There are some responsibilities in this figure such as ● Participating in startup companies and setting up venture human, etical, legal and economic responsibilities. Also, there companies in the field of Information and Communication are some sub-categories for each section and some Technology explanations. ● Cooperating with ‘Innovation &Prosperity Fund’ For example: ● Supporting professional conferences Human Responsibillties: ● Supporting Shiraz Industrial University Robocop team in Philanthropic activities as a responsible corporate citizen in 2015 China tournament order to alleviate social problems and to improve the quality ● Sponsoring Islamic Republic of Iran's Book of the Year of life for all people Sponsoring Book of the Year selection ceremony and the Spiritual and fnancial aid in the field of social services, nominated writers (sometimes in Book fair), authors and weifare and charity translators’ awards; with the participation of President Ethical Responsibilitles: Rouhani on 07/02/2016. Initiating ‘Sense of Life’ (Hess-e- Obligation to respect the values and culture of Pasargad Zendegi) scheme with the aim of supporting cancer patients Adherence to moral principles and standards in accordance and cancer research centers. Sponsoring pilgrims visiting with principles fair business Razavi Holy Shrine (Mashhad) in December 2015. Sending Authorization to engage in activities short messages and publicizing TV commercials on official Legal Responsibilities: national events and occasions Distributing books and Compliance with laws and regulations banking operations stationaries in deprived areas. As it would be clear this bank Avoidance of any social costs has participated in some activities for environmental Avoldance of transactions within the bank protection like Producing and broadcasting a video clip Avoiding all kinds of discrimination, health and safety regarding Iranian cheetah to promote environmental hazards, no environmal pollution protection. Economic Responsibilities: Fulifiling our clients's needs and creating a fair economic 3.5 Pasargad bank environment of mutual interests Like many other committed and responsible corporations Accountability for the consequences and complications of and businesses, Pasargad Bank, which takes pride in being an economic activities and possible consequences of social honorable and capable bank, has set up a number of activities mechanisms to preserve its legitimacy and elevate its competence. This bank publishes CSR report every year for public. In this report this bank uses a famous model: due to the high importance conferred to social responsibility by BPI (Pasargad Bank of Iran) and the wide extent of different dimensions associated with this issue, various theories and methods proposed by reputable international scholars were

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J. Harmonizing the CSR programs of all Bank Pasargad Financial Group companies In summary BPI is committed to improving the economic, social and cultural life of the communities in which the bank and other related companies are present. This bank and other companies that related to this bank have initiated and implemented extensive programs for promotion of Arts, sponsorship of sports and endorsement of charity events in order to elevate and prosper communities. These engagements have included patronage of art exhibitions, social events and theatrical performances that have required private funding. At BPI, this bank strives to assure better futures for all communities by addressing fundamental issues such as Job creation, housing and basic human services. These focus areas allow us to take a comprehensive approach to a wide range of social needs linked to strengthening professional skills of the unemployed, community development, and other basic human services. BPI and environmental protection: BPI looks upon the environment from 3 perspectives: 1- Introduction of operational procedures in accordance with Figure 3: Carroll’s CSR pyramid environmental protection through educational campaigns for employees The Areas and Topics of Responsibilities in Pasargad bank: 2- Advocating responsible use of water, energy and fuel by (a) customer: Interest and consideration for customer Iranian citizens as well as rational management of communication is important for the long-term success of any materials business; (b) stakeholder: Given the status of the beneficiaries 3- Refusal to lend polluting industries & activities harmful in the bank, it is important to emphasize on one phrase out of for nature and natural resources BPI’s mission statement: “Inspiring stakeholders’ needs, During the period of March 21, 2015 till March 19, 2016 green banking and social responsibility”; (c) environment: Bank Pasargad refused to lend polluting industries & activities BPI has always tried to manage its activities in order to harmful for nature and natural resources. And also, this bank improve, develop and enhance the environment; (d) by reducing bureaucracy, eco-friendly Solutions (Expanding transparency and Security: The nature of banking activities online banking, encouraging customers to use electronic requires for both transparency and security of information; (e) banking services). In addition, generally, banks have a employee: BPI’s principal competition advantage over rival relatively minor impact on the environment. Nevertheless, Iranian banks is resumed in the quality of its personnel. The BPI has always tried to manage its activities in order to bank and other related companies continuously strengthen improve, develop and enhance the environment and global their knowledge, skills and management dexterity through ecosystem. organizing specialized courses and training programs; (f) anti- Positive environmental impact of BPI activities: (a) discrimination Policies and Practices: Discrimination on any improving the quality of life of citizens; (b) reducing social matter, including gender, age, ethnicity, religion and damage (theft) reducing environmental pollution; (c) reducing disability, are not tolerated at BPI. Promotion is solely based the cost of government investigation in pursuing crimes; (d) on merit within the bank. This bank has a Value Creation for reducing consumption of non-renewable resources such as all stakeholders and sustainable growth plan and a future plan fuel; (e) developing of electronic currency in replacement of of bank paper currency; and (f) providing banking services 24 Future Plans of bank Pasargad: /7Reducing the traffic related to banking activities. A. Organizing a committee composed of the bank’s Reduce Paper Consumption: One of the most important managers for a supervising all activities related to its solutions of BPI in support and friendship of the environment corporate social responsibility program\ has been implemented by the settlement of modern B. Participating in projects related to social and economic managerial system to reduce the consumption of paper of its development of Iranian society minimum, in the process of administration and banking C. Membership in national and international institutions affairs, by the systems of ERP, BI and automation. Raw D. Collaborating with external organizations for promising material of paper production systems is sourced out of the the bank’s CSR program among stakeholders limited existing jungles. Two tons of wood will be used for E. Preparing for external assessments on the BPI’s CSR the production of one ton of paper and 6 m3 (cubic meter) of program jungle wood is needed for making each ton of white paper F. Formulating, adopting and implementing environmental pulp. Considering world average ratios, 2 tons of wood are policies accompanied by clear, measurable and verifiable needed of production of each ton of paper; which means goals cutting of 17 tick trees, moreover, 4,000 kw electricity and G. Creating valuation and measurement tools on projects 400,000 liters of water would be consumed for the production regarding the material and spiritual return to the bank’s of this 1 ton of paper, too. Further to the above, each tree stakeholders plays a key role in reduction of air pollution by altering6 kg of H. Increasing the quantity and quality of interactions with CO2 to O2 annually. BPI has tried to act positively as a stakeholders by disseminating the bank’s CSR policies responsible, caring entity for minimizing paper consumption I. Informing the employees and the community of the bank’s in the administrative and banking works and operations with policies and procedures regarding Corporate Social resorting to environment-friendly techniques and applications. Responsibility program

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Outcomes of activities for lowering of the consumption of Sport: paper during the period of 21 March 2015 till 19 March 2016: ● Opening and operation of multi-purpose sports hall in the Avoiding cutting 14,485 trees Chale Moort area in Hormozgan province, 2015 Avoiding using of 341 million liters of water ● Supporting the Carting racing of national championship Avoiding using of 3,400,000 kw electricity on 18th Sep., 2015 Management of Physical Resources ● Supporting Para – Olympic champion BPI’s policy in this area is the efficient use and rational ● Supporting the Persepolis football team management of resources. In addition to optimizing the Cultural and artistic: purchase of materials and equipment, the bank and other ● Making the artwork of Khorramshahr Symphony poem related companies intend to improve the efficiency of work at Supporting the production of a movie called “City of rats”, our bank. For example, this bank recently implemented the ● 2013 advanced Enterprise Resource Planning System (ERP). ERP Enterprise Resource Planning (ERP) is business process ● Supporting the production of Imam Khomeini Symphony management software that al-lows an organization to use a ● Supporting the cultural and artistic festival in Kerman system of integrated applications to manage the business and Province automate many back-office functions related to technology, ● Supporting the exhibition of “ In search of Lost, services and human re-sources. Paper Reducing the quantity composed by Farideh Lashaie” in Tehran museum of of paper used at head office and in branches nationwide is a contemporary Art clear indication of commitment to environment protection. In ● Celebration of Scientific and Cultural fames of Iran 2016 the bank and other related companies continued to focus Scientific area: on transitioning customers to online banking, reducing ● Supporting the dispatch of elites to science international employee prints and increasing the digital delivery of key conference hosted by Italy documents. Since 2011, they have reduced paper usage by ● Supporting the banking and economic books 16.8 percent. As you can see this bank have a comprehensive ● Supporting the graduation ceremony of Beheshti plan for CSR and in the 2018 and 2019 annual report, this University students bank released some other policies in this area: Tourism area: For protecting the environment, the bank remains committed ● Tourism Bank officially joined the World Tourism to fulfilling social responsibilities and confront social Organization (UNWTO). The operation of the complex of concerns by trusting rich corporate culture, fundamental Airport international Hotels of Imam Khomeini Airport values and beliefs. Also, Resource Management for Energy ● Supporting the construction of International Airport hotels and the Environment is one of their goal. of Imam Khomeini Airport, that has been designed and constructed according to Axis prime and Axis French 3.6 Tourism bank international hotels standards Bank activities in the field of Corporate Social ● Supporting of the World Tourism Day Responsibility (CSR): ● Special support of the Culture festival of Iranian Tribes The bank mentioned in the website that we cannot live only for ourselves; there are thousands of strings that connect us ● Support and presence in Tourism international exhibition with other human beings. ● Support the first Tourism start up weekend Social responsibility nowadays is an important factor in ● Signing agreement with Cultural Heritage Organization determining the completion of activities of economic entities, ● Supporting the festival of Tourism Guides Day especially the Banks. Therefore, to practice of social ● Supporting the book of Brand making guide for Tourism responsibility in the range of the interests of shareholders and destinations employees as well as society and people interests also ● Supporting of building the on road integrated utilities environmental remarks cause that the bank highlights the role ● Supporting the Eco-Tourism of Bandar Abbas in the society. ● Supporting the book of Nature Trails in Iran In order to fulfill the social responsibility and human tasks for shareholders, colleagues, society and nature, first the creation of annual program in this area was performed under the 3.7 Ansar bank supervision of the Honorable CEO and then following major In 2018, the National Award for Social Responsibility went to activities were carried out Ansar Bank. This bank has been merged with another bank Environmental: and there is no new information in the field of social ● Replacement of paper-based forms with dynamic forms responsibility. ● Production of gift cards with potential to be collected with collectors 3.8 Melalbank ● Use of stone paper to preserve green space and reduce the There is little information about this financial institution. Only cutting of trees one of the news items mentioned this issue: ● Production and distribution of recyclable cups Social responsibility is one of the priorities of this credit Charity: institution and the bank's activities in this field include: ● Supporting the Yas e- Fatemeh Alnaby charitable Expanding the spirit of cooperation and collaboration, institution strengthening the employment of young people and their ● Supporting the construction and operation of Kimya livelihood problems, financing the production sector of the Danish Schools in deprived areas economy in order to help economic prosperity and help ● Supporting the Ra’ad Rehabilitation Goodwill Complex maintain economic stability is on its agenda.

● Supporting the Mahak Charity institution 3.9 Mehr Bank Allocation of Bank charity investment fund to welfare ● This bank has been merged with another bank and there is no organizations new information in the field of social responsibility.

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However, there are some information for 2 years ago as has helped Child Foundation with their activities follow: aimed at annihilation of the factors that cause a child to drop With the vision of "striving to develop social welfare and out of school. Saman donated 49M rials in 2013 to the achieving a developed society", Qarz al-Hasna Bank of Iran education of 86 deprived children. Saman was there with launches its social responsibility programs in the seven axes deprived children from 2010 to 2012 and helped them of work to increase livelihood and improve social welfare, complete high school under the supervision of Child employment, entrepreneurship and the realization of a Foundation to enter university and job market. Saman donated resistance economy, youth marriage and implementation the amount of 700M rials to Child Foundation in 2012. Formulates and implements the general policies of population, Each Year One More School environment and the priorities communicated by the President Since 2010 Saman bank has been obliged by our commitment to the Minister of Economy, educational empowerment and to social responsibility to build a school every year in a expansion of educational justice with priority given to deprived area of the country. deprived areas and health, promotion of safety and reduction + Three Schools in Three Areas Saman bank has constructed of social harms. schools in Kidouz, Parand and Bojnourd. Among the measures taken in the realization of these seven + Varzaqan School axes are the construction of a school and a rural health house To celebrate Nowrouz with the earthquake-stricken children for the victims of the Kermanshah earthquake, participation in of Varzaqan, Saman started constructing a 9-class school in the construction of a 300-bed hospital for the mentally ill, and 2012 which upon completion had costed Saman 9B rials in the granting of green loans to protect the environment. Life, total. creating a charity club, with the aim of directing donors' C) Art and culture liquidity to meet the needs of society, implementing the Persian Gulf Symphony: Health Ambassadors project to cover part of the costs of The Saman sponsored the concert of the Persian Gulf treating patients in need through cheap facilities, participating Symphony also known as Sinus Persicus Suite by Maestro in the release of involuntary crime prisoners and supporting Shardad Rohani at Milad Tower in 2013. Also, we contributed their employment by paying Garz al-Hasna loan and the to the composition and the publication of the Persian Gulf distribution of educational and health items and equipment in book and its audio release. deprived areas of the country. Saffron Gift: Saman bank has given our saffron gifts composed of a book 3.10 Saman bank and a bundle of high-quality Persian saffron packed During recent years, Saman bank has sponsored various luxuriously to our special customers as an emblem of our cultural, artistic, sports and social events and has supported respect to the Persian civilization as part of our identity. The health and educational charities. A list of some of these total cost of this project amounted to 3000M rials in 2013. activities (in 6 section: Health, Education, Arts and culture, Saman Fund Gallery: Sports, Environment, Society) is provided hereafter. Saman bank hosted the exhibition of more than 40 A) Health masterpieces created by Iranian artists over the last four Chain of Hope decades at Shirin Gallery on December 26, 2013. In 2013, Saman Bank sponsored Chain of Hope, affiliated Fehrest Short Story Festival Saman bank attempted to make with La Chaine de l’Espoir headquartered in France and the connection between authors and publications easier by donated 700M rials for the purchase of treatment appliances hosting a short story festival with the help of Nik Haami required to treat spinal deformity in children suffering from Charity Corporation which has been determined to dissipate scoliosis. Also, in 2012 and in 2010, Saman donated 500M book-reading habit among the Iranians. rials and 400M rials respectively to the institute to take Biannual Damonfar Art Exhibition: necessary action for the treatment of a certain number of Saman bank sponsored the 4th biannual Damonfar Art deprived children and helped the institute enhance the medical exhibition at Mellat Pardis Gallery in September 2012. The equipment at Children’s Rehabilitation Clinic. main goal of the exhibition has been to support young talented Behnam Daneshpour Charity painters. Behnam Daneshpour Charity helps cancerous patients This Bank sponsored the performance art work named this” nationwide and worldwide without defining its priorities on which Mohammad Parvizi directed at Shirin Gallery for 25 basis of age, sex, nationality, religion, type or level of illness. consecutive nights. Saman donated 350M and 300M rials in 2013 and 2012 to Loris Tjeknavorian: support their activities. In 2011, Saman bank collected and published the artwork - Varaqan Earthquake which spanned 50 years- of the well-known composer and The earthquake in Varzan in August 2012 damaged orchestra maestro, Loris Tjeknavorian. houses and buildings and took a great death toll. The bank’s D) Sports supporters were there with Varzaqan; bank’s supporters built Volleyball: a clinic and an apartment to lodge the local physician. Saman Bank sponsored the national men’s volleyball team, Wounded in Action the national boys’ volleyball team and Omid at a cost of 30B In 2012, Saman spent 1B rials on the overseas treatment of a rials in 2013. Saman bank lays claim to the triumph of our WIA of Iran-Iraq War in Germany. national volleyball team and its promotion to Group A at B) Education FIBV Volleyball World League of 2013 and earned victory at R&D 2014 Asian Games. Saman bank has sponsored accredited students’ dissertations, Show Jumping Saman Cup: and have provided databases of the articles and dissertations Saman bank sponsored the 3rd show jumping Saman cup in completed at Saman Bank and of macroeconomic indices for 2011 in collaboration with Tehran Province Equestrian the researches that collaborate with Saman. Association. The top ten contestants were prized in cash. Child Foundation Basketball: Saman bank sponsored Iran Basketball Super League in 2010.

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Futsal: 3.13 Caspian financial institution In 2009, Saman bank sponsored the exhibition games of our In the website of this financial institution, there is a goal national futsal team. and mission page, and in this page, there is a goal that related E) Environment to CSR: There is still water and Saman bank has but a very little water Fulfilling social responsibility in order to increase the welfare Improper water consumption due to the lack of an effective of society and strengthen production and create stability in the water management system exacerbated the already shortage of economic development of the country as an active and leading water in Iran that is a country located in a dry land. All in all, member. has necessitated serious action to be taken if Saman bank wants to prevent a disaster from coming. 3.14 Saman Bank has rendered a save water campaign to spread In order to fulfill its social responsibilities, Sina Bank has the necessary knowledge and behaviors in this regard. Saman made the support of deprived and less developed areas a bank has started our campaign in 2014 and demonstrated that priority in order to develop these areas like Job creation plans. “there is still water and Saman bank has but a very little water”. Saman bank’s commitment to save water means more 3.15 Post bank than a social responsibility to us as Saman bank is fully aware This small bank just has paid some loan to encourage that it is a matter of life and death to our world as well as to people for launching new companies and job creation plans. our nation. F) Society 3.16 Resalat bank Mehr Afarin Charity Institue: Resalat Bank defines social responsibilities for itself in Saman Insurance has sponsored 30 children supported by this bank and pursues the payment of Qarz al-Hasna loans Mehr Afarin Charity Institue (Low-interest loan). Sepehr Charity Foundation: Sepehr Charity Foundation is a non-government, non-political 3.17 and non-commercial foundation licensed by State Welfare In order to fulfill its social responsibilities, Karafarin Organization of Iran and established since the disastrous Bam Bank has put various activities at the top of its agenda, which earthquake of 2003. Saman donated 200M rials in 2013 to are mentioned below: help Sepehr Charity provide health care for deprived children, ● Humanitarian and benevolent activities elderly, patients with spinal damage, and mothers as single ● Support for students in disadvantaged areas parents and train unskilled workers for specific jobs. Saman ● Supporting the victims of the Kermanshah earthquake in also granted the organization with 150M rials in 2012. 2017 ● Supporting Sepehr Charity 3.11 Eghtesad Novin bank ● Support for the Institute for the Support of Children with A) Sponsorships Cancer (Benchmark) Investing in the people of Iran ● Support the Child Foundation At EN Bank, we aspire to forge strong links between the ● Support for the earthquake victims in Azerbaijan financial sector and Iranian society. That's why the bank is ● Support the publication of books committed to supporting the communities in which we ● Support Art activities operate. ● Support sport activities Bank’s activities to date have included building new schools, ● Support Voluntary work day like attending Daheshpour sponsoring art exhibitions, co-producing independent movies, Charity and publishing books and manuscripts by contemporary Iranian writers and ancient Persian scholars. 3.18 A-1) Contemporary Art Parsian bank not only notice to financial activities, but Giving Iranian art pride of place always has a CSR policy for society and people like marriage EN Bank is a proud patron of Iranian arts and artists. While loan, Cooperation with charitable organizations such as the sponsoring major art events in grand venues and smaller Welfare Organization, Imam Khomeini Relief Committee, exhibitions at private galleries, we also support known and Kidney and MS Association of Iran, support for cancer new Iranian artists by purchasing artworks. You can now view patients, payment of self-employment facilities and our carefully selected and invaluable art collection at our development of business and entrepreneurship. online gallery. A-2) Novin Art Collection 3.19 Hekmat Iranian bank A showcase for creativity The Novin Art Collection This bank has been merged with another bank and there is comprises an invaluable selection of contemporary Iranian no new information in the field of social responsibility. artworks by famous artists and promising new talents. Over Hekmat Iranian Bank, in continuation of its movement in the the years, we have carefully handpicked pieces for the field of social responsibilities, 2 years ago by equipping two collection from art fairs and exhibitions, many of which EN schools in Khorramshahr, gave them a desirable and quality Bank has proudly sponsored. You can view the Novin Art atmosphere for students to study in deprived areas. Collection at the EN Bank online art gallery. 3.20 Kosar financial institution 3.12 This financial institution has been merged with another This bank focuses on environmental protection areas and bank and there is no new information in the field of social there are many cases in the website of bank like saving our responsibility. Kosar Charity has set up and managed 19 word, air pollution and solution, recycling and etc. The bank quasi-family centers, four medical centers, two care centers, also has instructions on how to prevent Covid-19 on its vocational training and rehabilitation for the disabled and a website. non-profit educational complex, in the field of providing services to compatriots and especially the deprived while

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trying to play a role Effective in the field of social link between the corporate social performance and financial responsibility, take an effective step in the direction of dealing performance ((bank income) and bank reputation. Hence, it with social problems and improving the health of the country, can be concluded that the higher the level of CSR, the better and has a coherent strategy and program to expand its the bank reputation, income and profitability. In fact, when a activities in the future. bank considers more CSR activities, it has positive impact on the brand of bank and finally positive impact on financial 3.21 performance like income. So, banks and financial institutions This small bank has published a visual report on its should put CSR in their policy and it would help them to website. Social mission of Bank is Participate in the growth make more money. and development of youth culture and health.

3.22 Shahr bank References Shahr bank, as a citizen bank, in addition to banking Belasri, S., Gomes, M., & Pijourlet, G. (2020). Corporate social activities, has the strengthening of financial strength in responsibility and bank efficiency. Journal of Multinational Financial Management, 54, 100612.‏ various areas of social banking on the agenda. Bihari, S. C., & Pradhan, S. (2011). CSR and Performance: The story of banks in India. Journal of Transnational Management, 16(1), 3.23 Iran Zamin 20-35.‏ This bank notice to some CSR activities like reducing air Chapardar, H., & Khanlari, R. (2011). Iranian corporations and pollution, fuel consumption and reducing paper consumption. corporate social responsibility: An overview to adoption of CSR themes. Sage Open, 1(3), 2158244011430988.‏ 3.24 Day bank Chen, C. S., Yu, C. C., & Hu, J. S. (2018). Constructing performance In the fourth period of the Social Responsibility Award, measurement indicators to suggested corporate environmental responsibility framework. Technological Forecasting and Social which was organized by the Iranian Management Association Change, 135, 33-43.‏ in cooperation with Khatam University, Day Bank was Dell'Atti, S., Trotta, A., Iannuzzi, A. P., & Demaria, F. (2017). honored for its continuous efforts in the field of social Corporate social responsibility engagement as a determinant of responsibility. bank reputation: An empirical analysis. Corporate Social Responsibility and Environmental Management, 24(6), 589-605. 4 Questionnaire analyses Esmaeelinezhad, O., Boerhannoeddin, A. B., & Singaravelloo, K. (2015). The effects of corporate social responsibility dimensions In this part we analyze the questionnaire and some on employee engagement in Iran. International Journal of questions that customers answered: Academic Research in Business and Social Sciences, 5(3), 261.‏ We use google docs for this survey and we ask some Forgione, A. F., Laguir, I., & Staglianò, R. (2020). Effect of corporate questions about banks and their CSR activities. Also, they social responsibility scores on bank efficiency: The moderating answer some questions about CSR activities and bank income. role of institutional context. Corporate Social Responsibility and Environmental Management.‏ Table 2: Questionnaire results Ghaderi, Z., Mirzapour, M., Henderson, J. C., & Richardson, S. (2019). Corporate social responsibility and hotel performance: A Title Number CSR CSR activities view from Tehran, Iran. Tourism Management Perspectives, 29, of people activities are lead to better 41-47.‏ increased performance Gholipour, T. H., Nayeri, M. D., & Mehdi, S. M. M. (2009). Men 155 126 (Yes) 150 (Yes) Investigation of attitudes about corporate social responsibility: Women 101 99 (Yes) 101 (Yes) Business students in Iran. African Journal of Business Management, 6(14), 5105-5113.‏ Kiliç, M. (2016). Online corporate social responsibility (CSR) 5 Conclusions disclosure in the banking industry. International Journal of Bank Marketing.‏ Corporate social responsibility (CSR) stands for business Laguir, I., Marais, M., El Baz, J., & Stekelorum, R. (2018). Reversing contribution to sustainable development activities and covers the business rationale for environmental commitment in banking. Management Decision.‏ active participation in different fields like human resources, Kahreh, M. S., Mirmehdi, S. M., & Eram, A. (2013). Investigating the relations with customers and clients, suppliers, and other critical success factors of corporate social responsibility stakeholders, corporate governance, environment, and implementation: evidence from the Iranian banking sector. contribution to community and society. The social responsible Corporate Governance: The international journal of business in attitude is integral part of the identity of financial institutions society.‏ like banks, and it is one of their distinctive and excellent McDonald, L. M., & Lai, C. H. (2011). Impact of corporate social features. The has asked the banks to pay responsibility initiatives on Taiwanese banking customers. special attention toward integration of social and International Journal of Bank Marketing.‏ Marta, K. (2018). Green Marketing and Corporate Social environmental concerns in their business operations. Many of Responsibility in the Romanian Banking Sector. Ovidius the newly formed private and governmental banks are aware University Annals, Economic Sciences Series, 18(2), 461-465.‏ of the importance of such a step and therefore maintain an Riskos, K., Dekoulou, P., & Tsourvakas, G. (2019). Contemporary active CSR department in their banks. Compared to other Environmental CSR Strategies in the Banking Sector: The Case firms, banks play a key role in institutionalizing social of Piraeus Bank. In Cases on Corporate Social Responsibility and responsibility in communities. Contemporary Issues in Organizations (pp. 90-109). IGI Global.‏ Saeidi, I. P., Othman, M. S. H., Streimikiene, D., Saaeidi, S. A., Saeidi, P., & Mardani, A. (2017). Identifying the gap and This study examines the relationship between CSR differences between customers’ expectations for banks’ corporate performance and bank performance and reputation. The social responsibility and the actual scenario. Transform. Bus. findings of this study indicate that there is a significant Econ, 16, 106-123.‏ positive relationship between CSR disclosure and the two Salehi, M., & Azary, Z. (2009). Stakeholders’ perceptions of indicators. These results verify the hypotheses and are also in corporate social responsibility: Empirical evidences from Iran. line with the theoretical framework that predicts a positive International Business Research, 2(1), 63-72.‏

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World Business Council for Sustainable Development (WBCSD), 2002, World Summit on Sustainable Development. www.cbi.com, Central bank of Iran www.mbri.ac.ir, Monetary and Banking Research Institute of Central bank of Iran Zafar, M. B., & Sulaiman, A. A. (2019). CSR narrative under Islamic banking paradigm. Social Responsibility Journal.‏

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