Proceedings of International Social Sciences and Business Research Conference
4 - 5 December 2014, Hotel Himalaya, Kathmandu, Nepal, ISBN: 978-1-922069-65-8
Current Status and Factors Affecting Implementation of CSR:
Evidence from Nepalese Banking Sector
Gopi Bidari1
Demands for higher levels of CSR disclosure made by business organizations have been increasing
significantly in recent decades. In practice, some of the developed countries have already enforced
mandatory or effective voluntary CSR disclosures whilst most of the developing countries are still
struggling to understand the basics of CSR concept. Research in CSR has also been growing in
different forms namely sustainability reporting, social audit, triple bottom line accounting and many
more. However, the existing studies have been mainly western centric and focused on manufacturing,
energy and mining industries, with little attention given to developing economies and the service
sectors.
Nepal, a landlocked mountainous country, is located between two emerging economies - China and
India - where CSR is in an infant stage of development. After the political stabilization in Nepal in 2006,
many new banks came in operation by providing various services at different parts of the nation and
covering every sector of the economy. Banking has accordingly become one of the most important
sectors for Nepal in terms of tax, capital investment and employment. Thus, banking sector being a
back bone of Nepalese economy, so far, no significant research has been done with regard to CSR
disclosure.
This study addressed the gap by examining the current status and practice of CSR disclosure in
Nepalese banking sector by analyzing the annual reports and WebPages of 58 sample banks for the
financial year 2012/2013; and factors affecting implementation of CSR disclosure by a semi-structured
survey questionnaire to the manager and person who deals with CSR related issues of the sample
bank by using the Triple Bottom Line (TBL) approach. The findings shows the significant development
in voluntary disclosures where majority of the sample banks have disclosed CSR in qualitative form
and primarily focused in philanthropic areas such as scholarships, health camps, donations and
charities. In contrast, none of the sample banks used any framework to prepare CSR from Equator
Principle, GRI-FSS or UN Global Compact. None of the sample banks mentioned anything on
employee benefits, training and development although 23 banks out of 58 of the sample banks
mentioned few lines in qualitative form on environmental disclosures in their WebPages.
There are some limitations of the study namely, sample banks are consist of only commercial banks
and development banks may not be generalize to other financial institutions, the study is based on
Nepalese banks and may not generalize to other developing nations and the study is not longitudinal,
hence the updated information on webpage may not give the accurate information after the study time.
This study will help to understand the future researcher to understand the status of CSR and the
central banks to formulate the policy that can address the CSR issues. Further research can be done
in the role of government for effective CSR disclosures in different sector of the Nepalese economy.
JEL Codes: M14, M38, M40
Key words: Corporate Social Responsibility, Banking, Disclosures
1
Gopi Bidari Masters by Research student, Faculty of Business and Law, Edith Cowan University Australia E-mail:
g.bidari@ecu.edu.au