Corporate social responsibility ("CSR") in the South African banking sector .

Abstract

Sustainability has become ubiquitous in our daily lives especially in the consumer space. Producers of goods and services use their sustainability credentials to demonstrate to target markets, public and regulators that their products and services are produced using the highest sustainability standards. Whilst many studies have been undertaken to establish the reasons behind, and the effects of sustainability in the western economies, there seems to be little published research on sustainability in the context of South African banking sector. This paper is written in pursuit of an understanding of why banks in the South African undertake sustainability initiatives whilst carrying out business. There is a growing emphasis of sustainability and the need to carry out business in a sustainable manner. The study shows that there are three broad drivers of sustainability in business in general and in banking in particular. These three drivers are Strategic, Altruistic and Greenwashing sustainability. The paper also seeks to establish how sustainability initiatives in the banking sector in South Africa affect financial performance. The research has been carried out through interviews with senior managers of the major banks in South Africa that account for 90.8% of the banking sector assets as September 30th 2015. The interviews were then transcribed and the responses and explanations collated for the qualitative analysis to establish the need for sustainability initiatives in the South African banking sector and its effect on the financial performance of the respective banks. The research findings show that banks in South Africa undertake sustainability initiatives for strategic reasons and that whilst a direct causal link to financial performance is difficult, sustainability impacts financial performance favorably.