INTRODUCTION

CSR AND ITS IMPORTANCE

Corporate Social resposibility or CSR represents the idea of an ethical
organization, that has social obligations and that can take responsibilities as the
individuals can do (Sanie,2015). The globalization that occurs demanded the business
to be creative and innovative in dealing with the competitive market. Because of this
reason CSR has become a critical factor for a company to build a successful business.
According to one study done by Dr. Sanie on the Importance of Corporate Social
Responsibility, the result shows CSR strategies can develop sustainable competitive
advantages, to enhance social and financial performance and therefore increase
organizational performance beyond numbers and bottom lines.
CSR is important to be implemented by businesses since it portrays the image
of the company itself. By contributing to the society, as a return, company will have a
good relationship with the community it serves. A company should not only providing
the service but also need to play its role in fulfilling its corporate duty by contributing
something to the community (Tilt, 1994). CSR also important for a company since it
become one of the platform for social contribution especially to the employees of the
company. The employees can use this opportunity to develop their humanity to help
other person and contribute more to the welfare and betterment of the world.
CSR has become a requirement to be disclosed in Malaysia for all Malaysian
public listed companies. The requirements took effect from 31 December 2007 which
enforced by the Listing Requirements of Bursa Malaysia (Appendix 9C, Part A,
paragraph 29) to disclose a description of the CSR activities or practices undertaken
by the listed companies. Apart from that, Bursa Malaysia had launched a new
Sustainability Framework, comprising amendments to the Listing Requirements and
the issuance of a Sustainable Reporting Guide and Toolkit with effective in October
2015. The sustainability reporting will act as the best strategy to find out where the
company stands compared to competitors, to measure the effectiveness of its
management and to understand the attitude of stakeholders towards it.

OBJECTIVES OF STUDY
The study of CSR activities in the conventional and Islamic bank will carry some
objectives. We will use HSBC Bank and Bank Islam as the example of conventional
and Islamic bank in this study. The objectives of this study are:
1) To identify the pattern and preferences of CSR practices by conventional bank
and Islamic bank.
2) To compare the CSR practices of both the kinds of the banks.
3) To study the uniqueness of the CSR activities practiced by the banks.

History of Bank Islam

Islamic banking business is defined as banking business whose aims and
operations do not involve any element which is contrary to the Religion of Islam.
Islamic banking system has been called for its establishment and only until 1975 the
first Islamic bank was established in Dubai. Extensive research and joint effort has
been done by professional Islamic economist, financiers and officer for 15 years from
various world Islamic organisations.
In 1983, Bank Islam has been formed by the inspiration of Bumiputera
Economic Congress in 1980 and followed by a seminar on the Concept of
Development in Islam in 1981. It is not to forget the effort by Tabung Haji and
PERKIM which committed to look after the welfare of Muslims in Malaysia and also
by the aid from National Steering Committee for Islamic Bank (National Steering
Committee) to establish Bank Islam for muslims in this country.
Today, Bank Islam offers a comprehensive range of Shariah compliant
banking and financial solutions with more than 70 Islamic banking products and
services to its more than five million customers. Bank Islam operates primarily as a
retail bank with consumer banking constituted of more than 70% of total financing.
Other products of Bank Islam comprises of the traditional financing, savings and
investment solutions exclusively for individual customers, to banking and financial
solutions designed to fulfil the fast-changing financial needs of customers from all
categories including those related to micro financing, wealth management, capital
market, treasury and structured products. Bank Islam has become the lead arranger for
the worlds first Sukuk issuance of RM125 million in 1990 by Shell MDS Sdn Bhd.

History of HSBC
HSBC is the short form from the name of Hongkong and Shanghai Banking
Corporation Limited. It has established its branch in Malaysia in 1884 in the Island of
Penangfor the purpose to issues currency notes. HSBC expanded its business in
Malaysia by acquiring the Mercantile Bank and started its operations in Malaysia in
1860.
HSBC was the first foreign bank by being awarded a licence to operate a
Takaful (Islamic insurance) business in Malaysia in 2006. The Islamic insurance
business has been named as HSBC Amanah Takaful (Malaysia) Sdn Bhd was a joint
venture between HSBC Insurance (Asia-Pacific) Holdings Limited (49 per cent
shareholding), Jerneh Asia Berhad (31 per cent shareholding) and Employees
Provident Fund Board of Malaysia (20 per cent shareholding) which has been
commenced its operations in August 2006.
HSBC Bank Malaysia has become the first locally incorporated foreign bank
to be awarded an Islamic banking subsidiary licence in Malaysia. The Islamic bank
which wholly owned by HSBC Bank Malaysia was named as HSBC Amanah
Malaysia Berhad and started its operations in August 2008. HSBC in Malaysia has a
network of more than 60 branches, of which a third are HSBC Amanah Malaysia
Berhad branches.

CSR ACTIVITIES OF HSBC

HSBC shows its commitments in Corporate Social Responsibility by

contributing to the economic and social development of the communities and
safeguarding the environment.
There are two components that become the centre of CSR activities of HSBC
which are Promoting Education and Environmental Sustainability. These two
elements are the focus of the Community Investments (CI) set aside by HSBC,
For each element, HSBC has its own criteria to be focused in contributing to
the society. For example, in promoting education, HSBC focused on disadvantaged
young people which particularly at primary and secondary education levels. They also
focus on activities that enhance the employment vocational skills and livelihoods.
Besides that, the program also focused

on empowering women, to enhancing

language and improving cultural understanding.

For second element which is the Environmental Sustainability, HSBC will be
giving more attention to activities that emphasized on freshwater sustainability, access
to safe water and water and sanitation. The environmental sustainability also covers
the issue of climate change and the conservation of terrestrial biodiversity and habitats
(e.g. forests) (ecological balance, protection of flora and fauna).
HSBC contributes to six charities in Malaysia
HSBC was celebrating its 150th anniversary and making available a global
fund of US$150m over three years (2015-2017). This fund will be contributed to the
local charities in countries where it operates in the worldwide. For Malaysia, HSBC
has selected six charities to deliver sustainable support to community and
environmental programmes.
The six charities were selected by the voting from its 50,000 employees
worldwide. There are a list of eight categories such as children and education,
supporting the elderly and disadvantaged communities, and the environment and
wildlife. After the voting done, HSBC will select the charities that will provide a
positive and sustainable change in their communities. US$150-million fund will be
contributed to the each charity that has been selected from the voting.

There are three categories that has been look up by HSBC in filtering the
selected charities

which are children and education, supporting the elderly and

disadvantaged communities; and the environment and wildlife. The six charities are
Rumah Kids, Yayasan Chow Kit and Orphan Care fall under the children and
education category, Yayasan Salam Malaysia and Rumah Amal Cheshire Selangor are
the charities for supporting the elderly and disadvantaged communities and the last
was Malaysia Nature's Society which falls under the environment and wildlife
category.
The selected charities have worked selflessly towards the betterment of the
community and environment and they have a proven track record of the efforts all this
while. For HSBC, they are not only contributing to the charities but also provide a
platform for HSBC employees to give back to the society and communities where
they live and operate in. HSBC would ensure that they support HSBC employees in
Malaysia with the opportunity to volunteer their time and share their skills to support
these charities. As a result, 303,922 hours have been spent by HSBC employees to
volunteer during working day.

HSBC Water Programme

HSBC had established Water Programme in the countries where they operate.
One of the Water Programme that been conducted by HSBC was the Sachetana
Drinking Water Project. This project was meant to help 1,000 families in southern
India by building rainwater tanks so the community need not have to drink from
polluted wells.
Before this, the villagers in southern India had no choice to rely on the
poisoned wells. Because of the HSBC Water Programme, the villagers have been
given access to clean water in conducting their daily activities. The poisoned wells
contained high levels of fluoride that can cause severe tooth decay, bone deformities
and debilitating joint problems. Villagers were aware of the problem, but had no
alternative water source.

In implementing the project, HSBC has partnered with the BAIF Institute for
Research & Development Karnataka, a local non-governmental organisation, to
help solve the problem and provide clean water to 1,000 households across nine
villages. A water tank was built to filter the rainwater and store it for later use.
By using 1,500 bricks and up to 12 bags of cement and sand, a water tank
was built in eight days. Four layers of sand, stone, pebbles and charcoal were used
to filter the water and the collected water can be drawn using a hand pump. About
90 farm ponds around Madhugiri has been built by HSBC in order to dilute the
fluoride content in the water.
This water programme has been named as Sachetana Drinking Water Project
which was nominated by local HSBC staff. To get this project successful, more than
800 HSBC employees from Bangalore have participated in improving the awareness
among communities about basic water health and hygiene and the risks associated
with drinking water with high levels of fluoride.

REFERENCES
1. Impact Of Bursa Malaysias Directive On Sustainability Reporting, (2016, June
22), Retrieved from : http://csr-asia.com/csr-asia-weekly-news-detail.php?id=12593
2. Digging Deep, (2016, October 31) Retrieved from : http://www.hsbc.com/ourapproach/sustainability/case-studies/digging-deep
3. Corporate Profile, (2016, October 31). Retrieved from:
http://www.bankislam.com.my/home/corporate-info/about-us/corporate-profile
4. HSBC in Malaysia, (2016, October 31), Retrieved from :
http://www.about.hsbc.com.my/hsbc-in-malaysia
5. Sanie (2015), The Importance of Corporate Social Responsibility, Journal of
Sociological Research, ISSN 1948-5468 , Vol. 6, No. 1
6. Bursa Malaysia , (2016, October 31) , Retrieved from:
http://www.bursamalaysia.com/market/