What Are The Specific Issues CSR Relates To The Domain Of Finance?

How Far CSR Are Being Endorsed By Mainstream Financial Institutions?

What Is The Association Between Ethical Investment And Islamic Principles?

There are several issues that are raised in the present research paper. The first problem is the heavy unfairness in the use of debt based instruments such as murabaha that relates directly to profit and loss sharing modes of investment (Ho et al. 2014). The second issue highlighted in the paper is the strategic vision that is adopted by the Islamic banking as it got inspired by the debt-oriented conventional banking culture. The third issue highlighted in the selection of financial instruments that render higher weight to the efficiency criteria that neglects the equity criteria (Von Wallis and Klein 2015).

Islamic Finance is rooted on the philosophy of equality, fairness as well as principles that directly lead to societal welfare (Revelli and Viviani 2015). Hence, it can be said that Islamic banking and Finance can be socially responsible and ethical investing. It majorly seeks social justice as well as monetary affluence of the humanity that hearten sustainable financial movement. However, Islamic Finance comes from basic requirements that are already set by the Islamic law. Same is mentioned in the Socially Responsible Investing that refers as sustainable, socially conscious as well as mission and ethical investing. Therefore, socially responsible investors are guided mainly by an ethical or moral code for investment purpose. Islam has very clear perceptions on how business should be conducted with main focus on social as well as ethical business dimensions. Islam needs Muslims to lend their lives in accordance to the Islamic legal code of Shariah where the Muslims across the world expected to follow the rules. Here, Islam places main emphasis upon the ethical values in all aspects of human lives. However, Islam teaching mainly stress upon ethical values as well as moral principles in human behavior (Platonova et al. 2016).

Rationale or purpose of the study

The idea of integrating moral values as well as constituent of community accountability in economic and financial matters had mainly established constant concentration in the trade world recently. In addition, social accountable financing had emerged in the West for bringing a fairer as well as more sustainable society (Charfeddine, Najah and Teulon 2016). Furthermore, Islamic banking came into existence for providing alternative ways of financing for the development needs of society and community as a whole. In that way, it is understood that both Islamic as well as socially responsible finance had been derived from the teachings of Quran and the Prophet.

The main aim of the study is to assess the corporate social performance of financial institutions that adheres to the parallel ethical worldviews that include both Islamic and secular humanistic (Mallin, Farag and Ow-Yong 2014). The present research paper explains as to how far financial institutions and socially responsible financial institutions cam embrace the socially responsible approach in their core operations (Al-Khazali, Lean and Samet 2014). The study gives proper emphasis upon the extent to which institutions fulfill their economic, ethical as well as legal and discretionary responsibilities where the society can best manage with the CSR issues.

Islamic Finance can be explained from the shareholder assortment by linking these overlap core principles for accessing large amount of Socially Responsible Investing funds that are made obtainable in the worldwide markets. It is important to understand the fact that momentum is being built by realizing the connectivity of Islamic funds with globally communally accountable speculation finances (Jawadi, Jawadi and Louhichi 2014)

Research Objectives

• To evaluate the policies of SRFIs (Socially responsible financial institutions) that relates to their Corporate Social Performance
• To elucidate what lessons can be learned from the experiences and practices of SRFIs to better meet the needs of stakeholders
• To eliminate communal and inexpensive prejudice from the culture by establishing better relationship among rich and poor people
• To mobilize wealth among all the people in the culture
• To provide facilities to the poor people for creating new jobs market and trade undertaking by using their merits, ability as well as knowledge after eradicating redundancy problem from the culture Proposed Methodology

Research Design

In this particular research paper, the researcher needs to evaluate from the different types of research design and select the best out of it that suit the case. Research design is actually a set of methods as well as procedures that are collected and analyzed that links with the research problem identified in this paper. There are three types of research design and these are experimental research design, exploratory research design and descriptive research design (El Khamlichi et al. 2014).

Experimental design is the process that help researcher for testing the theory by reaching to suitable conclusion on matters relating to finding relationship between independent as well as dependent variables (Borgers et al. 2015). This type of research design refers to the conceptual framework where the experiment is being conducted.

Exploratory research design is the process that develops operations definitions as well as improves the final research design. This type of research design helps the researcher to decide the best research design as well as subject selection and data collection method (Bennett and Iqbal 2013).

Descriptive research design is the study that is conducted by the researcher to depict the participants in the most accurate way. There are further two ways to collect information and these are case study and observational. Case study means in-depth study of an individual or a group of individuals (Alamer et al. 2015). Observational means a method that is used for viewing and recording of activities participants

For this research study, the researcher will be selecting descriptive research study as this design describes situations. In same way, the major purpose of the section is to find out whether Islamic banking and finance are socially responsible. This is a situation that needs to be best understood in this study in a descriptive way (Abedifar et al. 2015).

Research Philosophy

Positivism, Interpretivism and Realism are the main three types of research philosophy.

Positivism is a hypothesis that states certain information is based on natural occurrence as well as their possessions and relations. Furthermore, the data are mainly derived from sensory knowledge that is inferring through proper reasoning and logic so that it forms the restricted sources of specific information.

Interpretivism is an approach to social science that resists the positivism of natural science. This research philosophy is used when the research uses qualitative data sources for researching purpose. Therefore, Interpretivism is a school of thought in contemporary as well as law philosophy (Abdul-Rahman 2014).

Realism is one of the research philosophies that rely mainly on the idea of autonomy of realism from the human mankind. This particular research viewpoint is based on the hypothesis of a methodical approach for developing accurate knowledge.

For this study, the researcher will be using Positivism Research Philosophy as it deals with scientific collection of accurate data and this is possible only by using quantitative sources of data. The present study adopts quantitative research method for conducting the study so as to understand whether Islamic Banking and Finance are using ethically investing and social responsibility in their operations.

Research Approach

Deductive approach aims at testing the theory while inductive approach deals with the generation of new hypothesis that emerges from the information.

For this research study, the researcher will be using deductive approach as it works from more general to the more specific (Abdelsalam et al. 2014).

Data Sources

The sources of data used in the study will be quantitative data by the researcher.

Data Collection techniques

The techniques that will be used by the researcher for this study will be questionnaire method where the questions will be asked to participants (both Muslim and Non-Muslim) regarding Islamic banks and finance on how far they had adopted socially responsibility and ethical investing.

Issues of reliability and validity

The researcher has to make sure that the data collected for the study is reliable and valid at the same time otherwise the purpose of the research will be wasted if any discrepancy is present. The researcher need to

Sampling techniques

The sample size will be 50 Muslims and 50 Non-Muslims participants. The sampling technique used in the study will be simple random sampling method where sample participants will be selected randomly without any biasness.

Data analysis and interpretation

Quantitative data will be analyzed by the researcher by using different statistical methods like correlation and regression. These tools will be represented by using SPSS software. Data will be collected by using GoogleForms where the participants will answer the questions asked in the questionnaire.

Conclusion

At the end of the section, it is concluded that Islamic Finance and Islamic Banking mainly can be seen as new thoughts and function to bring principles and communal fairness into the monetary and financial fields. In addition, the Islamic financial scheme actually has moral foundations that are based on achieving wealth as well as fair sharing of profits and possessions in and across the culture. One of the ways that can be used to manifest the communal role of Islamic banks is mitigation of poverty by providing business to the poor for increasing their profits and possessions. Here, it is noted that Islamic Banks plays major role in providing communally attractive speculation by putting strong prominence upon the principled and ethical proportions of conducting the trade and selecting the behavior or commodities that need to be financed. Furthermore, Islamic banks have different principles that include commitments to the communal interest, human welfare endorsement as well as care for the surroundings and deals with financial and communal fairness. It is important to consider the fact that financial accounting services help poor people and has significant contribution towards poverty reduction. It can be enhanced by increasing the Islamic banking behavior into rural areas as well as small group of people that increases mobilization of economic resources through the collection of Muslims Zakah and Sadaquah that need to be directed to the poor people. Therefore, the Islamic banks need to uphold close contacts with the poor people that either directly or ultimately cooperates with the legislative and non-governmental organization.

References

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