From Principles to Practice: Evaluating CSR Disclosures in the Global Takaful Sector

Submission Type

Paper Presentation

Abstract/Description

Purpose: This study aims to measure the level of CSR disclosure in Takaful (Islamic insurance) companies, examining how these firms communicate their social responsibilities.

Methodology: The study utilizes a CSR disclosure index and a content analysis approach to examine the annual reports of 33 Takaful companies over a five-year period (2018-2022), yielding a total of 150 observations.

Key Findings: The analysis revealed an average CSR disclosure level of 30.2%, with notable variations across dimensions. The customer dimension showed the highest disclosure levels (53.3%), reflecting strong engagement in customer relations. However, critical dimensions such as environment (0.0%) and Shariah compliance (15.1%) exhibited significant gaps. The findings indicate that while Takaful companies are committed to certain CSR aspects, substantial improvements are needed in environmental sustainability and comprehensive Shariah compliance.

Implications: The study identifies gaps in CSR practices, particularly in environmental sustainability and Shariah governance. The findings offer valuable insights for Takaful companies to refine their CSR strategies to better align with Islamic ethical values and global expectations of corporate responsibility. Enhancing transparency and expanding CSR efforts in underrepresented areas could foster greater stakeholder trust and contribute to long-term sustainability.

Originality/Value: This study addresses a critical research gap by providing a comprehensive assessment of CSR disclosure specifically within the Takaful industry, contributing to the broader discourse on Islamic finance and CSR. By focusing on Takaful companies, the study offers novel insights into the alignment of CSR with Islamic ethical values and provides a benchmark for future research in Islamic financial institutions.

Keywords

CSR Disclosure, Takaful Companies, Islamic Finance, Shariah Governance, Environmental Sustainability.

Location

Movenpick Hotel

Session Chair

Dr. Muhammad Ayub, Professor, Riphah University, Islamabad

Session Moderator

Dr. Shafiullah Jan, Head Center for Excellence in Islamic Finance, Institute of Management Sciences (IMSciences)

Start Date

3-12-2024 4:10 PM

End Date

3-12-2024 3:30 PM

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Dec 3rd, 4:10 PM Dec 3rd, 3:30 PM

From Principles to Practice: Evaluating CSR Disclosures in the Global Takaful Sector

Movenpick Hotel

Purpose: This study aims to measure the level of CSR disclosure in Takaful (Islamic insurance) companies, examining how these firms communicate their social responsibilities.

Methodology: The study utilizes a CSR disclosure index and a content analysis approach to examine the annual reports of 33 Takaful companies over a five-year period (2018-2022), yielding a total of 150 observations.

Key Findings: The analysis revealed an average CSR disclosure level of 30.2%, with notable variations across dimensions. The customer dimension showed the highest disclosure levels (53.3%), reflecting strong engagement in customer relations. However, critical dimensions such as environment (0.0%) and Shariah compliance (15.1%) exhibited significant gaps. The findings indicate that while Takaful companies are committed to certain CSR aspects, substantial improvements are needed in environmental sustainability and comprehensive Shariah compliance.

Implications: The study identifies gaps in CSR practices, particularly in environmental sustainability and Shariah governance. The findings offer valuable insights for Takaful companies to refine their CSR strategies to better align with Islamic ethical values and global expectations of corporate responsibility. Enhancing transparency and expanding CSR efforts in underrepresented areas could foster greater stakeholder trust and contribute to long-term sustainability.

Originality/Value: This study addresses a critical research gap by providing a comprehensive assessment of CSR disclosure specifically within the Takaful industry, contributing to the broader discourse on Islamic finance and CSR. By focusing on Takaful companies, the study offers novel insights into the alignment of CSR with Islamic ethical values and provides a benchmark for future research in Islamic financial institutions.