Audi Gets Serious Towards International Compliance in CSR Reporting

By KhaledKassar* and Ghada Hassan

A year back, when I wrote about Bank Audi’s first Corporate Social Responsibility (CSR) Report(1), many congratulated me and others blamed me for the critical tone I had at that time. Yet, I was deeply convinced that the technical analysis we provided in our review was actually a reflection of our duty to highlight and evaluate CSR practices in Lebanon, from strategy to reporting, despite our belief that any contribution, regardless of its size, should be considered with positivity.

Remains the question of CSR materiality to business and impact creation which are the essence of a corporation’s responsibility towards its shareholders and stakeholders and were at the heart of our last year commentary. As the single largest private contributor to Lebanon’s GDP, the largest private Lebanese employer, the largest lender to the domestic economy, and the largest Lebanese tax payer(2), CSR expectations from Bank Audi were set very high compared to other banks and corporations, as well as some reputable civil society organizations with remarkable achievements. This year’s report, with the strategic vision and messages it defuses, the road maps it presents, the extent of transparency it provides, and the engagement it realizes, simply proves that we were right about our conclusions and that our efforts for raising the bar in CSR implementation and reporting are incredibly paying off.

Bravo Bank Audi!

Bank Audi’s 2012 CSR Report has moved major steps forward from being a regular communication exercise in 2011 to a fully fledged report complying with internationally approved disclosure standards. Publishing a report for the second consecutive year is the main significant indicator of the Bank’s serious commitment to its CSR journey and to preserving connections with stakeholders.

Leadership belief and dedication are felt throughout the report. This directly induces a “confidence net” that the CSR culture is being nurtured and would be driven to success and far-reaching goals the same way the bank business is being managed and led to pioneering ranks. Having the Bank’s board and key decision-makers resolute in their commitment to see a CSR policy through (Bank Audi’s CSR policy was ratified by the Board of Directors in early 2013) fosters Bank Audi’s credibility and accountability in terms of materializing and further developing this policy in the coming years.

Undoubtedly, Audi succeeded in setting a CSR reporting benchmark for other Lebanese banks and corporations, hopefully preparing the field for healthy competition that would generate real CSR advancements in Lebanon, a state of thing we have been striving to witness since CSR LEBANON establishment in 2009.

Strategic Approach

The first accreditation criterion of a CSR report is the existence of a clear and well defined CSR policy on which the reported initiatives have been achieved. A materiality check (analysis of the relative importance to business in terms of magnitude of impact) is also essential at the development phase of the strategy as well as while carrying out an impact assessment for evaluating efficiency and measuring performance.

Bank Audi’s CSR report places a great emphasis on the bank’s CSR policy that was brought to light in 2012 and founded on four key pillars: Corporate Governance, Economic Development, Community Development, and Human Development. According to the report, the policy emanates from a thorough consideration and understanding of the Bank’s sustainability context, thus, identifying strategic priority areas of interest that would determine the Bank’s long term viability and success which goes hand-in-hand with its ability to create economic and social value for its shareholders and stakeholders and society at large and aligns with its core values of transparency, human capital, heritage, quality, civic role, and innovation.

A concrete example is the Bank’s attempts to address arising challenges due to the current economic downturn by collaborating with leading nonprofits to encourage entrepreneurship and create economic opportunities. Evidence of Bank Audi’s progressive involvement in integrating CSR practices is the Bank’s way of building on its chief position as a “responsible financial services provider, an integral member of society and a prime employer in the Lebanese market” (the Bank has a local network of 80 branches, one of the largest in Lebanon, and employing around 2,800 people). Another evidence is that the Bank has also set up a special CSR committee of seniors from multiple divisions with the aim of coordinating efforts to influence the Bank’s operations and engage the various departments into CSR action. Not to forget that the Bank was also the first (and only bank as far as we know) to establish a dedicated CSR Unit lead by Mrs.HasmigKhoury paving the way towards serious uptake on CSR.

The Bank has also been set to fully embrace CSR by adopting internationally recognized guidance and principles. It is the first banking institution in Lebanon to pilot the ISO 26000 Guidance on Social Responsibility in 2012 and rely on some internationally accepted reporting standards. These cover governance structure commitments, economic performance indicators, labour practices and decent work performance indicators, community and environmental performance indicators, fair operating practices, consumer issues, human rights, and anti-corruption (it is worth noting that incorporating the ISO 26000 as part of the Governance Pillar only(3) might be confusing as the Guidance consists of a comprehensive framework covering the various aspects of CSR among which corporate governance).

In this respect, the report provides in most of its parts proper documentation of the main activities relevant to each of the four CSR pillars and a mapping of how the latter are consistent with the ISO 26000 Guidance as well as the UN Global Compact Principles(4)(Fransabank is the first and only Lebanese bank member of the UN Global Compact as of end of November 2013). Unveiling details about the auditing and information verification process is a valuable attestation of credibility, transparency, and accountability for the CSR plans and objectives.


Going through the thorough presentation of Bank Audi’s CSR vision, values, policy pillars, and relevant accountability attributes (we can recommend here to make shorter and more straightforward references in later reports to the CSR policy to avoid repetitions and get the reader quickly into the engaging part of the report), we swiftly capture that the Bank’s CSR accomplishments have been smoothly layered under each of the priority areas. Furthermore, we could remarkably perceive the balance between the descriptive parts and the inclusion of case studies, figures, and details about relevant initiatives.

Provided examples support the strategic orientation conveyed by the leadership message and adequately showcase the value proposition of the adopted policy. For example, the Grow My Business initiative, under the Economic Development pillar, is an illustrative example of a strategic material cause supporting the Bank’s business strategy and aimed at helping entrepreneurs and SMEs start new businesses or further expand their activities within a critical economic environment especially amid a drastic lack of job opportunities for youth. Nurturing such a young business community will certainly have positive implications for the bank in terms of increased partnerships, productivity, profits, and sustained growth which actively contribute to economic development.

In the Community Development pillar, several areas have been identified mainly: health, humanitarian/social support, culture, sports, and the environment. Several of these contributions are common with many other banks and corporations, and we could note the cause-related marketing initiative, “Donate your Points for a Good Cause“, which is part of the Audi Rewards Program, a scheme that proved to be a successful approach to support humanitarian associations while at the same time engaging stakeholders and generating business to banks. Albeit, to foster differentiation and further allow the reader to capture the strategic CSR framework defined by the Bank, we highly advise that Audi focuses in upcoming reports on key multi-stakeholder “collaborative initiatives” that engendered the highest level of involvement, partnership creation, and shared value. While sponsorship provides key funding for several initiatives or events, it remains mostly perceived by the public as a marketing and PR practice that may hinder the effect created by genuine CSR initiatives. It could also be accused of window dressing when categorized as a responsible contribution. Critical attention should be paid to the fact that some events may be characterized with opulence despite the social aspect associated with them. We can imagine what could be the reaction of underprivileged people living in disadvantaged areas when they hear about a “social” event taking place at a Casino for example!

While the Environment component is deemed essential under the international sustainability guidelines with which Bank Audi complies, it is surprisingly listed under the Community Development pillar of the Bank’s policy. This could be explicable in view of the limited negative impacts usually produced by the financial industry on the environment compared to other sectors like industries, telecom, real estate, oil and gas, and others. Nevertheless, the initiatives highlighted by the Bank like the AUB and the Federative Economy Projects are worthy to be further expanded in the report. Furthermore, the Bank has granted a total of $10 million of environmental friendly loans in 2012, which exceeds other social investments made under the CSR umbrella (it could have been interesting to provide more information about the allocation of these loans and their assessment criteria and whether these are incentivized loans compliant with the Central Bank circular 236 issued in November 2010(5)). Last but not least, a separate Environment section could have been a reasonable addition to the report considering that most of the future targets projected under the Community Development area are environment-related.

Two aspects of human development are also portrayed: internal or the workplace, which is the dominant part, and external. Internally, it is certainly impressive to see Bank Audi investing heavily in training and development, and safeguarding gender diversity, equal opportunities for all, fair compensations, work-life balance, health and safety, etc., all translated into a high level of employee satisfaction and a human capital turnover ratio as low as 4.2% in 2012. On the other hand, we can see some improvement in Bank Audi’s outward-looking perspective in terms of human development notably through the educational loans and scholarships. Yet, we still wish to see real initiatives and efforts directed towards “empowering the youth and equipping them with the skills they need for future career advancement and success.” Preparing talent for post-graduate career challenges and opportunities through workshops and training programs intended for know-how and expertise transfer, also enables one to benefit from a pool of competent candidates. This advantageously meets with the Economic Development Pillar of Audi’s CSR policy.

Transparency and Measurement

The report is adorned with a good deal of figure highlights, charts, illustrations, ratios, and other metrics and indicators that allow readers to track Audi’s contributions both in monetary terms and performance measurement. However, impact evaluation would have required the inclusion of more relevant indicators to some reported initiatives and to further breakdown the disclosed numbers and the end beneficiaries, increasing thus the level of transparency even if the result might lead to detecting imbalances in some areas. Also, significant details were lacking about some supported initiatives like Bader and Arabnetwhere we couldn’t clearly perceive Bank Audi’s level of contribution and whether this was limited to financial grants only.

Activities are time bound to 2012 setting a benchmark for future reporting exercises with the absence of comparative measurements. Forward looking information and targets for 2013 are included at the end of each section, promising continued commitment to fulfilling the CSR policy. We hope that later reports provide a multi-year projection of plans and objectives increasing thus transparency about the level of achievement, of the progress made, and of the risks to implementation. This also brings to the front the need for the Bank to constantly evaluate its CSR policy and make sure it is moving into the right direction.

Positive feedback from partners and stakeholders pleasantly sparkle throughout the report reflecting third party scrutiny and engagement in endorsing the document while increasing the credibility of the provided information. Moreover, The Group Internal Audit review gives valuable insight on areas for improvement which is a solid confirmation of accountability. However, we strongly recommend seeking third party Quality Assurance from renowned  corporate advisories common to both the general public as well as the local and international business community like the Global Reporting Initiative (GRI) from which Bank Audi has shown willingness to receive accreditation. Further clarity on the followed methodology in the quality assurance process (in terms of interviews with senior management and executives, peer review of CSR reports, stakeholder feedback surveys, etc.) is certainly required as an evidence of the assuror’s  integrity, independence, and impartiality as well as the Bank’s commitment to continuous improvement.


Thought leadership strongly establishes a clear strategic CSR direction at the beginning of the report and sends a powerful and appealing message to the readers that Bank Audi makes an integral part of the society and holds itself accountable for its status not only as the largest bank in Lebanon with the greatest influence on the local economy, but also as a responsible corporate citizen which interests derive from the fulfillment of those of its stakeholders. 

The story is there, a leading bank that seeks to sustain a sound financial performance while advancing its banking solutions to meet its stakeholders’ expectations and requirements. It is really about upholding risk management, controls, and governance practices while assuming a greater responsibility to “be a role model for ethical behavior, for environmental awareness, for community engagement and support, and for the promotion of culture”. The message keeps resonating through the pages in the different sections backed by narrative and case studies. Yet, Bank Audi should be selective about including the most significant initiatives and discarding non relevant ones to avoid weakening the context and creating distractions away from the main achievements. It should be noted that efficient communication is mainly based on quality rather than quantity, i.e. it is better to focus on positive long term impact, engagement, strategic investment, and business case.    

The report structure follows the CSR policy dimensions and permits to steadily pursue the story parts in a consistent way while memorizing key issues in the report especially with the use of illustrative visuals. Sections are developed alike starting with descriptive paragraphs on materiality followed by facts and case studies. The space is fairly exploited with the possibility of developing certain parts and shortening or removing others as noted earlier in the commentary.

On the engagement side, we believe that celebrating the publishing of Bank Audi’s second CSR report through a media campaign and other means is as important as announcing Bank Audi’s yearly financial results. It is an additional indicator of the Bank’s financial and operational health. Furthermore, it is very essential that Bank Audi produces an Arabic version of the report to reach a wider group of its clients and stakeholders.

The Way Forward

A professional, credible, and audited CSR report is an essential tool to develop positive communication with surrounding communities, while creating allies, and motivating business and community partnerships. It is also a vital management tool aimed both at evaluating progress and at driving performance and internal processes.

Bank Audi has succeeded to a large extent to produce a report that places it at an advanced rank in CSR reporting in Lebanon. We highly advise that Bank Audi works insistently on reviewing and identifying material issues affecting its business sustainability and policy for the long term and on realizing a higher level of corporate / employee engagement by actively developing a CSR mindset throughout the Group.

Our expectations from Bank Audi remain very high. It is obviously within the bank’s capacity to further improve its recognition as a leader in CSR and CSR reporting.



* KhaledKassar is the founder and CEO of CSR LEBANON, a social enterprise aiming to raise awareness about Corporate Social Responsibility and to enhance CSR dialogue in Lebanon and the arab region.

(1) Kindly refer to Issue No. 3 of Responsible Business Quarterly Review, July-September 2012, ‘Sorry Bank Audi; This is not a CSR Report” analysis.

(2) As described by Bank Audi in its 2012 CSR Report based on the provided financial data.

(3) Please refer to figure 3. CSR at a glance at end 2012 on pages 14-15 of Bank Audi’s 2012 CSR Report Read More.

(4) Bank Audi is not currently a member of the UN Global Compact and is encouraged to become a signatory to the global initiative.

(5) As part of its support for a national strategy for sustainable development, the Banque Du Liban (BDL) issued on November 25, 2010 intermediary circular n°236 which brought new and significant exemptions from the required reserves for the credits granted to finance new ecological projects in the renewable energy sector, as well as for the credits granted to finance solar system installation which will also be at zero interest.


SourceResponsible Business Magazine




All, 2013