Bank's justice in CSR disclosure practices: does the religion of Islam matter?

Using content analysis, this study aims to empirically investigate the extent to which Islamic banks and Islamic Windows practice corporate social reporting (CSR) disclosure implied by Shari'ah principles from an Islamic society's perspective. Islamic banks are independent banks founded on Shari'ah principles and offer Islamic products and services, while Islamic Windows are a separate department of conventional banks providing Islamic products and services to society due to increased worldwide demand. Specifically, the study compares the extent of these disclosure practices between Islamic banks and Islamic Windows. It further compares the extent of CSR disclosure practices in a cross-cultural context between Islamic banks in Pakistan and conventional banks in Australia to identify whether Islam influences CSR disclosure practices of Islamic banks. CSR disclosures are measured using Ethical Identity Index (EII) and consider only disclosed information in annual reports rather than other reporting instruments. By incorporating Neo-institutional theory (NIT), this study provides insights into whether Islamic banks are seeking legitimacy through CSR disclosure practices in a country where Islamic ethical values as informal institutions have a significant influence on operational activities. The findings suggest that Islamic Windows are disclosing less compared to Islamic banks regarding social and ethical issues, which may risk their corporate and ethical reputation. Moreover, the results reveal that Islamic banks are not communicating any more CSR information than conventional banks, suggesting that Islam does not influence their business practices. The results will assist in understanding disclosure practices by Islamic banks and Islamic Windows in a distinctive social-cultural context where Islam is the dominant religion and influences CSR disclosure practices.