A Comparison of Sharia Law and CSR with an Application to Investment: Responsibility, Causing and State of Mind

Document Type : Original Research Article

Author

Lecturer, Peace Studies Department, Dar Al-Hikma Higher Education Institute, Qom, Iran

Abstract

The purpose of this study was to compare Sharia law with corporate social responsibility (CSR) with an application to financial investment. Promoting economic growth through business whilst ensuring that society and the environment do not become victims of businesses financial gains are one of the fundamental challenges faced by modern society and businesses. CSR suggests businesses should conduct themselves in ways that benefit society or reduce social problems.  Islam stresses the concept of social responsibility. It is legitimate for a business to aim to achieve profit, but this goal should be pursued according to Sharia.  CSR and Sharia law share the principle of the conduct of individual entities being regulated by its consequences. On the other hand, there are some differences between corporate social responsibility and sharia law. These differences and the question “are CSR and sharia law compatible?” have been explained with particular application to the financial sector. In Sharia law primary focus is on the individual; whereas in CSR main attention is to the corporation.  To answer the above-mentioned question, justice is the supreme purpose and ruling spirit of the Sharia. Islam stresses the concept of social responsibility. In Sharia law, the social responsibilities of individuals also apply to firms. Thus it is legitimate for a business to aim to achieve profits, but its goal should be pursued according to Sharia.

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References

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