Islam as a social philosophy encapsulates in its wide array of formulations, from socio-political realm to moral and ethical perspectives. As starkly different from all other theologies, Islam seeks to provide solutions to every issue inherent in society. Islam provides a basic guideline, both on an individual and collective level, on how a given society should engage in day-to-day life. From more ethical and moral precepts of Islam, one can deduce the concept of social responsibility. As the role of moral, ethics has been underpinned in Islam for over 1400 years, whilst the concept of corporate social responsibility is a relatively new phenomenon in present business undertakings.
This article is an attempt to show how CSR is not only compatible with Islam, but present in Islam way before it was adopted by the West, based on sound Quranic and jurisprudential rulings.
As the billionaire, Ray Dalio, manager of the World’s largest hedge Bridge Water openly said that “capitalism is falling” and that a “revolution” is coming. The economic system with the tinge of CSR; with its 2.5% Zakat Wealth Tax gives us a clue how to eliminate the worst social inequality.
Muhammad Yesilhark one of the Worlds renowned philanthropist said: “Once we strip away the Arabic terminology, concepts like Zakat can return our economy to the common sense based, a transparent and equitable setup that the architect of modern capitalism envisaged.”
This article is limited to the extent that whether the CSR is consistent with Islamic Law with the aim to find out any Islamic notion, Verses of Quran or Hadiths of Prophet Mohammad that are connected to CSR and that proves that it is supported by and not inconsistent with Islamic law.
CSR: Definition and History
The term Corporate Social Responsibility can be said to be coined by the western world but it can be strongly argued that CSR is not just a child of scholars of Western Notion. The notion of CSR is found in Islamic law as well, though not in similar terms such as “corporations” and “socially accountable”. According to Islamic law or Sharia, being just and fair while conducting business is an obligation on every Muslim. It includes detailed rules regarding the conduct of Muslims involved in commerce.
On critically analyzing the concept of CSR one can find the true nature of CSR that is “conducting your business while preserving the environment, treating your workers well, being fair to your competitors, being honest and just in your dealings, caring about society and looking after all stakeholder’s interests without undermining those of the shareholders.”[1]
After understanding the nature of CSR one can firmly say that CSR is in the essence of Islamic law that is Sharia and not only this but also it forms the root of an ancient tradition of business and wealth distribution in Islam, moreover in Islam the position of CSR is not only a mere recommendation but it is an obligation for every Muslim to abide with it and incorporate this principle in the practices of business and wealth distribution.[2]
“The sacred law of Islam is an all-embracing body of religious duties, the totality of Allah’s commands that regulate the life of every Muslim in all its aspects.” (Schacht)
The concept of Corporate Social Responsibility (CSR) is supported by and is consistent with Islamic law; it is not confined to the Western world. Corporate Social Responsibility is primarily a strategy of large corporations to operate in ways that enhance society and environment, instead of contributing negatively to them. It follows the principle that gaining profit isn’t all that matters for corporations, they must play an active role in sustainable development by being socially, environmentally, and economically more accountable.
Islamic law, Sharia and Fiqh
Islamic law, Sharia refers to “the sum of legal rules that God has legislated and sent to the people through Muhammad (SAW)”. There are strictly two sources of Sharia, viz. the Quran and Sunnah. Other sources such as the rules and opinions of the companions of Prophet Muhammad (SAW), Islamic scholars, leaders, and legislators are not part of Sharia. Sharia is static.[3] Whatever Allah and His Messenger have made permissible according to the Sharia will always be permissible, and whatever they have made forbidden will always be forbidden.
Fiqh literally means “deep understanding” or “full comprehension”. It is different from Sharia. It refers to the opinion of eminent Islamic scholars about Islamic law. In other words, Fiqh is the human interpretation of Sharia by Islamic scholars and its application in the lives of Muslims. It is the understanding of the Sharia–the Quranic verses and hadiths- and knowing how to derive rulings from them. Fiqh is not binding on Muslims, unlike Sharia.
Further, while Sharia is not subject to any change, Fiqh is dynamic; it can evolve in accordance with the principles of Sharia to accommodate timely changes so that the Islamic laws are at par with the current era.[4]
The author is a Lawyer based out of Delhi.
[1] Jawed Akhtar Mohammed, Corporate Social Responsibility in Islam 60 (2007) (unpublished Ph.D. dissertation, Auckland University of Technology) (on file with the Auckland University Library).
[2] Asyraf Wajdi Dusuki & Nurdianawati Irwani Abdullah, Maqasid al-Shari’ah, Maslahah, and Corporate Social Responsibility, 24:1 AM. J. ISLAMIC Soc. SCI. 25, 31 (2007).
[3]Nicholas HD Foster, Islamic Commercial Law: An Overview (I) available at www. indret.com, visited on May 1st 2019
[4] Arskal Salim, Challenging the Secular State: The Islamization of Law in Modem India p.no. 12 (2008).
