The most socially responsible banks aren't in free-market countries; they’re in places with really strict 'civil law' systems.
April 2, 2026
Original Paper
Legal Origins and Corporate Social Responsibility: Implications for Bank Governance and Regulation
SSRN · 6508271
The Takeaway
While many assume common-law systems (like the US and UK) are the engines of corporate social responsibility, a 40-country study found that CSR is actually much stronger in civil-law systems. The strict, state-mandated stakeholder protections in these countries force banks to prioritize societal goals more effectively than market incentives do.
From the abstract
Whereas prior research on corporate social responsibility (CSR) has largely focused on its economic outcomes, we examine whether and how CSR in the financial sector is shaped by legal origins. Using data from 40 countries, we find that CSR engagement is more strongly shaped by civil-law systems than by other legal traditions. This finding is consistent with the orientation of civil-law countries, which seek to advance broader societal and environmental objectives rather than focusing exclusively