Corporate social responsibility disclosure in the Takaful sector

PurposeThis study aims to assess the extent of corporate social responsibility (CSR) disclosure in Takaful (Islamic insurance) companies.Design/methodology/approachThis study uses a qualitative approach, utilizing a CSR disclosure index and content analysis to examine the annual reports of 33 Takaful companies over the period from 2018 to 2022.FindingsThe findings indicated that the mean CSR disclosure score was 30.2% with significant differences in dimensions. The highest disclosure percentage (53.3%) was noted in the customer dimension, proving increased activity in this sphere. However, some of the critical dimensions like environment and Shariah compliance were critically low. The result shows that while Takaful companies are committed to some CSR aspects, there are significant opportunities that can be explored in environmental sustainability and Shariah compliance.Practical implicationsThis study highlights the imperative for Takaful companies to elevate their CSR disclosure practices by aligning with the Sustainable Development Goals (SDGs) and ensuring dual compliance with both SDGs and Shariah principles. By prioritizing environmental sustainability and Shariah compliance, these companies can significantly enhance stakeholder trust and fulfill ethical obligations inherent to Islamic finance. The adoption of targeted CSR strategies, complemented by the integration of advanced technologies such as artificial intelligence, can streamline CSR reporting processes, thereby increasing both efficiency and accuracy.Social implicationsEnhanced CSR disclosures promote transparency and accountability, fostering trust within Muslim communities and the broader society. Emphasizing environmental sustainability and Shariah compliance supports ethical practices and social cohesion. In addition, investing in community welfare and poverty alleviation initiatives contributes to economic and social development, aligning corporate actions with Islamic ethical values and improving overall quality of life.Originality/valueThis study therefore seeks to fill this gap by offering a robust evaluation of CSR disclosure, focusing on the Takaful industry, contributing to the broader discourse on Islamic finance and CSR.