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- Title
The Development of CSR Implementation in Indonesia and Its Impact on Company's Financial and Non-financial Performance.
- Authors
Ridho, Taridi K.
- Abstract
The purpose of this study is to describe the development of corporate social responsibility (CSR) implementation in Indonesian listed companies. After briefly explaining the history and legal basis of CSR implementation in Indonesia, this article tries to deeply and widely describe CSR practices in top 200 Indonesian listed companies during the period of 2014 and 2015. The CSR implementation in Indonesian listed companies was benchmarked to ISO 26000 (guidance on social responsibility) standard in order to compare the CSR practices in Indonesia with global standard. Finally, this article will end with the conclusion on the relationship between the level of CSR practice with company's performance, both financial and non-financial performance. Result indicated that beside there was an improvement, the level of CSR implementation in top 200 listed companies in Indonesia during the period of 2014 and 2015 was generally still low compared to global CSR implementation standard. Companies in finance sector were the leader in implementing CSR practice in accordance to global standard, whereas those in miscellaneous industry as well as trade, services and investment sector were the two industrial group that became the poorest in implementing CSR. This might indicate that more regulations and initiatives need to be taken by related stakeholders such as government, industry association, media, etc. to push and motivate industry to do CSR more like their peer in global context. The second finding was that the level of CSR implementation had positive and significant influence on companies' financial performance, both measured by ROE and ROA, but not companies' non-financial performance, both form the customer and employees perspective. It means that doing better CSR will give financial reward to the company. However, many efforts are still required to convince customers and employees in Indonesia to show the value of CSR to them.
- Subjects
SOCIAL responsibility of business; FINANCIAL performance; RIGHT of initiative; TRADE associations; STAKEHOLDERS
- Publication
KnE Social Sciences, 2018, Vol 2018, p324
- ISSN
2518-668X
- Publication type
Article
- DOI
10.18502/kss.v3i8.2517