Corporate Social Responsibility Definition The publication by Howard

Corporate Social Responsibility

Definition • The publication by Howard R. Bowen (1953) – book Social Responsibilities of the Businessman mark the beginnings of the modern period of CSR literature • Initial definition of social responsibility: – “It refers to the obligation of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society” • Businessmen were responsible for the consequences of their actions in a sphere somewhat wider than that covered by their profit-and-loss statement

Definition • A concept whereby companies integrate social and environmental concerns in their business operations and stakeholder relations on a voluntary basis; it is about managing companies in a socially responsible manner (Holland, 2003)

CSR & Philanthropy • What is philanthropy? – Synonymous with corporate giving or sponsorship: “The effort or inclination to increase the wellbeing of human kind, as by charitable aid or donations. ” • Often aligned with marketing and PR efforts, • It is a positive and worthy activity, BUT, very narrow focus within most organizations • Philanthropy can be viewed as one component of CSR, BUT, Philanthropy is not synonymous with CSR

CSR & Sustainable Development Sustainable development: "Development that meets the needs of the present without compromising the ability of future generations to meet their own needs. “ (The Brundtland Commission, 1987)

Sustainability Reporting • The process of communicating the social and environmental effects of organizations’ economics actions to particular interest groups within society at large (Gray et al, 1996) • The reporting on the economic, environmental and social policies, impacts and performance of an organisation and its products in the context of sustainable development – Three Bottom Line Reporting

Standard • • The United Nations Global Compact Account. Ability 1000 Social Accountability 8000 The Global Reporting Initiative (GRI)

GRI 2006 - Indicators Sustainability Reporting Environmental Social Economic § Materials, § Energy, § Water, § Biodiversity, § Emissions, effluents, and waste, § Products and services, § Compliance, § Transport, § Overall

GRI 2006 - Indicators Environmental Labour Practices and Decent Work: Sustainability Reporting Social Human Rights Investment and Employment, procurement Labour/management relations, practices, Non. Health and safety discrimination, Training and education, Freedom of Diversity and equal opportunity association and Society Community, Corruption, Public policy, Anticompetitive behavior, Compliance Economic collective bargaining, Child labour, Forced and compulsory labour, Security practices, Indigenous rights. Product Responsibility Customer health and safety, Products and service labeling, Marketing communications, Customer privacy, Compliance

GRI 2006 - Indicators Sustainability Reporting Environmental Social Economic performance, Market presence, Indirect economic impacts Economic

Benefits • Reduces corporate risks • Protects and enhances reputation • Encouraging innovation and continuous improvements • Transparency to stakeholders – Build trust, addresses needs, strengthens dialogue • Gains competitive advantage in capital, labor, supplier and costumer markets • Creating financial value

Indonesia • UU No. 40 tahun 2007: – Perseroan yang menjalankan kegiatan usahanya di bidang dan/atau berkaitan dengan sumber daya alam wajib melaksanakan Tanggung Jawab Sosial dan Lingkungan. – Laporan tahunan harus melaporkan pelaksanaan Tanggung Jawab Sosial dan Lingkungan

Indonesia • Keputusan Ketua Badan Pengawas Pasar Modal dan Lembaga Keuangan Nomor: KEP-134/BL/2006 Tentang Kewajiban Penyampaian Laporan Tahunan Bagi Emiten atau Perusahaan Publik – Laporan tahunan wajib memuat uraian singkat mengenai penerapan tata kelola perusahaan yang telah dan akan dilaksanakan oleh perusahaan dalam periode laporan keuangan tahunan terakhir • Uraian mengenai aktivitas dan biaya yang dikeluarkan berkaitan dengan tanggung jawab sosial perusahaan terhadap masyarakat dan lingkungan

Indonesia • ISRA (Indonesia Sustainability Reporting) Award – Diadakan oleh IAI Kompartemen Akuntan Manajemen • PROPER – Diadakan oleh Kementrian Lingkungan Hidup • Keputusan Menteri Negara Lingkungan Hidup No. 127 tahun 2002 Tentang Program Penilaian Peringkat Kinerja Perusahaan dalam Pengelolaan Lingkungan Hidup – Peringkat terbaik (rating Emas) sampai yang terburuk (rating Hitam)