Corporate Social Responsibility (ISO 26000)

Corporate Social Responsibility (CSR) is a concept whereby companies voluntarily integrate social and environmental interests in business operations and their interaction with stakeholders (European Commission, 2006). Another definition of CSR mentioned CSR as all activities undertaken by the company to adapt and contribute to the values and expectations of society. Its defined company is commitment to continually consider elements of business ethnic in management and overall organizational structure and operations.

CSR commitments are intended to contribute sustainable economic development of employees, suppliers, local communities and the wider community to improve the quality of life together (World Business Council on Sustainable Development, 2006).

CSR has 3 main pillars (triple bottom-line), namely Finance, Social, and Environment. In its development, these three pillars are enriched by aspects which proclaimed by the UN: Human Rights, Employment and Anti-Corruption (United Union of Global Compact website, 2010).

Why do companies implement CSR?

In modern society today, provide customer needs only is not enough. Indonesian society began to expect certain companies to act more ethically and socially responsible. Therefore, in decision-making process, company avoids any unlawful activity or potentially has negative impact for reputation and company’s image to prevent customer dissatisfaction. CSR is now seen as one strategy to achieve competitive advantage in purpose to win customer’s heart and add value for company’s business and society, it is intertwined with each other.

CSR and Reputation

Warren Buffett, the famous businessman with a reputation that says, “It took 20 years to build a reputation and 5 minutes to ruin it.” As the formula below:

In the basis of that argument, good reputation of an enterprise can be achieved when good performance is also supported with effective communications to customers. It can be bridged by implement CSR. CSR assist an intense relationship between companies with its stakeholders. Its obtaining strong image plus higher level of stakeholder’s confidence.

The first question for top management in relation to CSR strategy should be: “Where’s CSR activities focus on during this?” And the most important question is: “Where CSR activities should be focused on?”

And we, Premysis Consulting is ready to help you to answer these questions so that you can implement CSR with the right focus, including the development of Sustainability Report and finally your company’s reputation can be increased based on that.