Corporate Social Responsibility in Indonesia

Abstract

AbstractMultiple studies have concluded that natural products-related industries, such as mining and energy, are particularly vulnerable to environmental concerns. These industries therefore have an obligation to disclose their corporate social responsibility (CSR), especially information related to environmental issues.However, the findings from this study revealed that environmental information was the least disclosed information among annual and sustainability reports for 39 Indonesian listed mining companies between 2016 and 2017. Based on these findings, this study attempted to seek further of the reasoning behind the scarcity of environmental disclosures.Content analysis was applied to calculate the extent of information disclosed within reports. While companies were found to have conducted a substantive amount of CSR activities, environmental information was the least disclosed information. This was compared to other information, such as governance, economy and social disclosures. Further in-depth interviews with CSR-related functions of the company resulted in several insights. First, natural products-related companies faced difficulties in calculating environmental figures. Second, as one of the most highly-scrutinised industries, natural products-related companies feared the potential backlash from non-governmental organisations (NGOs). Third, all natural products-related companies are obliged to participate in in annual environmental rating evaluation by the Indonesian government, called PROPER. Therefore, information pertaining to the evaluation by PROPER are considered sufficient, and, as a result, companies are hesitant to disclose more information.The findings of this study could provide various insights into companies ’ practice of CSR disclosures . While a substantial amount of existing studies have discussed topics related to the most disclosed sustainability information, this study focuses on the opposite. Scholars may find an added benefit by analysing both sides of the spectrum. Additionally, this study may also provide a better understanding on the increasing gap between the extent of reporting companies disclose, and their reality in practice.