Drivers and initial pattern for corporate social innovation: From responsibility to sustainability

Abstract

The Indonesian Ministry of Environment and Forestry released the latest regulation regarding the environmental business rating assessment mechanism in 2021, Proper, which was participated by 2593 companies by adding a new assessment to the element of community empowerment, namely Corporate Social Innovation (CSI). To that end, identifying the institutional approach as the drivers and patterns for corporate social innovation in Gold Proper industries by taking into account the challenges and opportunities faced by the community so that responsibility is transformed into sustainability is essential. This research uses Petrokimia Gresik Ltd (PTPG) and Bukit Asam Pelabuhan Tarahan Ltd (PTBA) as case studies through explanation building. This study finds that the Proper program acts as an essential driver of CSI in Indonesia and is a good lesson learned that drives the transformation of CSR into CSI. However, the application of CSI in companies has not been ideal considering the timing of the enactment of regulations that are still new. The Gold Proper rating industries only rely on adaptation to regional social and economic issues, do not match the company's core competencies, and do not yet have a clear pattern. In addition, the company has not made CSR activities a strategic step and tends to only try to match it with the core capabilities of the company's activities. This study recommends companies develop CSR activities that will be proposed as CSI in a strategic form and provide direct benefits for the community and the company with a direct and comprehensive measure.