Abstract

Corporate social responsibility (CSR) is the latest issue that must be observed by business people in carrying out their business processes from raw materials to the end consumers who have implemented CSR properly. And, the company must promote superior products that its produces are environmentally friendly and do not damage the environment. Investors will see the technical and fundamental analyses of the company whether they have implemented regulations and government policies in producing their products, and then buy shares from the company because they have confidence that companies that implement CSR will increase the company’s value and have a good brand image so that the market responds positively. As well as the roles of government and society as regulators of laws, and the public who observe the implementation of CSR must be responsive and must inform if there are violations committed by business practitioners against CSR. Based on the analysis by the author, it turns out that CSR has no effect on company’s value as measured by the price-to-book value (PBV). CSR implemented based on the GRI G4 is still below 50% of the 79 items that must be disclosed in the financial statements, which means that the company has not fully implemented CSR based on GRI G4 in its business processes, which obtained an average of 41.45%; but there are those who have applied it close to 100%, namely, PT Timah (Pesero) Tbk with an average CSR of 89.62%. But the PBV is low at 1.55. In contrast, PT Unilever Indonesia CSR is at an average of 41.43% but the PBV is 46.09, meaning that in this study CSR has no effect on firm value. CSR is implemented by companies not because of the awareness of the company or its responsibilities but only because of regulations issued by the government in order to complete and manage permits obtained easily.

Highlights

  • Every company in the business process will interact with the social environment

  • We examined whether corporate social responsibility affects the value of companies listed on the Sustainable and Responsible Investment (SRI) KEHATI Index from 2012 to 2016 (Table 2)

  • Processed according to the standard Global Reporting Initiative (GRI), descriptive statistics are presented as follows: Based on Table 4, the average corporate social responsibility (CSR) variable of the companies listed on the SRI KEHATI Index for the period from 2012 to 2016 was 41.45, with a standard deviation of 12.64 or 41.45%, which is still considered small because it is still below 50% of the indicators contained in Corporate Social Responsibility Index (CSRI) GRI

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Summary

Introduction

Every company in the business process will interact with the social environment. As a result of this interaction requires reciprocity between the company and the social environment that has implications for the emergence of social impacts on the company’s operations on the environment around the company. A good company seeks economic benefits and has a concern for environmental sustainability and public welfare It is known as a company whose products are environmentally friendly, which is not polluting the natural environment by the products it produced. Achmad [2] explained that CSR was born from the public’s insistence on corporate behavior, which is usually always focused on maximizing profits, the welfare of shareholders, and ignoring social responsibilities such as environmental destruction, exploitation of natural resources, and so on. CSR disclosure standards developed in Indonesia are referring to the Global Reporting Initiative (GRI) standard because they are more focused on disclosure standards on various performances: economic, social, and corporate environments with the aim of improving the quality and utilization of sustainability reports. This information is usually already reported in the financial statements

Environment
Social
Company’s value
The influence of corporate social responsibility on company’s value
Sri Kehati Index
Discussion
Findings
Conclusion
Suggestion

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