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Published by
APINDO
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With the support of
Responsible and Inclusive Business Hub - Southeast Asia (RIBH SEA)
Sustainable Economic Development through Technical and Vocational Education and Training (SED-TVET)
Implemented by
the Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ) GmbH
On behalf of
German Federal Ministry for Economic Cooperation and Development (BMZ)
Authored by
APINDO
GIZ
Design, Layout and Creative
ROV Creative Media, Jakarta
Photo credits
Photo credits are indicated on respective photo
Publication date
LIST OF ABBREVIATIONS AND ACRONYMS
04
FOREWORD
06
I. CHAPTER 1 – ABOUT THIS STUDY
08
Objectives
08
Respondents
08
Why corporate social responsibility is important for companies and sustainable development
09
Strategic corporate social responsibility and inclusive business
10
CSR 2.0
11
Inclusive business
12
Methodology
13
II. CHAPTER 2 – DRIVERS OF CORPORATE SOCIAL RESPONSIBILITY IN INDONESIA 14
Tradition and cultural expectation
14
Regulation
14
International corporate social responsibility guidelines
16
III. CHAPTER 3 – ANALYSIS OF THE SAMPLE: GENERAL FINDINGS
18
Activity spectrum
18
Becoming more strategic
19
Five success factors
23
IV. CHAPTER 4 – INCLUSIVE BUSINESS AS STRATEGIC CORPORATE SOCIAL
RESPONSIBILITY
29
Inclusive business case studies
29
Opportunities
33
Challenges
33
Inclusive business potential
34
V.
CHAPTER 5 – CONCLUSION AND RECOMMENDATIONS
35
VI. CHAPTER 6 – CSR ASSESSMENT TOOL
37
VII. ABOUT THE AUTHORS
43
VIII. ANNEX 1 – PARTICIPANTS IN BRIEF
45
IX. ANNEX 2 – REGULATIONS
46
LIST OF ABBREVIATIONS
AND ACRONYMS
ADB
Asian Development Bank
APINDO
The Employers’ Association of Indonesia / Asosiasi Pengusaha Indonesia
BMZ
German Federal Ministry for Economic Cooperation and Development
BOP
Bottom of the Pyramid
CEO
Chief Executive Officer
COT
Centre for Occupational Training
CSR
Corporate Social Responsibility
EVPA
European Venture Philanthropy Association
GIZ
Deutsche Gesellschaft für Internationale Zusammenarbeit
GRI
Global Reporting Initiative
IB
Inclusive Business
ICT
Information and Communications Technology
ILO
International Labour Organization
ISO
International Organization for Standardization
MNC
Multinational Company
MNE
Multinational Enterprise
NGO
Non-Governmental Organisation
OECD
Organisation for Economic Co-operation and Development
PBSP
Philippine Business for Social Progress
PHBS
Pola Hidup Bersih dan Sehat / Clean and Healthy Lifestyle
SDGs
Sustainable Development Goals
SED-TVET
Sustainable Economic Development through Technical and Vocational Education and
Training Programme
SMEs
Small and Medium-sized Enterprises
SNV
Stichting Nederlandse Vrijwilligers / Netherlands Development Organisation
SRC
Sampoerna Retail Community
The Employers'Association of Indonesia
(APINDO)
Over the past decade, we have witnessed an increase in corporate social responsibility (CSR) practices within companies in Indonesia. As a result, we in the Employers' Association of Indonesia (APINDO) have begun to classify the practices into different categories, such as charitable CSR, promotional/marketing CSR or strategic CSR. We believe that the latter will be beneficial for the businesses themselves as well as society and the environment. Going forward, we hope the trend in CSR practice in Indonesia is moving towards strategic CSR.
Amid these developments, however, we are facing the challenge that Indonesia appears to be moving in the opposite direction: the House of Representatives is currently discussing draft legislation that could make CSR mandatory for all companies and could even go so far as to stipulate what percentage of its funds a company should spend on CSR. As stated above, we in the business community believe that strategic CSR is the best way of contributing to sustainable development and we will continue to work towards ensuring this practice becomes firmly established.
FOREWORD
Hariyadi B. Sukamdani
Chairman
APINDO
The initiative we are taking in APINDO to make CSR practice more strategic in nature is taking several forms that include participating in academic discussions and conducting in-depth research to identify best practices, which we then circulate to our members. These initiatives will hopefully move current CSR practices towards the ideal we are striving for.
This study is one of the initiatives we have taken to make CSR practices in Indonesia more strategic. In cooperation with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, which has been supporting the private sector in the field of sustainable development and inclusive business, we have conducted a study of CSR practices among our member companies. We also would like to thank Indonesia Business Links (IBL) for assisting with its expertise in the field assessment of this study. In addition, we would like to express a special thanks to the participating companies of the executed survey: PT. Adaro Indonesia, PT. Adis Dimension Footwear, PT. HM Sampoerna, Tbk., PT. Pacific Place Jakarta, PT. Sinar Mas Tbk. (downstream), PT. Trimitra Baterai Prakasa, as well as PT. Unilever Indonesia, Tbk.
The study provides some insight into the current state of CSR in Indonesia and identifies opportunities and challenges for continued development of strategic CSR practices with a specific focus on inclusive business models. More importantly, this publication aims to raise awareness among businesses about opportunities for implementing strategic CSR by providing specific examples of best practice.
I. Chapter 1 – ABOUT THIS STUDY
Objectives
Respondents
This study is a result of the close cooperation between the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and The Employers’ Association of Indonesia (APINDO). On behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), GIZ works extensively on corporate social responsibility (CSR) and inclusive business (IB) all over the world and explores how such approaches can best contribute to sustainable development.
In Indonesia, GIZ and APINDO have teamed up with the goal of promoting strategic CSR practices among companies based in the region. As one of the largest and most influential business associations in Indonesia, APINDO is perfectly placed to be an agent of change for the adoption of more strategic CSR practices in the country. It is hoped that this study marks a first step towards this goal.
Based on in-depth case studies of the CSR practices of seven APINDO member companies, this study aims to:
1. give insight into the current state of CSR in Indonesia and identify opportunities and challenges for the further development of strategic CSR practices with a specific focus on IB models;
2. raise awareness among APINDO and the broader business community in general of opportunities to implement strategic CSR, which at the end may lead to the discovery of IB opportunities and potential investments in education and workforce development;
3. provide concrete examples and best practices from APINDO member companies in order to inspire and promote strategic CSR and IB models in Indonesia.
Companies’ selection criteria is based on their availability and willingness to participate in the study and be registered as an APINDO member. The study is intended to gain key insights into and recommendations on the strategic implementation of CSR practiced by selected APINDO member companies.
Why corporate social responsibility is important
for companies and sustainable development
While definitions of CSR vary and evolve over time, the term usually describes responsible business conduct that considers the economic, environmental and social implications of its business. Though philanthropic activities by companies are not a new phenomenon, the concept of corporate social responsibility first emerged in the 1950s and 1960s. However, only since the turn of the century has there been increasing momentum for CSR, and companies are widely expected or even required by law to have CSR strategies in place.
The development of CSR has evolved together with the notion that business should not only be responsible but can also be a driving force in the development of societies and countries beyond purely economic considerations. This trend is clearly visible in global initiatives such as the United Nations Global Compact, whose members include many of the world’s biggest companies, and other similar clubs and formats such as the World Business Council for Sustainable Development. It is also becoming manifest in the prominent role some pioneer-ing multinational companies like Unilever are takpioneer-ing in the implementation of the 2030 Agenda for Sustainable Development.
The respondent companies (in alphabetical order):
PT. Adaro Indonesia Local Mining
PT. Adis Dimension Footwear Local Manufacturing
PT. HM Sampoerna, Tbk. MNC Retail
PT. Pacific Place Jakarta Local Property
PT. Sinar Mas Tbk. (downstream) Local Manufacturing
PT. Trimitra Baterai Prakasa Local Manufacturing
PT. Unilever Indonesia, Tbk. MNC Consumer Goods
CATEGORY
SECTOR
COMPANY NAME
“Corporate social responsibility is the continuing commitment by business to
behave ethically and contribute to economic development while improving the
quality of life of the workforce and their families as well as of the community
and society at large.”
Strategic corporate social responsibility
and inclusive business
CSR is a powerful catalyst for the contribution of the private sector to sustainable development. The CSR activities of companies can improve the livelihoods of the company’s workforce, the surrounding communities or even the broader region in which the company is active. The activities can include providing access to or improving education and health care, or improving infrastructure, environmental protection and alternative income opportunities, just to name a few. Companies can thereby directly contribute to the achievement of the United Nations Sustainable Development Goals (SDGs).
Next to the important role CSR can play in promoting sustainable development, companies have also realised that CSR can go beyond philanthropy and ‘responsibility’ and actually strengthen business performance. By implementing activities along their value chain that develop / retain the workforce or secure the stable and quality supply of relevant product components, companies can improve their own financial stability and competitiveness.
“There is a strong rationale for companies to act decisively to minimize their
negative development impacts and maximize the positive ones. The benefits
include value protection and value creation, managing costs and risks and
capturing opportunities.”
(Jane Nelson (2015): Business and the Sustainable Development Goals: Building Blocks for Success at Scale)
Despite its potential benefits for companies and society, CSR is often regarded as the purely philanthropic activities of a company that are detached from its core business operations. Companies may thus find themselves facing competing demands: while the public increasingly expects that CSR is credibly demonstrated, the company is also required by shareholders to maximise profits. When devising and implement-ing CSR activities, companies thus have to balance what is often seen as conflictimplement-ing priorities.
CSR 2.0
“Business creativity needs to be redirected to solving the world’s social and
environmental problems.”
Visser, 2011
CSR activities of companies have also received criticism for the lack of strategic approaches to programming and of scalability1. The activities often shift with changes in management and may reflect the current management’s preferences rather than build on the needs, identity and strong points of a company and its targeted beneficiaries.
Yet things are changing. All over the world companies are addressing these shortcomings by taking a more strategic approach to CSR that creates greater impact for society and greater value for the companies themselves.
An increasing number of companies are taking a more strategic approach to CSR. Often referred to as strategic CSR or CSR 2.0, this approach seeks to build on the core business of a company to devise activities that benefit communities and the business alike.
According to a widely cited concept by Wayne Visser2, CSR 2.0 needs to build on five principles: creativity; scalability; responsiveness (to the given situation of the company / product or stakeholder group); glocality (the adaptation of international concepts to local particulari-ties); and circularity (the ability to regenerate resources throughout the process). These five principles set high demands for CSR but thereby also ensure that it can sustainable and innovative and contribute to sustainable development. Above all, Visser’s vision of CSR 2.0 demands that companies are critical and thorough in their CSR work.
Scalability is an especially important aspect that has become crucial in development interventions. Visser demands that companies question not only their business models but also how their current operations may or maybe not be contributing to the achievement of stated goals and whether these goals are actually harmonised. In the long run, Visser envisions CSR 2.0 as going even further than the strategic level, taking a systemic approach that addresses inequalities and injustice on a global level, and being driven by regulation and consumer demand.
1 For a comprehensive summary of the critique of ‘traditional CSR’, see Visser, Wayne (2011). CSR 2.0: Transforming the Role of Business in
Society. Lien Centre for Social Innovation.
G20 Inclusive Business Framework
Inclusive businesses provide goods, services, and livelihoods on a commercially viable basis, either at scale or scalable, to
people living at the bottom of the [economic]pyramid (BOP), making them part of the value chain of companies’ core
business as suppliers, distributors, retailers, or customers. In addition to these commercially inclusive activities, businesses
may also pursue broader socially inclusive goals. Inclusive business should promote sustainable development in all its
dimensions: economic, social and environmental.
Among the practices companies employ to make their CSR activities more strategic is IB.
IB is a strategic business practice that creates added value for companies through the involvement of the lower income groups of the population pyramid (bottom of the pyramid (BOP)) into the company’s value chain as suppliers, employees, distributors or consumers. IB models are mutually beneficial, meaning that both the businesses and lower income population benefit from the business relationship.
One of the great strengths of IBs is that they are usually not dependent on philanthropic contributions but are rather, once up and running, commercially viable through their own revenue streams or cross-financing models.
IBs create positive impact for low-income communities3in various ways, which include:
1. empowering marginalised communities;
2. increasing household incomes;
3. raising productivity;
4. addressing basic needs, such as water, electricity, etc.
IB models have been developed in many different sectors, such as agriculture, tourism, ICT, health care or education4. In Indonesia, there is great potential for companies to put IB models into place, as the amount of population that can be considered as BOP is substantial. According to a study by the Asian Development Bank (ADB) and the Netherlands Development Organisation (SNV)5, about 119 million people in Indonesia (49% of the population) live on less than USD 2 per day. This means that there is not only a large market in the BOP, but also a large workforce.
3 UNDP (2008). Creating Value for All: Strategies for Doing Business with Poor.
First, a comprehensive review of standard literature on CSR, IB and related topics in Indonesia was conducted, including the regulatory framework, to give an overview of the status quo. This desk review was complimented by qualitative findings from the company surveys in terms of the drivers of their CSR activities. Consequently, the CSR activities of the participating companies were categorised and mapped along an activity spectrum to get an overview of the different approaches evident in CSR activities in which APINDO member companies are engaged. The activities were then examined with regard to the five success factors for strategic CSR adopted from the PBSP framework. In a third step, the IB activities were examined in detail to determine the opportunities and challenges facing participating companies in IB activities.
The study is based on a combination of desk study, semi-structured interviews and mapping.
The company interviews and analysis were guided by the Corporate Citizenship System & Process Management Framework by the Philippine Business for Social Progress (PBSP) Corporate Citizenship Center6. This tool was designed by the PBSP to assist companies in developing and implementing effective CSR programmes based on five essential elements: leadership, policy-setting, programme development, systems installation and measurement and reporting. For the purpose of this study, the framework was simplified to examine how the surveyed companies’ CSR programmes perform in these respective five elements.
6 Philippine Business for Social Progress (PBSP) Corporate Citizenship Center (2002): Corporate Citizenship System & Process Management
Framework.
Methodology
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II. Chapter 2 – DRIVERS OF CORPORATE
SOCIAL RESPONSIBILITY IN INDONESIA
“Corporate social responsibility is the continuing commitment by business to behave
ethically and contribute to economic development while improving the quality of life of
the workforce and their families as well as of the local community and society at large.”
World Business Council for Sustainable Development
This chapter aims to provide an overview of some of the drivers of CSR in Indonesia. The philanthropic practices of companies all over the archipelago are very different, partly due to the religious and cultural diversity in Indonesia. This diversity makes it difficult to achieve comparability between different companies to get a better idea of the state of CSR in Indonesia. Nevertheless three drivers considered important by the authors are listed below, though they are by no means exhaustive.
Much of the CSR activity undertaken in Indonesia is motivated by the notion of ‘giving something back to the community’. Traditionally, companies help people in the form of donations given at national celebrations and religious events, as well as in the aftermath of natural disasters to repair and develop public and social facilities. Therefore, up to now, companies often still understand CSR activities as a compa-ny’s moral obligation to the community.
At the same time, government regulation has become a central driver for the adoption and implementation of CSR activities in recent years. According to Law No. 40/2007 on Limited Company, whose activities are related to natural resources, these companies are required to demonstrate social and environmental responsibility. Most of them comply with this requirement by spending around 3% of the companies’ annual profit on CSR activities. With the enactment of this law, Indonesia was the first country to introduce mandatory social responsibility legislation.
Tradition and cultural expectation
Law No. 40/2007 on Limited Company
Chapter V
Social and Environmental Responsibility
Article 74
(1) Companies operating on and/or related to natural resources are obligated to carry out Social and Environmental Responsibilities.
(2) Social and Environmental Responsibilities as prescribed in Section (1) refers to the obligation of the corporation as budgeted and
calculated as borne by the corporation and implemented through decency and properness considerations.
(3) Corporations that deny the obligation as prescribed in Section (1) are liable to sanction in accordance to the law.
(4) Further conditions on Social and Environmental Responsibilities are stipulated through Government Regulation.
Today, there are at least seven national laws and local regulations related to CSR that are both regulatory and redistributive in nature. The government strives to encourage companies to actively participate in social activities with the issuance of these regulations. While this is a great achievement in terms of creating awareness on CSR, the regulatory approach of Indonesia also has its drawbacks.
However, these rules create confusion among implementers in the field. Differences in understanding CSR have led to the varying implementation of CSR in each region, as well as the development of local regulations that vary regarding CSR. This lack of clarity in regulations has become an obstacle for the companies to carry out CSR programmes. Companies operating in the regions must seek approval from the local government to carry out CSR activities by holding annual meetings with governmental agencies. As a result, many companies conduct CSR activities just to meet current regulations, but they do not risk being innovative in their programming. Such a mandatory approach to CSR is input-focused (amount of investment) rather than focusing on the outputs and impact of CSR programmes to evaluate if they comply with regulation.
International corporate social responsibility guidelines
A number of global standards also bear relevance for Indonesia and can drive the adoption and improvement of CSR activities in the country. One of the most influential standards was devised by the International Organization for Standardization (ISO), which published ISO 26000 in 2010 as a guide for organisations or companies to operate in a socially responsible manner.
1) Organizational Governance: This core subject refers to how your business makes and implements strategic decisions;
2) Human Rights: This core subject is based on the Universal Declaration of Human Rights (adopted by the UN General Assembly in 1948);
3) Labor Practices: For this core subject, the ISO 26000 refers to the ILO (International Labor Organization), the international governing body for labor practices;
4) The Environment: The environmental principles of this core subject are: Environmental responsibility; The precautionary approach; Environmental risk management; and The polluter pays;
5) Fair Operating Practices: This core subject focuses on the ethical conduct in a business’s dealing with its stakeholders; 6) Consumer Issues: This core subject deals with your business’s responsibility for minimizing risks in the use of your service or product;
7) Community Involvement and Development: The ISO 26000 states that “Community involvement and community development are both integral parts of sustainable development”.
[image:18.1191.91.509.169.567.2](http://www.sustainability4success.com/iso-26000-II.html) Figure 2. ISO 26000 Core Subjects
The ISO 26000 standard mainly provides guidance on the principles of CSR practices and the contribution of companies to sustainable development. Due to the vast global differences in company culture and ethics, ISO does not, however, provide certification for the 26000 standard. There are seven core subjects covered by ISO 26000, which are: organisational governance, human rights, labour practice, environment, fair operating practices, consumer issues, and community involvement & development.
The standard thus promotes CSR activities which are not only aiming at community development or creating broader value for society, but also internal aspects of the company and the way it runs its operations.
Another set of guidelines commonly used in the corporate sector with a particular focus on CSR reporting and sustainability practices is the Sustainability Reporting Guidelines published by the Global Reporting Initiative. The fourth generation of these Sustainability Reporting Guidelines was released in May 2013.7
Another influential voice in the CSR space is the United Nations Global Compact and its Global Compact Principles, which sets 10 basic principles for companies on doing CSR, including elements relating to human rights, labour, environment and anti-corruption. United Nations Global Compact chapters exist in many countries worldwide. The Global Compact chapter in Indonesia counts 117 signatories. The OECD Guidelines on Responsible Business Conduct also serves as a framework reference, though MNEs generally have more elaborate CSR programmes in place already.
7 Further information on the Global Reporting Initiative and a range of useful tools for interested companies can be found at
III. Chapter 3 – Analysis of the sample:
General findings
This chapter presents an overview of the CSR activities of the surveyed companies and describes the factors relevant to the success of their CSR programmes.
The seven companies surveyed for this study have a total of 63 CSR activities in place. These activities are of a very different nature, from workplace improvement measures to education opportunities for employees or income opportunities for surrounding communities. Rather than mapping the activities by sector or the relevant target groups, the study examined how they relate to the core business of the company and how the companies value these activities and understand their role in facilitating them.
The CSR activities were plotted along the ‘continuum of social investment’ adapted from the European Venture Philanthropy Association (EVPA). Figure 3 below illustrates the spectrum of motivation of CSR activities, from purely philanthropic to purely commercial. This exercise sheds light on the motivation of the participating companies in operating their CSR programmes and helps identify IB practices and potentials within the 63 activities.
[image:20.1191.30.559.412.669.2]Activity spectrum
Figure 3. CSR activity spectrum of the surveyed companies, adapted from the European Venture Philanthropy Association’s continuum of social investment
Purely Philanthropic
Philanthropy / Charity
Non-financial mission
Impact only
Impact first
Finance first
Inclusive Business
activities
5
14
44
Social mission with min.
financial return
Market driven with social
and / or environmental
objectives
Profit driven
Social Driven
Socially Responsible
Traditional Business
“We cannot run a good business if the surrounding community is poor and marginalised.”
Sancoyo Antarikso, External Relations Director & Corporate Secretary, PT. Unilever Indonesia Tbk and Board of Founders of Indonesia’s Global Compact Network
Out of the 63 activities recorded during the interviews, 44 are considered purely philanthropically motivated, whereas 19 activities are considered more market-driven and as IBs or activities with IB potential. The IB activities will be discussed in more depth in the following chapter.
All of the companies surveyed for this study carry out CSR activities and understand the basic concept of CSR. Many of the activities undertaken are considered donations by management that are necessary to gain public legitimacy or comply with existing regulations.
The practice of CSR in some companies has shifted from a means to improve corporate image to activities that are more strategic and impact-focused. Often, these new activity fields are more closely related to the company‘s core business. These changes have often been accompanied by the realisation that CSR is not just an answer to society’s demands for business accountability, but that CSR activities can also benefit the company commercially.
During the interviews, companies raised a number of benefits of CSR programmes, such as workforce development and retainment or supply chain reliability that make the business case for CSR. Below are a number of examples of such strategic CSR activities, clustered into two thematic sections.
Becoming more strategic
Companies can make their CSR more strategic by building on the strengths and comparative advantages of the company and its core business activities.
One interesting example from the surveyed companies is PT. Pacific Place Jakarta. The company realised that in reaching its CRS goal of supporting SMEs in Indonesia, it can make use of its sales structures by utilising unused mall space to give exposure to promising projects from SMEs by organising a one-month exhibition.
Another example is PT. Unilever Indonesia, which focused a CSR activity on enhancing one of its most important sales channels, traditional
markets.
As part of the company’s commitment to improving the health and welfare standards of the community, the company initiated the
programme Pasar Sehat Berdaya, which focus on the development of traditional markets in 2010. The objective of this programme is
to promote traditional markets that are healthy, clean and hygienic through self-reliant marketplace communities by advocating Pola
Hidup Bersih dan Sehat (PHBS - Clean and Healthy Lifestyle) to transform the behaviour of merchants, management and customers
of the market.
By 2015, the company facilitated 35 traditional markets in the cities of Medan, Jakarta, Bekasi, Yogyakarta, Nganjuk, Gresik, Sidoarjo,
Probolinggo, Makassar and Denpasar. The programme also promoted a PHBS education programme and provided business
managerial training to 13,684 market traders facilitated by 2,280 market traders who were trained as programme champions through
a training-of-trainers model.
Despite the obvious benefits for the community, the company was also interested in maintaining its competitive edge in the traditional
market, as 19% of sales are made through the traditional market.
Activity:
Target object: Company name: Activity description:
Small and medium-sized enterprises PT. Pacific Place Jakarta
Gerai untuk UKM
One of the company’s missions is to empower SMEs. The company cooperates with two
selected NGOs, Dompet Dhuafa and Citra Tenun Indonesia, to exhibit and market SME
products that meet the specifications for the middle-high economy market. The selection of
NGOs is done to ensure that the products marketed correspond to the desired quality of the
company. The exhibition lasted for one month at the Pacific Place mall. The location used is
an area that has not previously had a tenant.
The benefit for SMEs is very clear as their products gained exposure in the middle-high market that is often difficult to access. For
PT. Pacific Place Jakarta, the initiative not only improved corporate image but made use of the empty rental space that would have
been unutilised. Moreover, the initiative made the mall’s range for customers more diverse and innovative.
Activity:
Target object: Company name: Activity description:Vendors in traditional markets PT. Unilever Indonesia, Tbk.
Pasar Sehat Berdaya
Photo: PT
. P
acific Place J
akar
Sampoerna also has targeted CSR activities in its sales channels:
Another step in achieving more strategic CSR consists of investing in the company’s workforce. PT. Adaro Indonesia, for example, has called into life a workforce development programme that recruits and trains mechanics for the company.
Developing the workforce
Activity:
Target object: Company name: Activity description:Community PT. Adaro Indonesia
SIS Training Programme
Sampoerna Retail Community (SRC) is a partnership programme aimed at potential retail outlets which have been selected as business
partners for PT. HM Sampoerna, Tbk. SRC is one of the company’s flagship programmes to engage in business partnerships with
the community and aims to combine promotional activities with the distribution of its products. Here the company is aiming to
strengthen their business partners’ capacity through various capacity-building activities to increase their business skills, such as
providing retail marketing consultations as well as organising financial literacy education courses in collaboration with the company’s
banking partners. To support their retailers on the marketing side, the company assists them in changing their current traditional
outlets into semi-modern retail outlets by providing a set-up including branded table sets and chairs to transform a specific space in
the outlet into an entertainment corner to attract more customers and increase time spent at the outlet. To encourage their customers
to spend more time in the outlet, the owners usually add simple entertainment means such as a TV or chess sets.
Activity:
Target object: Company name: Activity description:
Retailer
PT. HM Sampoerna, Tbk.
Sampoerna Retail Community
In order to ensure a consistent supply of trained and skilled workers and to involve the local labour market, the company collaborated
with one of its subsidiary companies to launch a training programme entitled Operator Preparation and Mechanics Preparation
Programme. This programme aims to improve community welfare by providing education opportunities that are tailored to the
companies’ skill needs. The programme began in 2008 and has trained and recruited more than 2,000 operators and mechanics from
the peripheral area of the mining site. Each year, more than 200 individuals graduate from the programme and are recruited into
employment with the company. The training period ranges from 6 months to 12 months, consisting of both theoretical study and
on-the-job training.
While this activity provides opportunities for local communities to gain valuable
education and skills for the labour market, it also helps the company to secure a labour
supply with the adequate skill sets.
Photo: PT
. Adar
A similar programme that focuses on training the local workforce in remote areas was called into life by PT. Sinar Mas Tbk.
Another example is the Center for Occupational Training (COT) programme of PT. Adis Dimension Footwear that offers training that is nationally recognised and certified, thereby providing local people with opportunities and training that are valuable even beyond the compa-ny’s labour needs.
Recognising the lack of trained and skilled labour in the footwear industry, the company responded by launching the Center for
Occupational Training (COT) programme. This one-month competence-based training provides basic and comprehensive knowledge
on shoe-making techniques, including cutting, preparation and assembly. The training programme has been free-of-charge since
2008, and participants who manage to finish the programme are given national certification.
The company does not obligate participants to work for the company. However, should they decide to apply for employment,
they are given priority. The result is that the company finds it easier to recruit skilled workers that are up to their standards so that
internal on-the-job training is no longer required.
Companies in the pioneer operation of the factory in remote areas found it difficult to attract local employees who have higher levels
of education. The company brought employees from outside the area, but this resulted in a high turnover rate among experienced
employees. To solve this problem, the company works closely with a local university by giving scholarships to students based on a
certain arrangement. After graduation, the students are mandated to work for the company for a certain period of time. Now, for
facilities in Tarjun, Kalimantan, more than 75% of employees are locals with a greater level of company loyalty, and the rate of
turnover has decreased sharply, resulting in lower cost.
Activity:
Target object: Company name: Activity description:
Community
PT. Sinar Mas Tbk. – Downstream
Scholarship
Activity:
Target object: Company name: Activity description:Community
PT. Adis Dimension Footwear
While identifying opportunities for strategic CSR activities is important, the internal CSR management and operational procedures are also crucial for CSR activities to become successful in achieving the targeted impact.
Based on the PBSP’s Corporate Citizenship System & Process Management Framework (see p. 9) the participating companies were analysed according to their performance in the respective five elements conducive to the success of CSR programmes. The best practices of these companies are detailed below.
Leadership is the key driver for the company to bring new and innovative CSR activities to life. The implementation of strategic CSR requires a strong commitment to these activities by senior management and benefits from CSR ‘champions’ that serve as a reference point and role model for the activities within the company. Effective leadership in strategic CSR includes the integration of activities within the core business procedures of the company and the communication of CSR as such. Effective leadership also translates into the ownership of CSR activities by management, thus establishing accountability in achieving reaching CSR targets.
Five success factors
1. Leadership
Activity:
Company name: Activity description:PT. Trimitra Baterai Prakasa
Workers with Disabilities
As one of the company’s efforts to provide equal employment opportunities for people with
disabilities, especially for the deaf and mute community, the company is working with an
orphanage foundation. The project is being implemented under the supervision of the
Social Department since 2007 and has been supported by the Jakarta local authorities. At the
beginning, the project was based on charitable motives. However, with time, the company
wanted to increase their contribution to creating jobs for disabled persons. PT. Trimitra Baterai Prakasa provides the same employment
conditions to their deaf and mute employees as their other employees, which means full-time employment and equal employment
rights and expectations. However, due to safety reasons, employees with disabilities are provided with different coloured uniforms
and are usually placed at working stations with minimum working risks. At the moment there are more than 80 people with disabilities
employed out of a total of 1,200 employees.
The company benefits from employing people with disabilities since they have proven to be more meticulous in their tasks and show
high levels of motivation, productivity and loyalty at work. The disabled employees benefit from receiving a stable income and gaining
confidence and self-esteem as a result of being treated equally by the company and being able to make an independent living.
Disabled employees in the production area
Photo: PT
. T
“If you want to develop a good business, the first thing to do is your business’s
compliance to all regulations.”
Harijanto, Ketua Ketenagakerjaan, Dewan Pimpinan Nasional APINDO Some aspects of CSR leadership are:
1. Members of senior management act as role models and are exemplary in upholding the principles and values of the company.
2. Supports and is committed to the goals and objectives of CSR/IB programmes and ensures programmes are coherent.
3. Company management takes full responsibility for the positive and negative impacts of policies and practices of CSR/IB.
Most respondents from the survey reported that their CEOs have strong commitment to CSR and that CSR initiatives are embedded throughout the organisation. One of the companies mentioned that the establishment of the company was related to health concerns in the community, and that a value created by the founder is embedded in the company and has become company culture.
Strong leadership may also come from the need to comply with national laws, international regulations, a global code of conduct and rising stakeholder expectations, and these forces also enable them to translate CSR principles and policies into concrete action.
One example where strong commitment enables the company to make sustainable operation is found in PT. Adis Dimension Footwear. The owner of PT. Adis Dimension Footwear believes that compliance in every aspect of business operation is fundamental in practicing social responsibility and is therefore the primary key for the sustainability of the company. Compliance is another word for being responsible, that is responsibility towards all of your business stakeholders. Without considering compliance, CSR programmes are only cosmetic and for short-term purposes. Based on this belief, PT. Adis Dimension Footwear created several CSR programmes relating to compliance issues, such as labour and the environment. As a result, PT. Adis Dimension Footwear has been awarded several times for its involvement in the environment and has been nominated as the workers’ favourite company in footwear industry.
The presence of clear, focused and written policy is an important element in the implementation of the CSR/IB programme and becomes an integral part of the business. This is done so that the activities undertaken become more relevant and fundamental to the company’s main business activities.
Effective policies have at least the following elements:
1. The policy is appropriate and consistent with the principles of the company’s overall business.
2. The policy must be clear, focused and in writing so that it can be used as a reference in the implementation of the programme.
3. The policy should be communicated and distributed to all stakeholders.
The best example for implementing CSR in companies is through the code of conduct or company regulations. Company regulations are created so that policy becomes easier to understand and can be easily communicated to stakeholders. For example, PT. Adaro Indonesia has prescribed ‘iMore’ as the integral company values: integrity - meritocracy - openness - respect - excellence. iMore is communicated in various ways through the media (electronic and non-electronic), at the onset of employment and during other engagements, so that it has now become the guideline for employees in all business activities.
PT. HM Sampoerna, Tbk, on the other hand, has its ‘Three Hands Philosophy’ in place, aiming at a harmonious relationship between the company, business partners and the community. This philosophy, which underpins everything the company does, represents PT. HM Sampoerna, Tbk.’s commitment to meeting or exceeding the expectations of their three most important stakeholder groups – adult smokers, employees and business partners, and society at large.
PT. Unilever Indonesia, Tbk. Indonesia established its CSR policy based on four pillars of their programme, namely the environment, nutrition, hygiene and sustainable agriculture.
Devising coherent CSR programmes in which different activities have positive synergies is another key element for the success of strategic CSR. Developing a vision for the overall CSR programme of a company that goes beyond the activity level and strives for systemic change helps make activities more impactful and beneficial both for the company and the target population. Moreover, clearly defined goals help manage expectations among all stakeholders. Successful programme development should include:
1. Engaging stakeholders in the development of the programme so as to identify their needs and establish priorities. Companies certainly cannot meet the needs of all stakeholders, so this prioritisation is a requirement.
2. Assessing stakeholders and looking at business processes in the enterprise value chain so that the programme can be designed with clear targets and objectives.
Some of the surveyed companies place the CSR function within the human resources department or in the external relation division. This demonstrates that many CSR activities or initiatives are related to managing workplace concerns. This is the case with PT. Adaro Indonesia (Mandatory Basic Training for HSE), PT. Adis Dimension Footwear (school programme and scholarships) and PT. HM Sampoerna (Unlimit Yourself Employee Program). In other cases, companies collaborate with development organisations, foundations or universities, or hire professional development implementers or experts to implement projects (e.g. community development projects). One example of such practice is the case of PT. HM Sampoerna establishing partnerships with NGOs/foundations to increase their administrative skills and organisational capabilities and to upgrade them to be eligible partners according to the internal company standards. Another example is conducted by Unilever Indonesia on engaging experts from reputable universities to assist farmers (such as soybean farmers) in increasing their production.
To ensure that implementation can proceed smoothly, some systems and components must be put in place. These components include:
1. System management
This involves the designation of an organisational structure within the company to carry out CSR/IB activities so that the functions and responsibilities become clear. Management should also provide support for the implementation of CSR/IB activities.
2. System communication
Communication is important to safeguard the interests of every stakeholder. A good communication system can also be a way to get feedback and provide advocacy among stakeholders.
3. Financial system
Good documentation of financial transactions helps to ensure financial transparency among stakeholders. Companies can also allocate budgets carefully so that the company can support programmes with an adequate budget.
4. System monitoring and evaluation
Evaluation of the programme should be done periodically in order to assess results vis-à-vis the indicators and goals of the company.
Based on the interviews conducted, the systems are highly varied among companies, although the functions to implement the programmes as such are well defined and structured. Some companies embedded the function within HR departments or external affairs departments, such as PT. Adis Dimension Footwear. In this case, designated personnel are in place to take the responsibility for the operational aspects of the activities. Companies with separate CSR units are more focused, gain sufficient budgetary support, and prove to have better commu-nication between management and the beneficiaries or stakeholders involved.
Some companies also expressed that the activities still feel ‘ad-hoc’ and do not have clear guidelines. To address this, the company may wish to conduct consultation sessions with involved stakeholders (employees or the community, for example), or leaders of the community to identify strategic issues that can form the basis of the CSR agenda.
Companies have in general installed good systems to provide information on its programmes and projects (such as newsletters and other media), communicate CSR initiatives to internal and external stakeholders, and hold interactive sessions to disseminate information as well as gather feedback. Companies with a large workforce, such as manufacturing companies, inform their workers through bulletin boards, which proves so far to be effective. One example of this is PT. Adis Dimension Footwear, which produces internal employee bulletins informing everyone in the company in detail on their CSR activities.
Finally, adequate monitoring and evaluation is essential to assess and further develop successful CSR programmes and make them even more strategic in the future by correcting prior shortcomings or erroneous assumptions. This involves:
1. Providing an objective assessment of the programme or initiative that is implemented;
2. Providing an overview of the impact resulting from the programme, showing that transactions are carried out both for the company and the stakeholders involved or affected.
3. The result representing a key component for the development of the next programme because it provides the necessary inputs for the improvement and development of the next programme.
4. Increasing public and stakeholder awareness, thus triggering an understanding among the stakeholders.
With regard to programme evaluation and monitoring, most of the companies are able to track down their performance by conducting monitoring and evaluation exercises such as:
• periodic review of programmes;
• consultation with internal/external stakeholders through different kinds of surveys or modes; and
• documenting best practices through success stories and testimonials.
The companies view this as particularly vital to monitor CSR activities and ensure that the programmes achieve the target in a timely manner and within the budget so that the companies are able to report on both regularly to management and related stakeholders and improve the programmes.
Some companies in this study, such as PT. Unilever Indonesia, Tbk. and PT. Adaro Indonesia, have created sustainability reports that appear at regular intervals and report in ways that are comparable over time and allow for the tracking of progress. Another example carried out by the company is newsletter production. PT. Adis Dimension Footwear created a magazine-like newsletter describing its numerous CSR activities throughout the year, which is published periodically. PT. Adis Dimension Footwear said that this magazine is very effective for conveying information about the company and engaging stakeholders, such as the government.
Several companies can use their available resources to conduct several assessment programmes in their project to measure the impact of their activities. The kind of report a company may produce depends on their needs and CSR accomplishments. However, emerging trends in corporate reporting require a triple-bottom-line approach, which includes consideration of the economic, social and environmental aspects of business operation. Regular reporting to management is available in all companies to monitor the progress of the programme.
IV. Chapter 4 – INCLUSIVE BUSINESS
AS STRATEGIC CORPORATE SOCIAL
RESPONSIBILITY
Inclusive business case studies
The CSR activities carried out by the companies surveyed demonstrate the potential of IB to provide benefits not only to the community but also to the companies. The study found there are some CSR activities along the value chains of the companies that can be categorised as IB practices.
PT. Trimitra Baterai Prakasa, for example, applied the IB concept to its surrounding communities to procure supporting equipment for the company taking into account cost and availability. Therefore, the company regards this practice as a regular business activity that also has a large social impact on the community by providing additional income opportunities. The company’s CSR activities focus largely on the employment of the community members, particularly the disadvantaged.
The cornerstone of the company’s actions is set forth in the company’s mission, which is empowering people, particularly the underprivi-leged, as its corporate response to social responsibility. Initially planned as pilot project, the company tried to involve the local community affected by the activities of the company into its CSR activities along the company’s supply chain. After proving that the activity brought about positive results not only for the community but also for the company due to lower costs or better productivity levels, the company was then able to design and implement IB practices.
In order to obtain a sustainable supply and high quality black soybeans, PT.
Unilever Indonesia, Tbk. collaborated with Gadjah Mada University (UGM) in
2000 to engage farmers in planting black soybeans. Black soybeans are less
commonly grown than the yellow variety. After thorough research, the malika
soybean variety was introduced to farmers in collaboration with UGM. The
distribution of seed was free, and PT. Unilever Indonesia, Tbk. provided training, consultation and supervision to farmers. As a
result, soybean farmers were able to increase their production from 1.5 tonnes/ha to 1.9 tonnes/ha, which resulted in additional
income for farmers. Farmers also received market guarantees from PT. Unilever Indonesia, Tbk. to buy the black soybeans. In
addition, the farmers also gained knowledge and skills in sustainable agriculture practices. The programme covered more than 50
kabupaten in Java and has trained more than 9,000 farmers, including 2,000 women.
Activity:
Target object: Company name: Activity description:
Neighbouring local community PT. Trimitra Baterai Prakasa
Water Bath Supply
The company needs a monthly replacement for water bath containers in the factory. The baths are made from fibreglass material that
can be moulded easily. The company noticed that there were individuals with skills in melding fibreglass in the surrounding
neighbourhood.
The company provided the specifications and supervision in the production process.
Along with the process, the company educated more people and established
coopera-tion through the karang taruna (youth local organisacoopera-tion). The monthly turnover for
the water bath supply is between IDR 200 – 400 million.
Advantages for the company:
• reliable supply as PT. Trimitra Baterai Prakasa also monitors the production;
• cost savings through the low cost of transport.
Activity:
Target object: Company name: Activity description:Soybean farmers
PT. Unilever Indonesia, Tbk.
Soybean Farmer Empowerment
Quality assurance training for the community in the Cilincing area in water bath production
Photo: PT
. T
rimitra Baterai Prakasa
Photo: PT
. Unile
Activity:
Target object: Company name: Activity description:Rubber Farmer PT. Adaro Indonesia
Rubber Farmer Empowerment
Mining companies are obligated to conduct reclamations of post-mining areas. Reclamation
is a part of the core business operations for a responsible mining company.
PT. Adaro Indonesia realises that in the near future the exploited mining fields will have to
be reforested. One commodity that would be suitable for the area is the rubber plant. In line
with the mission of the company to develop the community’s economy, the company
launched a programme for rubber farming. The company provides training and education on strategic rubber farming for optimal
yield. The result is that 700 hectares of fallow land have now been reclaimed for rubber farming, involving 7,500 heads of household.
Combining a business operation (reclamation of a post-mining area) with the company’s mission to develop the economy of the
surrounding community is another example of an IB approach.
Activity:
Target object: Company name: Activity description:
Food vendors
PT. Adis Dimension Footwear
Providing Space for Food Vendors
One of the problems the company faces is a logistical matter, namely providing lunch for its thousands of workers. Allowing workers
to leave the premises to find meals would create a bigger problem: there is no guarantee the food is hygienic and it may compromise
worker attendance as their work time could be reduced through lateness or food-borne illness. To respond to this issue, the company
launched a programme by providing space in the peripheral area of the company for food hawkers to sell their goods. The company
provides training in food handling, food safety and waste management.
As a result, there is currently a waiting list of
hawkers waiting to open their stations in this
area because it is much more profitable and
safe. The company also benefits from a
greater degree of discipline and a controlled
quality of food available to its workers.
Photo: PT
. Adis Dimension F
ootw
ear
Photo: PT
. Adar
Activity:
Target object: Company name: Activity description:Employees
PT. Adis Dimension Footwear
Koperasi Adis
Workers often times need extra funds to meet personal needs, such as children’s tuition and
other expenses. It is clear that the company will not be able to meet all its workers’ needs,
especially due to its large workforce. To respond to this issue, the company provided initial
capital and formed a cooperative body that functions as a savings and loan facility for the
workers. It is also meant to improve the welfare of the workers. The cooperative also performs
functions other than the designated savings and loan function, such as Adis Mart, an outlet where members can shop using an
integrated card system. The Adis Mart also offers courier and online payment services, which enables employees to pay their utility
bills, e.g. for electricity, and uses a state-of-the-art IT system. The system was developed internally based on open-source models and
enables workers to further increase the quality of their work. Presently, Adis Mart is operating on IDR 5 billion of revenue per month.
Because of the success of its cooperative model, the company regularly receives visits from various third parties (companies,
government, cooperatives, universities and international visitors) for peer-to-peer learning and knowledge exchange.
Photo: PT
. Adis Dimension F
ootw
Opportunities
The study revealed that there are a number of benefits derived from the implementation of IB, namely:
1. Companies can reduce procurement costs of goods and raw materials, both in terms of efficiency and continuity. An example is PT. Trimitra Baterai Prakasa and its water bath supply programme. Companies do not just get a cheaper price; they are also assured of the quality and continuous supply of the necessary equipment every month.
2. Workforce issues, particularly the inability to find qualified employees, are a problem that most companies faced. Companies that provide training to the underprivileged, particularly the local population, can produce employees with improved skills and productivity as well as a high level of company loyalty. This is proven by the opening of training centres by PT. Adis Dimension Footwear to train locals in sewing and shoe-making. This allows PT. Adis Dimension Footwear to solve workforce problems and attract employees with the required skills and a high level of company loyalty, thus increasing productivity.
3. Supply chain/security of supply can be an obstacle for companies especially relating to agricultural products. Community participation in the supply chain can be a solution to this problem. A successful example is PT. Unilever Indonesia, Tbk. with its empowerment of black soybean farmers on the island of Java.
Challenges
“We are helping our business partners
improve their capabilities.”
Sancoyo Antarikso, External Relations Director & Corporate Secretary, PT. Unilever Indonesia Tbk and Board of Founders of Indonesia’s
Global Compact Network The problems faced in launching an inclusive activity posed a challenge to the companies. These problems include:
1. Lack of adequate skills and knowledge in the BOP. This makes it challeng-ing for companies to include the low-income population in the company’s value chain.
2. The information gap and the lack of understanding in the company of IB. Companies report that they are not able to implement IB because they usually do not deal directly with disadvantaged communities.
3. Lack of a regulatory framework. The lack of clear regulations regarding the implementation of CSR becomes an obstacle for companies to innovate IB strategies. Companies operating mainly around natural resources, for example, require guidance as to which CSR activities are
approved or not approved, so that they are able to annually budget for such activities due to the large amount of resources needed for CSR, both material and immaterial.
4. Limited access to finance. Because IB is still considered as a social activity or as activities with hard-to-measure risks by financial institutions in Indonesia, and because people are still deemed ‘not bankable’, financial institutions disburse loans less freely unless companies are able to substantiate the loans with assets and reputation as collateral. For this reason, PT. Adis Dimension Footwear allocated its own money for the start-up capital of its cooperatives.
Inclusive business potential
The analysis in the previous chapter shows that IB activities have been carried out by companies participating in this study. Each corpora-tion, aware or unaware, has conducted IB to a certain degree in their operation.
The core problem among companies is the comprehension of IB in itself. Some companies are unaware that some of their activities are indeed IB practices, for example, the water batch supply programme launched by one of the respondent companies. At first the programme was viewed as a regular business programme. The company initially did not realise that the programme has social impacts.
(1) There is still a perception among the business community as well as regulators in Indonesia that CSR is only related to social motives. The goal of the majority of CSR programmes being implemented by respondent companies is to empower their social stakeholders. In implementation, the majority of companies use an approach that does not consider the long-term sustainability of activities, both from the private sector’s side (e.g. implementing CSR activities as part of the company’s ‘social cost’, burden or obligation rather than as an investment) and from the side of the community targeted by the CSR (e.g. short-term project with low impact).
(2) From this study, there is a potential for Indonesian companies to make their CSR activities more strategic, incorporate sustainability and also create mutual benefits for the companies as well as beneficiaries. Using the inclusivity principle in the supply chains of companies as part of their CSR activities is one way of implementing strategic CSR. This practice, which is called IB, is believed to, as demonstrated in this study, increase the effectiveness of the private sector’s role in fostering development in Indonesia.
(3) The success of shifting companies’ CSR activities from philanthropic or charitable to strategic is determined by the leadership of companies and their management. Their strong commitments to IB should be clearly communicated to company stakeholders and translated by their staff into real action, including the development of systems and mechanisms to manage it. To motivate business leaders to develop IB models, strong evidence should be presented that shows the social benefits, such as obtaining the social license to operate, and the economic benefits, including maximising profits and/or minimising risks (e.g. strengthening value chains, expanding the labour pool, or developing new markets).
(4) IB activities could be practiced by any kind of company in Indonesia, regardless of their size (small, medium or large), type of industry (garment, consumer goods, manufacturing, mining, etc.) and ownership (national, multinational, family-owned or state-owned), as long as they can map the opportunities to include the BOP or vulnerable and poor people into their supply and/or value chains, adapt their business process to allow the BOP to take part in supply or value chains, and leverage the strengths of the BOP to ensure they meet the standards required by the Industry.
(5) Another success factor in practicing IB is understanding the challenges to come (such as information gaps, limited skills and knowledge, lack of access to financial capital, lack of infrastructure facilities and ineffective regulatory frameworks) and knowing how to mitigate those challenges. To overcome the challenges, the company can collaborate with other businesses (or business associations) or sometimes with non-traditional partners, such as non-governmental organisations (NGOs) and public service providers. Through such collaborations, companies can gain access to complementary capabilities and pools of resources to overcome those challenges.
V. Chapter 5 – CONCLUSION
Lastly, this study proposes seven recommendations for APINDO member companies as well as other companies in Indonesia to make their CSR more strategic:
1. Participate in regular exchange formats with other APINDO member companies to discuss best practices and challenges in CSR and identify synergies between companies.
2. Promote ownership of CSR activities by employees and management through better information materials, site visits and events.
3. Consider investing in Human Resource Development as part of their strategic CSR policy and combine internal Human Resource Development with outreach and training programmes for the community (ideally as formal education programmes instead of short-term informal trainings).
4. View CSR as a long-term activity and develop a vision for CSR programming that builds on longer timeframes to create more sustainable programmes.
5. Take a value-chain approach to CSR by analysing potentials for CSR activities along the whole value chain of the company.
6. Identify and develop IB potentials in value chains and document findings to work as champions to inspire other companies.
7. Align CSR activities with SDGs to facilitate the evaluation and tracking of shared impact on a global scale.
Simple steps to review your own CSR strategy
Goals of the assessment tool
This assessment tool uses three simple steps to identify strategic CSR potential within your business operations. Specifically, it helps you to:
1. review the main success factors for CSR in your company (status quo);
2. identify measures to make your CSR activities more strategic (in the future);
3. identify potential for inclusive business models.
Three simple steps
Step-by-step assessment guide
Step 1: Analyse the current status of your CSR strategy
• Background reading: Chapter 3 - Success factors
• Use the table in Guiding questions for five success factors to draw up a profile of your existing CSR strategy and its relative performance by answering the questions in the table and then, based on those answers, rate yourself on a scale of 1 (lowest level for that indicator) to 5 (highest level for that indicator).
Where do your company’s strengths
lie in terms of strategic CSR? What
are the factors in your success?
Which of them could you improve
and which would you like to
improve?
Identify whether your current CSR
measures can be replaced or
complemented by an inclusive
business model?
VI. Chapter 6 – CSR Assessment Tool
Step
01
Analyse the current status of your
CSR
Step
02
Draw a spider graph
Step
03
Identify action needed to make
improvements
How would you rate your own
performance with regards to the
success factors for strategic CSR as
Step 2: Draw a spider graph
• First, transfer your own rating from the exercise in Step 1 to the spider graph below, marking the scores you would give yourself for each of the five dimensions.
• Second, take a moment to think about the dimensions in which you rate your performance as very high. What elements, people, activities or other factors make this success possible and how does it impact your business?
• Finally, assess those dimensions where there is room for improvement and try to draft some ideas about how they could be improved (see also Step 3).
Example of a spider graph
Leadership
1
2
3
4
5
Measurement
& reporting
System
installment
Program
development
Policy-setting
Spider graphic exercise
NOTES:
1
2
3
4
5
Leadership
Measurement
& reporting
System
installment
Program
d
