Building stakeholders' trust<\/p>\n
Sudibyo M. Wiradji, The Jakarta Post\/Jakarta<\/p>\n
There is a growing awareness among local companies that
\nCorporate Social Responsibility (CSR) has become an important
\nbusiness concept to maintain long-term profitability.<\/p>\n
However, the lack of a clear definition of the CSR concept
\nmakes it difficult to apply.<\/p>\n
A company may claim that it is being socially responsible if
\nit takes environmental issues into consideration or if it is
\nactively engaged in charity and educational sponsorship programs,
\neven if it is also involved in illegal activities.<\/p>\n
CSR has many definitions. The World Business Council for
\nSustainable Development defines CSR as the commitment of a
\ncompany to behave ethically while improving the quality of life
\nof the workforce and their families as well as of the local
\ncommunity and the society at large.<\/p>\n
According to the United States-Asia Environmental Partnership
\n(US-AEP), CSR is a guidance system or internal standard for
\ncorporate behavior that incorporates superior ethical
\nperformances in the area of environment, society\/human rights and
\neconomy into a company's policies, programs and decision-making
\nprocesses.<\/p>\n
CSR Forum states on its website that CSR should integrate the
\ninterest of stakeholders -- all those affected by a company's
\nconduct -- into the company's business policies and actions.<\/p>\n
Today, stakeholders expect companies to perform well in non-
\nfinancial areas that involve human rights, business ethics,
\nenvironmental policies, corporate contribution, community
\ndevelopment, corporate governance, diversity and workplace
\nissues.<\/p>\n
\"Social and environmental performances are side by side with
\nfinancial performance,\" the forum says. According to the forum,
\nin the global economy, companies that are responsive to the
\ndemands of all of their stakeholders are arguably better
\npositioned to achieve long-term financial success.<\/p>\n
\"It is simply about good business practices\" Juni Kuntari, an
\nassociate partner of management consulting company Accenture,
\nsaid about the CSR concept.<\/p>\n
Juni said that there was a growing recognition now in
\nIndonesia that the financial achievements of a company are not
\nonly determined by its \"operating factor\" but also by its
\nintangibles such as good corporate governance practices.<\/p>\n
A.B. Susanto, Managing Partner of the Jakarta Consulting Group
\nshares her view, saying that a company should not only improve
\nthe quality of products and service, financial performance and
\nexpertise in human resources but also business ethics,
\nenvironmental issues and the people's trust such as through
\ncommunity development programs.<\/p>\n
Susanto suggests that community development programs should
\ncorrespond to the companies' core business to make the programs
\nrun effectively. For instance, companies that cause air pollution
\nresulting from their production should provide programs aimed at
\nminimizing the level of air pollution. \"It would be odd if they
\nwere engaged in greenery projects,\" he said. To make the CSR programs meet the right target, a team
\ninvolving local stakeholders, such as representatives of local
\ngovernment, those representing the community and related non-
\ngovernmental organizations (NGOs) conduct an in-depth analysis on
\nthe community's real needs, instead of short-term community
\nwants, before deciding on the proper CSR programs to be
\nestablished.<\/p>\n
With CSR programs becoming quite imperative for firms that
\nwant to compete in the international arena, companies that do not
\nadopt CSR can be less competitive, and less attractive to
\ninvestors.<\/p>\n
A survey conducted by London-based Ivey School of Business,
\nhas shown that firms that were considered environmentally
\nresponsible experienced little risk over a prolonged period of
\ntime because these firms had gained greater loyalty and
\ncommitment from their stakeholders.<\/p>\n
Meanwhile, a firm that implements CSR programs can benefit
\nfrom its improved corporate brand, because consumers are inclined
\nto buy products or services from companies with a good reputation
\nor those that make tangible contributions to increasing the
\nwelfare of the community in which they operate.<\/p>\n
A similar study conducted by Roper Search World has shown that
\nabout 75 percent of respondents prefer to choose products
\nproduced and marketed by companies that make tangible
\ncontributions to the community's prosperity.<\/p>\n
It said that about 66 percent of respondents were voluntarily
\nwilling to move to other brands provided that the companies
\nconcerned had a good image and a solid reputation by making
\nconcrete contributions to society.<\/p>",
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