THE ANSWER SOCIAL
CHALLENGES: SOCIAL ACCOUNTING AND SOCIAL
ACCOUNTING MEASUREMENT
Arisandi Dwiharto*, Erma Sofriana Irmaningsih, Lenny
Christina Nawangsari, Sigmin Johanes Lo, Veithzal Rivai Zainal
Faculty of Economics and
Business, Universitas Mercu Buana, Jakarta, Indonesia
Email:
[email protected]*
|
Article
Information |
|
ABSTRACT |
|
Received:
December 17, 2022 Revised:
December 29, 2022 Approved: January 11, 2023 Online: January 26, 2023 |
|
The social challenge that this social
accounting audit is the answer to the license to operate for a company or
non-profit organization which we often know as Corporate Social
Responsibility (CSR). The result is
(1) CSR management requires companies to implement environmental protection
and economic development responsibilities, so they will take the initiative
to create environmental-related knowledge to adapt to changing external
ecological requirements and use green technology to build market forces. (2)
Some of these sustainability reporting standards must be made by the company
so that in the reporting process not only financial statements but also sustainability
reports are presented in the portfolio is shared publicly as an indicator of
the company's commitment to the implementation of sustainability programs,
where this sustainability report must be approved by a licensed certified
person. (3) With the spirit of social-techno-entrepreneurship as a form of
integration of all components, a company cannot separate between economic and
social values, so that the interests of various parties can be accommodated
simultaneously. Researchers suggest that companies must be able to present
economic legitimacy (creation of job opportunities), social legitimacy
(improvement of welfare), trust in interaction (corporate response defines
problems in society and mutual interaction in common life into a form of License
to Operate for companies or non-profit organizations. |
|
Keywords |
|
|
|
CSR; license to operate; social
accounting; sustainability report |
|
INTRODUCTION
Social accounting is the process of communicating social
as well as environmental impacts, derived from the economic actions or
behaviors of a company or organization, as well as beneficial for the benefit
of a particular group or also society at large. This accounting is also known
as social and environmental accounting, corporate social reporting, non-financial
reporting, corporate social responsibility reporting or sustainable accounting.
Generally, this accounting is used in the context of business or corporate
social responsibility (CSR). However, it also includes every organization such
as non-governmental organizations, charitable institutions or government
agencies.
Accounting in non-profit organizations is more defined as
an accountability to stakeholders.
The development of accounting leads to social accounting based on the triple bottom line which emphasizes stakeholder accountability in three
aspects (profit, people, and planet) (Elkington, 2013). Meanwhile, for
non-profit organizations, the people in
question include the board and its members.
Accounting exists to discipline individuals to care about
social and environmental issues, including transcendental spiritual issues (Sukoharsono, 2010). In addition, accounting is also a spirit of
sustainability in the organization, because it has an important role in
sustainability. Problems in organizations can be overcome from the dimensions
of spirituality and transcendentalist,
so that they become safe and sustainable
(Gray et al., 1998).
Based on the discussion above, the author draws
conclusions about the meaning of social accounting and the sustainability of an
organization from the point of view of its members. They interpret social
responsibility accounting as a moral responsibility. Moral responsibility is
based on the awareness to help each other, especially when having grief
(death). The sustainability of the organization is rooted in how members
interpret social accounting and organizational sustainability. Social accounting
and sustainability with consciousness based on spirituality can be part of
man's accountability to God. Spirituality blends into culture and is
implemented in everyday life.
According to Warren et al, social accounting is an
information system that produces reports to interested parties regarding
economic activities and conditions in the company. Meanwhile, according to
Hendrisken (1994), in this accounting the company must pay attention to its
social environment such as the community, consumers, government, workers and
other parties who support the company's operational activities.
According to (Crowther & Reis, 2011), interpreting this one accounting as an approach to
reporting on the economic activities of a company that emphasizes the need to
identify what kind of social behavior is relevant, to whom the company is
responsible for social performance and the development of appropriate actions
and reporting techniques.
The main purpose of this accounting is to increase the
awareness and attention of companies to the impact of their activities on the
environment. This accounting can also be a bridge between companies and
non-profit organizations related to the environment. This is to invite
companies to be able to set aside their profits for the benefit of the
environment. Such as environmental conservation activities, community
empowerment and the environment around the company and others. Usually, this
activity will be planned in detail in a CSR (Corporate Social Responsibility) program created by the
company's management team.
As for some other purposes of this branch of accounting,
namely:
(a) Benchmark of corporate social contribution; This one
accounting will help in identifying and measuring the company's contribution in
social terms. Usually, this identification and measurement is carried out
periodically. Which includes the benefits of the company for society, the social
costs incurred by the company and the company's responsibility in the event of
social impacts due to economic activities carried out by the company.
(b) Forms of corporate social responsibility; Every
company must have responsibility for any social impacts that occur due to their
economic or business activities.
(c) Assist in determining and creating corporate strategy; The
existence of this accounting will help determine company strategies and
practices that can directly affect the relativity of resources as well as the
status of individuals, communities and also social segments. Where this means
that the strategies and practices carried out by the company must consider
social and environmental impacts.
(d) Shaping public opinion; Companies that can fulfill their social obligations and
inform them cooperatively will certainly increase positive opinions from the
public. This will certainly be related to increasing the credibility and
attractiveness of your business or company.
(e) Improving the image and work motivation of employees; Positive opinion from the public will certainly make the
company's image better. Indirectly, this will also affect the work motivation
of employees.
(f) Tackling criticism that harms the company; This accounting can be used as evidence in countering
negative criticism that can directly or indirectly have an impact on the
company's economic activities. So that this will make the good name of the
company can be maintained.
(g) Help market a product or service; A positive corporate image will have an impact on the
marketing of products or services sold by the company. Because customers or
communities that intersect with the company can recommend the company to
another.
(h) Providing solutions for social groups; This accounting is also useful in providing solutions to
all social groups, in the form of relevant information, related to the
company's goals, policies, contributions, programs and strategies regarding its
social goals.
Social accounting refers to information regarding the
production, consumption, expenses of the enterprise, etc., and how it is
beneficial to the social environment as a whole. All organizations must consider
their social costs and benefits for sustainable development to achieve their
goals, for which social accounting can be developed (Ball & Osborne, 2011):
1. Environmental Accounting
It
provides information about the impact on the natural environment. In other
words, it can provide information regarding how the organization's activities
impact the soil, soil, climate change, air, water change, reduction of natural
resources such as coal, ferro, gasoline, gas, etc.
2. Sustainability Accounting
Also
known as corporate social responsibility, it provides social and economic
sustainability information. It directly
impacts the society, environment, and economic performance of an organization.
For example, using materials through a recycling process can help be more
sustainable.
3. National Accounting
It
refers to accounting techniques that analyze the economic activity of a
country. It analyzes the total expenses incurred by the state for conducting
business activities. For example, the government should record its expenditure
for each project to avoid misuse.
Likewise, the benefits of implementing Social accounting
in an organization, be it business activities or non-profit activities, will
provide the following benefits: (1)
Building
trust in the community through transparency from financial statements and
achievements of activities that have been carried out, (2) Providing social impact beyond the financial reporting
aspect, (3) Provide information to the government, the public, the
community, (4) It helps achieve the social goals of the organization by
providing transparent information, and (5) Mis assistive in measuring the
social cost-benefit analysis that has been carried out so far.
Furthermore, there are several fundamental questions
about how the process of implementing social accounting in an organization or
company operation, as follows: (1) how to implement social accounting in an
organization or company, (2) how to carry out a standard measurement and
reporting process to present complete information about the application of
social accounting, (3) Whether the implementation of social accounting in a
company can answer the challenges For
the company can be licensed to operate from the community or stakeholders in
its environment.
METHODS
This type of qualitative descriptive data analysis
technique is a research method that utilizes qualitative data and is described
descriptively (Creswell & Poth, 2016). This type of
qualitative descriptive data analysis is often used to analyze events,
phenomena, or situations socially. The methodology used is qualitatively using review
literature on the definition of social accounting and how to measure social
accounting in the process of its implementation to answer the social challenge
that this social accounting audit is the answer to the license to operate for a
company or non-profit organization which we often know as Corporate Social
Responsibility (CSR).
RESULTS AND DISCUSSION
1. Implementation of Social Responsibility
Accounting
CSR improves the efficiency of corporate debt financing by increasing
external confidence, thereby providing additional funds and strength for the
company to achieve green growth. To do this, the company must overcome the
initial stages of economic performance losses caused by investments in
environmental protection (Kim et al., 2019). To improve environmental and economic
performance in the future, companies must continue to invest in green
innovation. Stronger debt financing efficiency provides financial support
associated with integrating more funds at a lower cost. When conducting CSR
management, the company improves communication with stakeholders, which reduces
information asymmetry for stakeholders, thereby increasing social trust and
improving debt financing efficiency (Jia et al., 2020).
First, the company's CSR performance accelerates the external recognition
of the company. Investors will consider the implementation of CSR, which can
improve the reputation and integrity of the company (Miras‐Rodríguez et al., 2020). In
this way, the market value of the company is increased by easily attracting
additional active investors and reducing financing risks, costs and
uncertainties in the transaction process. Second, CSR management means that the
company is willing to accept supervision and review. This causes investors to
believe in the environmental protection and regulation of the company's
management, which increases credibility and makes the company worthy of trust
and investment. Again, implementing CSR can save time costs for investor
negotiations and build trust. For example, the environmental actions of
enterprises are often indirectly influenced by the government.
Companies can gain support from the government and state-owned banks by
disclosing CSR information about green growth, leveraging relational trust to
obtain lower-cost funding (Awaysheh et al., 2020). Finally, companies in the process of
implementing CSR for stakeholder relationship management will increase their
level of environmental protection to avoid penalties. In other words, the
government will set relevant punitive environmental regulations to increase the
cost of corporate pollution. Consumers with green preferences will avoid
polluting companies.
Therefore, the implementation of CSR can not only reduce government
penalties, such as fines and business terminations, but also gain more support
from consumers, which allows companies to allocate additional funds for green
innovations and other environmental protection technologies, thereby gaining
competitiveness based on green practices (Guzmán & Davis, 2017).
CSR management builds positive relationships with stakeholders and the
company's reputation, and such behavior may gain legitimacy and gain additional
external support to enhance the green competitive advantage (Miras‐Rodríguez et al., 2020). This is an important basis for achieving
green growth. According to the new institutional theory, legitimacy is a
necessary condition for a company to survive and thrive in the environment.
Achieving green growth needs to invest resources appropriate for green
innovation and other activities at an early stage, so that gaining
multi-dimensional legitimacy through CSR management can lay the foundation for
reducing uncertainty in green growth and increasing its efficiency.
Through CSR management, the company achieves green growth for political
legitimacy and market validity. Political legitimacy is mainly embodied in the
consistency of the company's environmental performance and the policies,
regulations, and standards set by the government. Market legitimacy is mainly
embodied in the consistency of the company's environmental protection behavior
and the interests of market participants who apply environmental standards and
are attractive to environmental interests. Companies with high political and
market legitimacy will benefit in the acquisition, allocation and utilization
of environmental resources. For example, PT. Perusahaan Gas Negara (Persero –
state own company) follows the development trend, interprets the spirit of the
government's environmental protection policy, and plans the direction of the
company's green transformation. It improves the effectiveness of green
manufacturing through 13 main channels, including low-carbon public welfare
design, equipment energy efficiency improvement, energy intelligent deployment,
energy-saving organization, carbon absorbing technology, solid and liquid waste
recycling, etc. In order to achieve efficiency, energy saving, and
environmental protection in the manufacturing process, they established a
globally integrated green manufacturing management system at an advanced level
and built a factory
2.
Measurement and Reporting of Social Responsibility Accounting
Accountability is about giving and receiving reports on whether individuals
are fulfilling a given responsibility. This implies that accountability relates
to the justification of actions related to the responsibility that the
individual assigns. In this way, it deals with hierarchy and establishes
principles for a specific way accounting measures how individuals fulfill their
responsibilities. In this way, accounting
is understood as the means by which accountability relationships can be
established, but at the same time can be degraded as a consequence of
legitimizing social surveillance in Lennon society, Niels Joseph, 2021.
Therefore, where accountability is associated with the act of giving and
receiving accounts from one's con- duction, responsibility is a matter of
fulfilling one's obligations morally or ethically. As a result, acting
responsibly has the connotation of moral and ethical actions, in which accountability
is more related to actions and the ability to provide accountability for one's
actions.
Despite these discussions, we consider accountability as a constructive,
giving, and receiving action on how well individuals are fulfilling their
assigned responsibilities. It deals with the specificity of responsibility.
Thus, accountability has to do with the justification of actions related to
individual responsibility as a signature, while responsibility, although it is
a social construct, is a broader, and more personal individual moral problem (Lindkvist & Llewellyn, 2003).
The economic advantage of a win-win position is possible when fewer
material inputs imply a reduction in raw materials and energy costs, for
example, transportation costs, or a reduction in the cost of imported fuel.
Correspondingly, waste management costs and emission control costs can be
reduced through successful industrial environmental management or enterprises.
Financial companies, banks or investors can choose their investment focus by applying
several environmental management criteria. There is a risk that the use of
eco-efficiency and win-win concepts may hinder the actual contribution of
business to ecological sustainability. Equally difficult is the measurement and
quantification of the deeper effects of the social dimension of sustainable
development, now commonly understood as a concept that carries economic,
ecological and social dimensions.
Companies that are successful in carrying out CSR have three core values
that are deeply instilled in the company, namely (1) economic resilience, (2)
environmental responsibility and (3) social accountability. If the financial
performance of a company is reflected in the financial statements, then the CSR
performance will be able to be listened to through a report called a
sustainability report.
In practice, some use other names for this type of report, for example CSR
reports, social reports,
environmental reports or social
and environmental reports. CSR
reports or sustainability reports essentially contain three main aspects,
namely economic, environmental and social. Therefore, this report is also
called "triple bottom line
reporting" or "three in one
reporting". Where the content expressed in the sustainability
report is the vision, mission, policies and strategies of the company,
especially those related to these three aspects (economic, environmental and
social). The report also reveals a concise profile of the company, parameters
used in the report, governance and commitments as well as governance with
stakeholders.
Furthermore, CSR performance measurement activities should also be carried
out using various indicators grouped into three key sustainable aspects
(economic, environmental and social). In the darft of sustainability report
guidelines issued by the Global
Reporting Initiative (GRI), a set of indicators for assessing
sustainable performance has been provided, namely 9 economic performance
indicators, 30 environmental performance indicators and 40 social performance
indicators.
To build optimal social and environmental accountability, companies are not
only required to comply with the provisions of applicable laws but also follow
best practices, norms, consensuses, and initiatives initiated by various
institutions or industry associations, especially those related to CSR issues.
In addition, companies must be honest in conveying accountability and reporting
to stakeholders, developing values that are believed in the company culture to
be embraced by all employees, as well as formulating and implementing policies
aimed at maintaining company sustainability, building good and organized
relationships with stakeholders and finally, last but not least, management
must implement the policies that have
been outlined, the established procedures and the commitments that have been
agreed.
In addition, through continuous reports, it will be revealed whether the
level of company openness is at one level with public expectations, to the
extent to which the company understands the expectations of stakeholders, what
is the concern of stakeholders and how the company responds to them. And what
is meant by environmental impact. Moreover, by making continuous reports, it
will be revealed whether the company has disclosed information transparently
and honestly including negative information.
A report is considered quality if its preparation is guided by generally
accepted rules or principles, as well as a continuous report. At the global
level, since 2000 it has been developed sustainably by the Global Reporting Initiative (GRI).
The GRI is an independent institution, founded in 1997 in Boston United States,
now based in the Netherlands. In 2002 a second-generation standard called the
2002 GRI Guidelines was born as a replacement for the previous standard. Gri
guildelines 2002 was launched at the World
Summit for Sustainable Development in 2002 in Johannesburg. After the
standard was implemented for three years, there was a lot of improvement input
from its users so that since the end of 2005, GRI has returned to work on
preparing revisions to the GRI guidelines which continue to be refined until
now the GRI 2021 version has appeared.
Sustainable development refers to 'development that meets the needs of the
present without compromising the ability of future generations to meet their
own needs'. The purpose of sustainability reporting using the GRI
Sustainability Reporting Standards (GRI Standards) is to provide transparency
about how an organization contributes or aims to contribute to sustainable
development.
GRI standards allow organizations to publicly disclose their most
significant impacts on the economy, the environment, and people, including the
impact on their human rights and how organizations manage these impacts. This
increases transparency about the organization's impact and increases organizational
accountability.
Standards contain disclosures that allow organizations to report
information about their impact consistently and credibly. It improves the
global comparability and quality of information reported on these impacts,
which supports information users in making informed judgments and decisions
about the impact and contribution of the organization to sustainable
development.
Some of the well-known report standards to demonstrate good business performance are: Standard Account Ability (AA1000)
based on the Triple Bottom Line (3BL)
concept initiated by John Elkington, Global Reporting Initiative (GRI)
Sustainable Reporting
Guidelines, Verite Monitoring Guidelines, Social Accountability International (SA-8000); and ISO 14000
Environmental Management Standards.
For this reason, initiated by IAI-KAM in mid-2005, an institution such as
GRI has been established called the
National Center for Sustainability Reporting (NCSR). This independent
institution has a mission: To develop
and disseminate guidelines for the preparation of sustainable reports for
organizations/companies in Indonesia. It is hoped that this independent institution
can be recognized by regulators and the public as a credible and competent
institution in compiling sustainable reporting standards for companies or
organizations in Indonesia.
This Standard is part of the GRI Sustainability Reporting Standards (GRI
Standards). The GRI Standards enable an organization to report information
about its most significant impacts on the economy, environment, and people,
including impacts on their human rights, and how it manages these impacts. The GRI Standards are structured as a system
of interrelated standards that are organized into three series: GRI Universal
Standards, GRI Sector Standards, and GRI Topic Standards (see Figure 1 in this
Standard).
Figure 1. Universal Standards: GRI 1, GRI 2
and GRI 3
The organization begins using the GRI Standards by consulting GRI 1. GRI 1:
Foundation 2021 specifies the requirements that the organization must comply
with to report in accordance with the GRI Standards. GRI 2: General Disclosures 2021 contains
disclosures that the organization uses to provide information about its
reporting practices and other organizational details, such as its activities,
governance, and policies. GRI 3: Material Topics 2021 provides guidance on how
to determine material topics. It also contains disclosures that the
organization uses to report information about its process of determining
material topics, its list of material topics, and how it manages each topic.
Sector Standards: The Sector Standards provide information for
organizations about their likely material topics. The organization uses the
Sector Standards that apply to its sectors when determining its material topics
and when determining what to report for each material topic.
Topic Standards: The Topic Standards contain disclosures that
the organization uses to report information about its impacts in relation to
particular topics. The organization uses the Topic Standards according to the
list of material topics it has determined using GRI 3.
In Indonesia, this GRI standard has been widely used by large medium-sized
companies, where the company usually
has an export market orientation or a public company so that in the reporting
process Not only financial statements
but also sustainability reports are
presented in the portfolio which is
shared with the public through the media
or the company's website. The reporting process with a mechanism follows the
GRI standard, of course, it must go through an assessment or audit process to
prove that the information in the reporting is declared valid by the team
audits that are designated or certified CSRS (Certified Sustainability Reporting
Specialist) before the report is published to the media.
3.
CSR Audit Answers Social Challenges: License to Operate (SLO)
In general, an audit is known as an assessment and evaluation that involves
collecting information about the system and financial statements of a company.
Such audits are usually carried out by competent, independent and objective
persons known as auditors or accountants. Internal auditors are those who are
employees of a company in charge of auditing the company's internal control
system. On the other hand, external auditors are independent staff appointed by
an auditing firm to audit the
financial statements of their clients in accordance with agreed approvals.
Nevertheless, today audits often include not only the collection of information
about the company's finances, but also environmental aspects and even the
socioeconomic conditions of society.
Social workers, consultants
or policy analysts usually conduct this social
audit. According to (Boyd, 1998), social audit is: A process that enables an organization
to assess and demonstrate its social, economic, and environmental benefits and
limitations. It is a way of measuring the extent to which an organization lives
up to the shared values and objectives it has committed to. Social auditing
provides an assessment of the impact of an organization’s non-financial
objectives through systematically and regularly monitoring its performance and
the views of its stakeholders.
The challenge in developing a CSR program audit protocol lies not only in
the complexity of its formulation. But also, in its implementation, where
social audits involve environmental and social aspects that are relatively more
difficult to formulate and measure than financial aspects. Social auditing
requires experts who have comprehensive competence in the environmental and
social fields, in addition to the ability to apply various research methods.
The main difficulty in designing an audit system for standardized CSR
programs is to formulate variables and indicators that are appropriate and can
be applied to all sectors. The two main conditions that need to be met are as
follows: (1) The definition of various categories should
be applicable to all enterprises, industries and even social systems that allow
comparative analysis to be carried out, and (2) Categories for classifying the activities of
the enterprise must be stable over a period of time, so that historical
comparisons can be made.
Many people believe that corporate
social responsibility (CSR) is able to present a social license to operate (SLO) in local communities and
other company stakeholders. In reality, CSR is not in line with SLO. The root
of the problem lies in a CSR approach that dictates economic and social values.
Admittedly, although SLO research examines more extractive industries, a
number of experts have begun to conduct SLO studies in other sectors, including
forestry, agriculture, renewable energy, and paper (Litmanen et al., 2016). In CSR practice, many companies that give
birth to one program do not come from derivatives of values and basic
principles that have been agreed upon. The tendency that occurs is only to
create insdentil programs that are not infrequently contrary to the needs of
the community.
Departing from these factors, the SLO of a company can be seen in several
levels. The SLO level is arranged in a hierarchical manner, so that the
company's SLO can rise to a higher level or drop to a lower level (Thomson et al., 2011): First,
withholding/ withdrawal. As the
lowest level, people reject the company's business activities, so business
continuity is stopped. Second, legitimacy boundary. At this level,
the company's legitimacy refers not only to formal legal permits, but also to
the company's efforts to provide information related to its business
activities, listen to community needs, and respect local norms. Third, acceptance. This level emphasizes that community support for the
company's business activities will arise if the company succeeds in gaining
legitimacy (the previous level). Fourth,
credibility boundary. If it is
to rise to this level, the company needs to follow up and realize the community
attention that has been listened to before. That way, it's not enough for
companies to listen and give promises to the community. Fifth, approval. At this point, the company will be able to
secure its resources and business activities if the company has managed to
reach the previous two levels. Sixth,
full-trust boundary. The
realization of promises to the community turned out to be not enough to build
harmonious relations. Therefore, this level can be obtained by the company if
the company is able to initiate activities to its stakeholders, for example
training to NGOs and government employees. Seventh, co-ownership.
At this level, the community truly considers business activities not only for
the benefit of the company, but their interests as well. Therefore, they take
part by fully supporting and being responsible in maintaining the company's
business continuity.
Local communities and other stakeholders revealed that the absorption of
local labor is still a question mark. As the "rightful owner" of the
oil and gas company's exploration and production area, the local people can
only afford to be spectators. They did realize that they needed qualified
qualifications to become employees of the oil and gas company, but the
opportunity for menial jobs, such as welding iron, in the company's activities
was very minimal. The narrative in the community even reveals that a number of
local communities are "only" employed as informal social security to
quell the demands of other residents during demonstrations. (Porter & Kramer, 2002) explain that the lack of attention to the
interests of the local community has an impact on the company's internal costs.
With the spirit of social-techno-entrepreneurship as a form of
integration of all components, a company cannot separate between
economic and social values. Therefore, the interests of various parties can be
accommodated simultaneously. Where the company must be able to present economic
legitimacy (creation of job opportunities), social legitimacy (improvement of
welfare), trust in interaction (the company's response defines problems in
society and joint interaction in common life.
Social entrepreneurship in framing the company's business practices with
the dynamics of community life is an institutional effort rooted in corporate
commitment. This is indeed not populist, but the spirit of social
entrepreneurship that is currently often practiced by many social business
people is basically very relevant to be practiced by large-scale business
people. Economic and social value need to be placed in the same box of
interests as the conceptual basis of
social-techno-entrepreneurship.
Where in the future social-techno-entrepreneurship can act as facilitators of change and
contribute to creating new institutions and structures in their industry (Zahraie et al., 2016). In addition, this concept is a new way to
participate in the commercialization of ideas, products, and services where
exchanges between service providers result from. This social entrepreneurship
refers to innovative behaviors by individuals or organizations in the private
sector that place social goals at the center of corporate strategy (Galindo-Martín et al., 2020). So social entrepreneurship is included as an
environmental entrepreneurship, which becomes a joint forum for synergy between
the company and the development of the community around the company.
Companies in this spirit need to shift the conventional business paradigm
to a much more inclusive face of business by making society a central actor in
its production chain. Thus, the direction to obtain SLO becomes a linear
mission with the company's business practices, and CSR runs more optimally to
capture two goals at once, namely business
sustainability and community
empowerment.
CONCLUSION
The conclusion: (1) CSR management requires businesses to
implement environmental protection and economic development responsibilities,
so they will take the initiative to develop environmental-related knowledge to
adapt to changing external environmental requirements and use green technology
to create market forces. (2) The company must create some of these
sustainability reporting standards so that in the reporting process, in
addition to financial statements, sustainability reports are also presented in
the portfolio and shared publicly as a sign of the company's commitment to the
implementation of sustainability programs. This sustainability report also
needs to be approved by a licensed certified person. (3) A corporation cannot
distinguish between economic and social values in the spirit of
social-techno-entrepreneurship as a way of integrating all elements, so that
the interests of multiple parties can be met concurrently.
To answer these social challenges, the corporate
management must be able to present economic legitimacy (creation of job
opportunities), social legitimacy (improvement of welfare), trust in
interaction (corporate response defines problems in society and joint
interaction in common life into a form of License to Operate for companies or
non-profit organizations.
REFERENCES
Awaysheh, A., Heron, R. A., Perry, T., & Wilson, J.
I. (2020). On the relation between corporate social responsibility and
financial performance. Strategic Management Journal, 41(6),
965–987. Google Scholar
Ball, A., & Osborne, S. P.
(2011). Social accounting and public management: accountability for the
common good. Routledge. Google Scholar
Boyd, G. (1998). Social Auditing: A
Method of Determining Impact. The Caledonia Centre for Social Development.
Google Scholar
Creswell, J. W., & Poth, C. N.
(2016). Qualitative inquiry and research design: Choosing among five
approaches. Sage publications. Google Scholar
Crowther, D., & Reis, C. (2011).
Social responsibility or social business? Social Business, 1(2),
129–148. Google Scholar
Elkington, J. (2013). Enter the
triple bottom line. In The triple bottom line: Does it all add up? (pp.
1–16). Routledge. Google Scholar
Galindo-Martín, M.-A.,
Castaño-Martínez, M.-S., & Méndez-Picazo, M.-T. (2020). The relationship
between green innovation, social entrepreneurship, and sustainable development.
Sustainability, 12(11), 4467. Google Scholar
Gray, R., Bebbington, J., Collison,
D., Kouhy, R., Lyon, B., Reid, C., Russell, A., & Stevenson, L. (1998). The
valuation of assets and liabilities: Environmental law and the impact of the
environmental agenda for business. The Institute of Chartered Accountants
of Scotland. Google Scholar
Guzmán, F., & Davis, D. (2017).
The impact of corporate social responsibility on brand equity: consumer
responses to two types of fit. Journal of Product & Brand Management.
Google Scholar
Jia, Y., Gao, X., & Julian, S.
(2020). Do firms use corporate social responsibility to insure against stock
price risk? Evidence from a natural experiment. Strategic Management Journal,
41(2), 290–307. Google Scholar
Kim, J., Cho, K., & Park, C. K.
(2019). Does CSR assurance affect the relationship between CSR performance and
financial performance? Sustainability, 11(20), 5682. Google Scholar
Lindkvist, L., & Llewellyn, S.
(2003). Accountability, responsibility and organization. Scandinavian
Journal of Management, 19(2), 251–273. Elsevier
Litmanen, T., Jartti, T., &
Rantala, E. (2016). Refining the preconditions of a social licence to operate
(SLO): reflections on citizens’ attitudes towards mining in two Finnish
regions. The Extractive Industries and Society, 3(3), 782–792. Elsevier
Miras‐Rodríguez, M. del M.,
Bravo‐Urquiza, F., & Escobar‐Pérez, B. (2020). Does corporate social
responsibility reporting actually destroy firm reputation? Corporate Social
Responsibility and Environmental Management, 27(4), 1947–1957. Google Scholar
Porter, M. E., & Kramer, M. R.
(2002). The competitive advantage of corporate philanthropy. Harvard
Business Review, 80(12), 56–68. Google Scholar
Sukoharsono, E. G. (2010).
Metamorphosis of Social and Environmental Accounting: Constructing
Sustainability Accounting with Spirituality Dimension. The International
Journal of Accounting and Business Society, 18(2), 1–35. Google Scholar
Thomson, I., Boutilier, R., &
Black, L. (2011). The Social Licence to Operate: Normative Elements and
Metrics. First International Seminar on Social Responsibility in Mining, Santiago,
Chile. Google Scholar
Zahraie, B., Everett, A. M., Walton,
S., & Kirkwood, J. (2016). Environmental entrepreneurs facilitating change
toward sustainability: A case study of the wine industry in New Zealand. Small
Enterprise Research, 23(1), 39–57. Google Scholar