DefinePK

Research Objective

To examine how businesses across different industries on the Indonesian Stock Exchange modify and incorporate social responsibility into their fundamental business practices to attract domestic and foreign investors.

Methodology

Quantitative descriptive research design using secondary data collected from annual reports or company sustainability reports of companies listed on the Indonesian Stock Exchange (IDX) between 2020 and 2022. The Global Reporting Initiative (GRI) guidelines, consisting of 120 indicators, were used to measure CSR practices. The study focused on the financial, primary consumer, and technology sectors.

Methodology Flowchart

                        graph TD;
    A["Collect Secondary Data Annual/Sustainability Reports"] --> B["Identify Companies in Financial, Primary Consumer, Technology Sectors on IDX"];
    B --> C["Analyze CSR Practices using GRI Indicators"2020-2022""];
    C --> D["Compare CSR Implementation Across Sectors"];
    D --> E["Draw Conclusions and Implications"];                    

Discussion

The study highlights that while CSR implementation varies across sectors, there is a general trend of increasing focus on social responsibility. The financial sector's emphasis on economic aspects and investor attraction, the primary consumer sector's focus on social and environmental issues due to direct customer interaction, and the technology sector's rapid growth in CSR indicate evolving corporate strategies. The findings suggest that higher CSR values can enhance investor confidence and a company's reputation, influencing investment decisions.

Key Findings

- The financial sector prioritizes CSR from an economic perspective and shows a rising average CSR score, indicating increased investment in social and sustainable projects.
- The primary consumer sector focuses on social issues and demonstrates notable advancements in social, environmental, and economic spheres, with a potential to attract investors concerned with sustainable practices.
- The technology sector shows the largest average increase in CSR value from 2020 to 2022, indicating a growing commitment to social and environmental obligations, particularly in general disclosure and social aspects.
- The primary consumer sector had the highest mean CSR rating in 2022, followed by the financial sector, and then the technology sector.

Conclusion

The research provides a global perspective on CSR implementation across different sectors of the Indonesian Stock Exchange, offering valuable data for international investors. It concludes that while sectors have distinct priorities in CSR (economic for finance, social/environmental for consumer goods, and rapid growth in social/environmental for technology), the overall trend is towards increased CSR engagement, which is crucial for sustainable investment choices.

Fact Check

- As of the end of February 2023, 845 Indonesian firms were registered on the Indonesian Stock Exchange (IDX). (Confirmed by Maghiszha, 2023)
- The study utilized data from 2020 to 2022. (Confirmed in Methodology section)
- The Global Reporting Initiative (GRI) guidelines consist of 120 indicators. (Confirmed in Methodology section)

Mind Map