CSR (Corporate Social Responsibility) is a business approach that integrates social and environmental responsibility into operational activities and company strategy. CSR includes a company's commitment to be responsible for its impact on society, the environment and other stakeholders.

CSR involves voluntary company initiatives and activities with the aim of providing a positive and sustainable impact on society and the surrounding environment.

The following are the differences between CSR and ESG

Systemic Approach: ESG adopts a systemic approach in managing the company's impact. This means that companies consider how each aspect of ESG is interrelated and influences each other. This approach recognizes that a company's success is not only determined by financial performance alone, but also by environmental, social and good governance performance.

CSR, although it also aims to provide a positive impact, tends to have an approach that is more focused on philanthropic activities or charitable donations without considering the interconnectedness and overall impact of ESG factors.

Compliance and Sustainability: ESG encourages companies to not only comply with legal and regulatory standards, but also adopt best and sustainable practices in the environmental, social and governance spheres. ESG views sustainability as a key principle in achieving long-term corporate goals.

CSR is often more related to a company's efforts to fulfill its social responsibilities, both those required by law and those that are ethical responsibilities. CSR can involve activities that are separate projects or initiatives that are not always integrated with the company's core strategy and operations.

Stakeholders and Transparency: ESG recognizes the importance of stakeholders in decision making and company operations. ESG encourages companies to interact with various stakeholders, such as employees, customers, communities and investors, and consider their interests in decision making.

CSR also pays attention to stakeholders, but the focus is often more on the company's efforts to provide benefits to society and the environment. ESG encourages greater transparency in the reporting and disclosure of ESG-related information to stakeholders.

These differences suggest that ESG adopts a more holistic, integrated and sustainable approach in managing corporate impact, while CSR tends to have a more limited focus on social responsibility and philanthropic initiatives. However, it is important to note that CSR and ESG can complement each other and companies can combine these two approaches to achieve the broader goal of creating a positive and sustainable impact.

Table of Contents :

1.What is ESG

2.ESG Objectives

3.Benefits of ESG for companies

4.How to do ESG

5.ESG program example

1.What is ESG

ESG is an abbreviation for Environmental, Social, and Governance. The ESG concept refers to non-financial factors used to evaluate a company's performance in terms of its impact on the environment, its involvement in social issues, and the quality of its governance. ESG is often used as a framework for assessing a company's impact and sustainability in environmental, social and responsible governance aspects.

Environmental: Environmental factors include a company's impact on the natural environment, including company policies and practices related to greenhouse gas emissions, waste management, use of natural resources, energy efficiency, biodiversity protection, and climate change.

Social: Social factors involve the social aspects of a company's operations, such as relationships with employees, treatment of local communities, employment opportunities, human rights, occupational health and safety, diversity and inclusion, and positive impacts on the communities in which the company operates.

Governance: Governance factors involve the company's organizational structure, management policies, board of directors composition, transparency, accountability, business integrity, and risk management practices.

More and more companies and investors are starting to pay attention to ESG as an important factor in making investment and operational decisions. ESG principles can help companies achieve sustainable growth, minimize risks, maintain a good reputation, and have a positive impact on the environment and society.

2.ESG Objectives

The goal of ESG is to integrate environmental, social and corporate governance factors in decision making and business operations. Some of the main objectives of the ESG approach are:

Long-Term Financial Performance: ESG aims to improve a company's long-term financial performance by considering non-financial factors that can impact the company's value. By paying attention to ESG, companies can reduce risks and increase opportunities in facing rapidly changing business environments.

Risk Mitigation: ESG helps companies identify and manage environmental, social and governance risks that may impact business operations. By paying attention to these factors, companies can anticipate and manage risks that may arise, such as changes in environmental regulations, failures of good governance, or reputation problems.

Environmental Sustainability: ESG focuses on environmental factors and aims to encourage companies to be more sustainable in managing natural resources, protecting the environment and mitigating negative impacts on the environment. The goal is to encourage companies to become greener, reduce greenhouse gas emissions, increase energy efficiency, manage waste wisely, and engage in environmentally friendly business practices.

Social Responsibility: ESG concerns a company's social responsibility towards employees, consumers, communities and society at large. These include employment fairness, diversity, human rights, ethical compliance, social contribution, and involvement in positive social initiatives. The goal of ESG is to ensure companies are socially responsible and have a positive impact on their stakeholders.

Trust and Reputation: ESG aims to build a company's trust and reputation in the eyes of investors, customers and the general public. By adopting responsible and sustainable business practices, companies can build a positive image, gain customer trust, and win long-term investor support.

Thus, the goal of ESG is to create long-term value for companies, society and the environment by considering non-financial factors in business decision making.

3.Benefits of ESG for companies

ESG has various benefits for companies, including:

Competitive Advantage: Paying attention to ESG can give companies a competitive advantage. Companies that prioritize sustainable and socially and environmentally responsible business practices can attract more investors, customers and employees who are increasingly concerned about ESG issues. This can improve a company's reputation and differentiate the company from its competitors in the market.

Risk Management: An ESG approach helps companies identify and manage risks related to environmental, social and governance factors. By paying attention to these risks, companies can take proactive action to reduce potential losses or negative impacts that may occur. This could include anticipating regulatory changes, mitigating reputational risks, or managing operational risks related to ESG issues.

Capital and Investor Access: More and more investors and financial institutions are considering ESG factors in their investment decisions. Companies that can demonstrate a strong commitment to good ESG practices can attract the interest of long-term oriented investors. This can open up opportunities for better access to capital and funding, as well as increase investor confidence in the company.

Increased Efficiency and Productivity: Integrating ESG practices in business operations can encourage companies to look for new, more efficient ways of managing natural resources, energy and waste. This can result in long-term cost savings and improve operational efficiency. In addition, companies that pay attention to employee welfare and a good working environment can increase employee productivity, loyalty and retention.

Reputation and Relationships with Stakeholders: ESG helps build a strong company reputation and good relationships with stakeholders, including customers, employees, suppliers, communities and society at large. By considering social and environmental factors, companies can win customer trust, build lasting relationships with suppliers, and gain support from the communities in which they operate.

Attractiveness to Employees: Employees, especially the younger generation, are increasingly prioritizing companies that are committed to social and environmental responsibility. Having a strong ESG approach can help companies recruit and retain top talent, as well as increase employee engagement.

Innovation and Business Opportunities: A focus on ESG can encourage companies to seek innovation and new sustainable business opportunities. By paying attention to environmental and social issues, companies can identify new opportunities in products or services that are environmentally friendly or responsive to emerging social needs. This can open the door to sustainable business growth and create long-term value.

Overall, an ESG approach can provide long-term benefits for companies by improving reputation, managing risk, gaining access to capital, increasing efficiency, building relationships with stakeholders, and driving innovation.

4.How to do ESG

To implement an ESG approach in a company, here are several steps that can be followed:

Evaluate and Identify ESG Risks and Opportunities: Carry out a comprehensive evaluation of environmental, social and corporate governance aspects. Identify risks and opportunities related to ESG factors relevant to the company's business operations.

Set ESG Policies and Goals: Set specific and measurable ESG policies and goals according to the characteristics of the company and its business. The policy must include the company's commitment to environmental, social and governance issues, as well as concrete steps that will be taken to achieve these goals.

ESG Integration in the Decision Making Process: Implement ESG integration in the company's decision making process. Ensure that ESG factors are considered systematically and integrated in business evaluation, investment, procurement and risk management.

Formation of an ESG Committee or Team: Form an ESG committee or team that is responsible for directing, implementing and supervising the implementation of ESG within the company. This committee should include representatives from various relevant departments or divisions within the company.

Enhanced ESG Reporting: Improve a company's ESG reporting by providing transparent, measurable and comprehensive information on ESG performance. Use a reporting framework such as the Global Reporting Initiative (GRI) or the Sustainability Accounting Standards Board (SASB) to guide a company's ESG reporting.

Involving Stakeholders: Involve internal and external stakeholders in ESG implementation. This includes employees, customers, investors, suppliers and the general public. Listen to input and feedback from stakeholders to understand their needs and expectations regarding ESG issues.

Involvement in External Initiatives: Actively engage in external initiatives related to ESG, such as sustainability certification programs, industry collaborations, or other sustainable initiatives. This can raise a company's profile and expand its positive ESG impact.

Continuous Assessment and Improvement: Conduct regular assessments of the company's ESG performance and identify areas for improvement. Committed to continuing to improve ESG performance in a sustainable manner by adopting best practices and relevant innovations.

It is important to remember that each company has unique needs and context, therefore, the ESG approach must be tailored to the company's characteristics and values. It requires support and commitment from top management to effectively integrate ESG into a company's culture and operations.

5.ESG program example

The following is an example of an ESG program that can be carried out in Bali:

Single-Use Plastic Reduction: Reducing the use of single-use plastic in Bali is an important ESG program to reduce negative impacts on the environment. Companies can start by replacing plastic water bottles with refillable water stations, providing reusable cloth shopping bags, and promoting the use of environmentally friendly food containers.

Beach Cleaning Program: Holding a regular beach cleaning program is an ESG step that companies can take in Bali. This program can involve company employees, local communities and customers in cleaning up rubbish on affected beaches.

Use of Renewable Energy: Installing solar panels or other renewable energy sources in company buildings is an ESG program that contributes to reducing greenhouse gas emissions and sustainable energy use. Companies can utilize the solar potential in Bali to meet most of their energy needs.

Support of Local Communities: ESG programs can involve active support of local communities in Bali. Companies can work with local organizations to provide training, assist with community economic development, provide educational assistance, or support health and sanitation programs.

Water Conservation: Given the limited water resources in Bali, ESG programs can involve water saving efforts in companies. This may include installing water-saving equipment, educating employees about efficient water use, and participating in water conservation programs in local communities.

Fair Employment Practices: Ensuring fair employment practices and inclusive diversity is an important part of an ESG program. Companies can adopt policies and practices that support the protection of employee rights, gender equality, cultural diversity, and improve workforce welfare.

Environmental Education: ESG programs may include environmental education initiatives in Bali. Companies can collaborate with local schools to provide training or hold teaching programs about the importance of protecting the environment, waste management or natural resource conservation.

Tree Planting Program in Bali is an excellent initiative to support environmental sustainability and nature conservation on the island of Bali. The following are the steps you can take to run the program:

Identify Location: Determine a suitable location for planting trees in Bali. Choose an area that requires restoration of forests, plantations, or natural areas affected by environmental damage.

It is important to realize that ESG programs must be adapted to local needs and context. Consult with local stakeholders, partners and communities to ensure these programs are beneficial and sustainable. contact agievent for CSR programs and combinations with existing activities in Bali