Sustainable Development Goals CSR Measurement
Jimmy Tanaya
jtanaya@aicon.co.id
Yogyakarta, September 2015
Copyright by AICÓN, 2015
1
Outline
1. MDGs-SDGs-PKBL-ISO26000
2. CSR Measurement
Copyright by AICÓN, 2015
2
MDGS-SDGS-PKBLISO26000
Copyright by AICÓN, 2015
3
“Priorities” are shifting
Abundance resources Limited
Mass production sustainable production
Mainly economics PPP
Some importance discourses:
Limit to growth (1972)
Our Common Future/Brundtland Report (1987)
Earth Summit/Agenda 21 (1992)
UNFCC/Climate Change/IPCC’s AR4 (2007)
Copyright by AICÓN, 2015
Some Implications
Civil society movement e.g. Fairtrade.
International conventions: montreal protocol, kyoto
protocol, etc.
Persyaratan faktor lingkungan-sosial dalam dana
hibah.
Tighter trade policies e.g. traceability, precautionary
principle, etc.
MDGs & Post-MDGs
Copyright by AICÓN, 2015
Post MDGs 2015
SDGs’
5Ps
Copyright by AICÓN, 2015
7
SDG Example
Goal 1. End poverty in all its forms everywhere
!"#$
1.1 By 2030, eradicate extreme poverty for all people everywhere, currently measured as people
living on less than $1.25 a day
1.2 By 2030, reduce at least by half the proportion of men, women and children of all ages living in
poverty in all its dimensions according to national definitions
1.3 Implement nationally appropriate social protection systems and measures for all, including floors,
and by 2030 achieve substantial coverage of the poor and the vulnerable
1.4 By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal
rights to economic resources, as well as access to basic services, ownership and control over
land and other forms of property, inheritance, natural resources, appropriate new technology
and financial services, including microfinance
1.5 By 2030, build the resilience of the poor and those in vulnerable situations and reduce their
exposure and vulnerability to climate-related extreme events and other economic, social and
environmental shocks and disasters
1.a Ensure significant mobilization of resources from a variety of sources, including through enhanced
development cooperation, in order to provide adequate and predictable means for developing
countries, in particular least developed countries, to implement programmes and policies to end
poverty in all its dimensions
1.b Create sound policy frameworks at the national, regional and international levels, based on propoor and gender-sensitive development strategies, to support accelerated investment in
poverty eradication actions
%#&!'%(
)
https://sustainabledevelopment.un.org/post2015/transformingourworld
Copyright by AICÓN, 2015
8
Hubungan SDGs, ISO26000, dan PKBL
SDGs
ISO 26000
Goal #1, End poverty in 6.3. Human Rights
all its forms
Human rights risks situation
everywhere
Economic, social and cultural
rights
6.8. Community Involvement and
Development
Education and culture
Employment creation and skills
development
Technology development and
access
Wealth & income creation
Copyright by AICÓN, 2015
PKBL
Program Kemitraan
Bantuan Bencana Alam
Bantuan pendidikan
dan/atau training
(entrepreneurship
education)
Bantuan pengembangan
prasarana dan/atau
sarana (jalan, listrik)
Bantuan sosial
kemasyarakatan dalam
rangka pengentasan
kemiskinan
Hubungan SDGs, ISO26000, dan PKBL
SDGs
Goal#2, End hunger,
achieve food security,
and improved nutrition,
and promote
sustainable agriculture
ISO 26000
6.5. The Environment
Prevention of pollution
(water and land)
Sustainable resources use
Climate change mitigation
and adaptation
6.8. Community Involvement
and Development
Health (nutrition)
Copyright by AICÓN, 2015
PKBL
Bantuan pelestarian alam
(sumber air)
Bantuan pendidikan
dan/atau kesehatan
(pertanian, food security)
Bantuan pengembangan
prasarana dan/atau sarana
(irigasi)
Bantuan peningkatan
kesehatan (nutrisi)
Hubungan SDGs, ISO26000, dan PKBL
SDGs
ISO 26000
Goal #3, Ensure healthy lives 6.4. Labour Practices
and promote well-being for
Health and safety at work
all at all ages
6.5. The Environment
Prevention of pollution
(water resources)
6.7. Consumer Issues
Protecting consumers’
health and safety (avoid
using hazardous chemical in
products)
6.8. Community Involvement
and Development
Health
Copyright by AICÓN, 2015
PKBL
Bantuan peningkatan
kesehatan
Bantuan pendidikan
dan/atau training
(aspek kesehatan)
Bantuan pelestarian
alam (sumber air)
Bantuan
pengembangan
prasarana dan/atau
sarana
Hubungan SDGs, ISO26000, dan PKBL
SDGs
Goal #4, Ensure inclusive
and equitable quality
education and promote lifelong learning opportunities
ISO 26000
6.3. Human Rights
Discrimination and
vulnerable groups
6.4. Labour Practices
Human development and
training in the workplace
6.8. Community Involvement
and Development
Education and culture
Employment creation and
skills development
Social Investment
Copyright by AICÓN, 2015
PKBL
Bantuan pendidikan
dan/atau training
Bantuan
pengembangan
prasarana dan/atau
sarana (pembangunan
sekolah)
Hubungan SDGs, ISO26000, dan PKBL
SDGs
ISO 26000
Goal #5, Achieve
gender equality and
empower all
women and girls
6.3. Human Rights
Discrimination and vulnerable groups
Civil and political rights
Economic , social and cultural rights
6.8. Community Involvement and
Development
Community involvement (keterlibatan
kaum perempuan)
Education and culture
Technology development and access
Wealth and income creation
Health
Copyright by AICÓN, 2015
PKBL
Program Kemitraan
(women
entrepreneurship)
Bantuan pendidikan
dan/atau pelatihan
Bantuan peningkatan
kesehatan
Bantuan sosial
kemasyarakatan dalam
rangka pengentasan
kemiskinan
Hubungan SDGs, ISO26000, dan PKBL
SDGs
ISO 26000
Goal #6, Ensure
availability and
sustainable
management of water
and sanitation for all
6.5. The Environment
Prevention of pollution
Sustainable resource use (esp. water)
Climate change mitigation and
adaptation (esp. water resources)
Protection of the environment,
biodiversity and restoration of
natural habitats
6.8. Community Involvement &
Development
Health
Social Investment (infrastructure)
Copyright by AICÓN, 2015
PKBL
Bantuan pelestarian
alam (sumber air)
Bantuan
pengembangan
prasarana dan/atau
sarana (instalasi air
bersih)
Bantuan peningkatan
kesehatan (sanitasi)
Bandtuan
pendidikan dan/atau
pelatihan
Hubungan SDGs, ISO26000, dan PKBL
SDGs
Goal #7, Ensure access
to affordable, reliable,
sustainable, and
modern energy for all
ISO 26000
6.5. The Environment
Prevention of pollution
Sustainable resource use (esp.
energy)
Climate change mitigation and
adaptation
6.7. Consumer Issues
Access to essential services
6.8. Community Involvement and
Development
Technology development and
access (esp. in energy)
Copyright by AICÓN, 2015
PKBL
Pengembangan
sarana dan/atau
prasarana
Bantuan pendidikan
dan/atau pelatihan
(mengenai energy)
Hubungan SDGs, ISO26000, dan PKBL
SDGs
Goal #8,
Promote
sustained,
inclusive and
sustainable
economic
growth, full
productive
employment
and decent
work for all
ISO 26000
PKBL
6.3. Human Rights
Fundamental principles and rights at work
6.4. Labour Practices
Employment and employment relationship
Conditions of work and social protection
Social dialogue
Health and safety at work
Human development and training at workplace
6.5. The Environment
Sustainable resource use
6.8. Community Involvement & Development
Employment creation and skills development
Wealth & income creation
Program
Kemitraan
Bantuan
pendidikan
dan/atau
pelatihan
Bantuan sosial
kemasyarakatan
dalam rangka
pengentasan
kemiskinan
Copyright by AICÓN, 2015
Hubungan SDGs, ISO26000, dan PKBL
SDGs
ISO 26000
Goal #9, Build resilient 6.5. The Environment
infrastructure,
Sustainable resource use
promote inclusive and 6.8. Community Involvement &
sustainable
Development
industrialization and
Employment creation and skills
foster innovation
development
Technology development and
access
Wealth and income creation
Social investment
Copyright by AICÓN, 2015
PKBL
Program Kemitraan
Bantuan
pengembangan
prasarana dan/atau
sarana
Bantuan pendidikan
dan/atau pelatihan
Hubungan SDGs, ISO26000, dan PKBL
SDGs
Goal #10, reduce
inequality within
among countries
ISO 26000
PKBL
6.3. Human Rights
Discrimination and vulnerable
groups
Civil and political rights
Economic, social and cultural rights
Bantuan pendidikan
dan/atau pelatihan
(tentang isu2 HAM
dan politik
internasional)
Copyright by AICÓN, 2015
Hubungan SDGs, ISO26000, dan PKBL
SDGs
Goal #11, Make cities
and human settlement
inclusive, safe, resilient,
and sustainable
ISO 26000
6.3. Human Rights
Human rights risks situation
6.7. Consumer Issues
Access to essential services
6.8. Community Involvement and
Development
Community involvement (esp.
in urbanization participatory)
Health
Social investment
Copyright by AICÓN, 2015
PKBL
Bantuan korban
bencana alam
Bantuan
pengembangan
prasarana dan/atau
sarana
Bantuan sarana ibadah
Bantuan peningkatan
kesehatan (khususnya
sanitasi publik)
Hubungan SDGs, ISO26000, dan PKBL
SDGs
Goal #12, Ensure
sustainable consumption
and production patterns
ISO 26000
6.5. The Environment
Prevention of pollution
Sustainable resource use
6.6. Fair Operating Practices
Promoting social responsibility in
the value chain
6.7. Consumer Issues
Protecting consumers’ health and
safety
Sustainable consumption
6.8. Community Involvement &
development
Employment creation and skills
development (esp. local jobs,
products and services)
Copyright by AICÓN, 2015
PKBL
Program
Kemitraan (fokus
pada bantuan
pengembangan
produksi bersih)
Bantuan
pendidikan
dan/atau
pelatihan
Hubungan SDGs, ISO26000, dan PKBL
SDGs
ISO 26000
PKBL
Goal #13, Take urgent
action to combat climate
change and its impact
6.5. The Environment
Climate change mitigation
and adaptation
Bantuan pelestarian alam
Goal #14, Conserve and
sustainably use the oceans,
seas, and marine resources
for sustainable
development
6.5. The Environment
Prevention of pollution
Sustainable resource use
(esp. fish as raw material)
Protection of the
environment, biodiversity
and restoration of habitats
6.8. Community Involvement
and Development
Community development
Bantuan pelestrian
alam
Bantuan sosial
kemasyarakatan
(khususnya nelayan)
Bantan pengembangan
prasarana dan sarana
(misalnya Tempat
Pelelangan Ikan)
Copyright by AICÓN, 2015
Hubungan SDGs, ISO26000, dan PKBL
SDGs
Goal #15, Protect, restore
and promote sustainable
use of terrestrial
ecosystems, sustainably
manage forests, combat
desertification, and halt
and reserve land
degradation and halt
biodiversity lost
ISO 26000
PKBL
6.5. The Environment
Bantuan pelestarian
Prevention of pollution
alam
Sustainable resource use
Climate change mitigation and
adaptation
Protection of the
environment, biodiversity and
restoration of natural habitats.
6.8. Community involvement and
development
Community involvement
Copyright by AICÓN, 2015
Hubungan SDGs, ISO26000, dan PKBL
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Copyright by AICÓN, 2015
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Copyright by AICÓN, 2015
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CSR
SOEs
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Copyright by AICÓN, 2015
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CSR
MEASUREMENT
Copyright by AICÓN, 2015
26
CSR Measurement: Why?
“When you can measure what you are speaking
about and express it in numbers, you know
something about it; but when you cannot
measure, when you cannot express in numbers,
your knowledge is of a meagre and unsatisfactory
kind. It may be the beginnings of knowledge, but
you have scarcely, in your thoughts, advanced to
the stage of a science.” (Lord Kelvin (Liebowitz
and Suen, 2000))
“creates understanding, drives behaviour and
leads to results” (Fawcett et al., 2007)
Copyright by AICÓN, 2015
27
But, how?
People
Planet
Profit
Copyright by AICÓN, 2015
28
Environmental Valuation
1 +
0
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Copyright by AICÓN, 2015
29
People/Social value
Less developed concept
Complex, dynamic, context-bounded
Qualitative indicators
Copyright by AICÓN, 2015
30
Profit?
)("
Copyright by AICÓN, 2015
:
<
1 +
31
CSR: Measurement Category
Tools
Angle
Non-monetary
Public & Company
Simple
Easy to use
Relatively
comprehensive
Flexible
Widely accepted
Weakness Heterogeneous
No “bottom-line”
Strength
%
, 9:
;
Monetary
Company
Proxy
Public
“Bottom-line”
Comparison over time
Relatively objective
Easier decision making
Homogeneous
“Bottom-line”
Comparison over time
Relatively objective
Easier decision making
Easier than monetary
Partial valuation
Heterogeneous
Less flexible
Partial valuation
Rarely used (nowadays) Inflexible
Sectoral availability
Copyright by AICÓN, 2015
32
Proxy Example
=
Source: Tanaya (2007) after Brouwer et al. (1997)
Copyright by AICÓN, 2015
33
Business Language
Copyright by AICÓN, 2015
34
CSR & Business
Business language: “Risk and Return”. Increased
return or lower risk.
End-of-Pipe (“Return”):
Niche Market
Premium price (brand value)
Environment + social value
Supply chain/risk management (“Risk”):
Lower cost
Continuousness of supply
“Going Concern”: license to operate
Copyright by AICÓN, 2015
>?
Business Risk
Social
Economy
Environment
Business
Risks
Copyright by AICÓN, 2015
Strategic
Risks
Financial
Risks
Operational
Risks
Compliance
Risks
Example: Freeport
< 0
9:
;
Copyright by AICÓN, 2015
CSR Value: Risk Mitigation
Risk Register: Probabilitas & Dampak
inherent (Rp)
Peta hubungan CSR & Business Risk
Korelasi: Pre-test & post-test
Cost Benefit Analysis
Copyright by AICÓN, 2015
38
CBA: Steps of Analysis
1.
2.
3.
4.
5.
6.
7.
What is the nature of company?
Goals? [“Problem” to be solved]
Objectives?
Alternatives?
Consequences?
Value of consequences?
Certainty of consequence?
8. Outcomes compared with predictions? ⇒ Evaluation
Copyright by AICÓN, 2015
CBA: (Selected) appraisal criteria
Net Present Value (NPV)
Internal Rate of Return (IRR)
Benefit Cost Ratio (B/C ratio or BCR)
Copyright by AICÓN, 2015
!
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Copyright by AICÓN, 2015
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Net Present Value (NPV)
∑
8
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+
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Copyright by AICÓN, 2015
∑
−
+
Internal Rate of Return (IRR)
∑
∑
+
8
< @<
* @*
@A 0
,
,
6
Copyright by AICÓN, 2015
+
Benefit Cost Ratio (BCR)
∑
8
< @<
* @*
@4
+
,
,
+
Copyright by AICÓN, 2015
∑
+
CSR Measurement: Simplified
Saving Dampak Inherent CSR’s Benefit
Hitung kontribusi CSR terhadap probabilitas
kejadian.
Hitung Net CSR Value berdasarkan NPV atau
IRR.
Catatan: longitudinal study membuat
perhitungan semakin baik.
Copyright by AICÓN, 2015
45
CBA: Common problems
Choice of discount rate
Treatment of secondary benefits (multiplier effect)
Treatment of government subsidies (cost recovery?)
Determination of opportunity costs
Failure to fully consider alternatives
Identification of winners and losers
Risk and uncertainty
5
Copyright by AICÓN, 2015
0
8 0
9
B;
Non-Monetary e.g.: ISO26000
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Copyright by AICÓN, 2015
*$
CSR & Project Development
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jtanaya@aicon.co.id
Yogyakarta, September 2015
Copyright by AICÓN, 2015
1
Outline
1. MDGs-SDGs-PKBL-ISO26000
2. CSR Measurement
Copyright by AICÓN, 2015
2
MDGS-SDGS-PKBLISO26000
Copyright by AICÓN, 2015
3
“Priorities” are shifting
Abundance resources Limited
Mass production sustainable production
Mainly economics PPP
Some importance discourses:
Limit to growth (1972)
Our Common Future/Brundtland Report (1987)
Earth Summit/Agenda 21 (1992)
UNFCC/Climate Change/IPCC’s AR4 (2007)
Copyright by AICÓN, 2015
Some Implications
Civil society movement e.g. Fairtrade.
International conventions: montreal protocol, kyoto
protocol, etc.
Persyaratan faktor lingkungan-sosial dalam dana
hibah.
Tighter trade policies e.g. traceability, precautionary
principle, etc.
MDGs & Post-MDGs
Copyright by AICÓN, 2015
Post MDGs 2015
SDGs’
5Ps
Copyright by AICÓN, 2015
7
SDG Example
Goal 1. End poverty in all its forms everywhere
!"#$
1.1 By 2030, eradicate extreme poverty for all people everywhere, currently measured as people
living on less than $1.25 a day
1.2 By 2030, reduce at least by half the proportion of men, women and children of all ages living in
poverty in all its dimensions according to national definitions
1.3 Implement nationally appropriate social protection systems and measures for all, including floors,
and by 2030 achieve substantial coverage of the poor and the vulnerable
1.4 By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal
rights to economic resources, as well as access to basic services, ownership and control over
land and other forms of property, inheritance, natural resources, appropriate new technology
and financial services, including microfinance
1.5 By 2030, build the resilience of the poor and those in vulnerable situations and reduce their
exposure and vulnerability to climate-related extreme events and other economic, social and
environmental shocks and disasters
1.a Ensure significant mobilization of resources from a variety of sources, including through enhanced
development cooperation, in order to provide adequate and predictable means for developing
countries, in particular least developed countries, to implement programmes and policies to end
poverty in all its dimensions
1.b Create sound policy frameworks at the national, regional and international levels, based on propoor and gender-sensitive development strategies, to support accelerated investment in
poverty eradication actions
%#&!'%(
)
https://sustainabledevelopment.un.org/post2015/transformingourworld
Copyright by AICÓN, 2015
8
Hubungan SDGs, ISO26000, dan PKBL
SDGs
ISO 26000
Goal #1, End poverty in 6.3. Human Rights
all its forms
Human rights risks situation
everywhere
Economic, social and cultural
rights
6.8. Community Involvement and
Development
Education and culture
Employment creation and skills
development
Technology development and
access
Wealth & income creation
Copyright by AICÓN, 2015
PKBL
Program Kemitraan
Bantuan Bencana Alam
Bantuan pendidikan
dan/atau training
(entrepreneurship
education)
Bantuan pengembangan
prasarana dan/atau
sarana (jalan, listrik)
Bantuan sosial
kemasyarakatan dalam
rangka pengentasan
kemiskinan
Hubungan SDGs, ISO26000, dan PKBL
SDGs
Goal#2, End hunger,
achieve food security,
and improved nutrition,
and promote
sustainable agriculture
ISO 26000
6.5. The Environment
Prevention of pollution
(water and land)
Sustainable resources use
Climate change mitigation
and adaptation
6.8. Community Involvement
and Development
Health (nutrition)
Copyright by AICÓN, 2015
PKBL
Bantuan pelestarian alam
(sumber air)
Bantuan pendidikan
dan/atau kesehatan
(pertanian, food security)
Bantuan pengembangan
prasarana dan/atau sarana
(irigasi)
Bantuan peningkatan
kesehatan (nutrisi)
Hubungan SDGs, ISO26000, dan PKBL
SDGs
ISO 26000
Goal #3, Ensure healthy lives 6.4. Labour Practices
and promote well-being for
Health and safety at work
all at all ages
6.5. The Environment
Prevention of pollution
(water resources)
6.7. Consumer Issues
Protecting consumers’
health and safety (avoid
using hazardous chemical in
products)
6.8. Community Involvement
and Development
Health
Copyright by AICÓN, 2015
PKBL
Bantuan peningkatan
kesehatan
Bantuan pendidikan
dan/atau training
(aspek kesehatan)
Bantuan pelestarian
alam (sumber air)
Bantuan
pengembangan
prasarana dan/atau
sarana
Hubungan SDGs, ISO26000, dan PKBL
SDGs
Goal #4, Ensure inclusive
and equitable quality
education and promote lifelong learning opportunities
ISO 26000
6.3. Human Rights
Discrimination and
vulnerable groups
6.4. Labour Practices
Human development and
training in the workplace
6.8. Community Involvement
and Development
Education and culture
Employment creation and
skills development
Social Investment
Copyright by AICÓN, 2015
PKBL
Bantuan pendidikan
dan/atau training
Bantuan
pengembangan
prasarana dan/atau
sarana (pembangunan
sekolah)
Hubungan SDGs, ISO26000, dan PKBL
SDGs
ISO 26000
Goal #5, Achieve
gender equality and
empower all
women and girls
6.3. Human Rights
Discrimination and vulnerable groups
Civil and political rights
Economic , social and cultural rights
6.8. Community Involvement and
Development
Community involvement (keterlibatan
kaum perempuan)
Education and culture
Technology development and access
Wealth and income creation
Health
Copyright by AICÓN, 2015
PKBL
Program Kemitraan
(women
entrepreneurship)
Bantuan pendidikan
dan/atau pelatihan
Bantuan peningkatan
kesehatan
Bantuan sosial
kemasyarakatan dalam
rangka pengentasan
kemiskinan
Hubungan SDGs, ISO26000, dan PKBL
SDGs
ISO 26000
Goal #6, Ensure
availability and
sustainable
management of water
and sanitation for all
6.5. The Environment
Prevention of pollution
Sustainable resource use (esp. water)
Climate change mitigation and
adaptation (esp. water resources)
Protection of the environment,
biodiversity and restoration of
natural habitats
6.8. Community Involvement &
Development
Health
Social Investment (infrastructure)
Copyright by AICÓN, 2015
PKBL
Bantuan pelestarian
alam (sumber air)
Bantuan
pengembangan
prasarana dan/atau
sarana (instalasi air
bersih)
Bantuan peningkatan
kesehatan (sanitasi)
Bandtuan
pendidikan dan/atau
pelatihan
Hubungan SDGs, ISO26000, dan PKBL
SDGs
Goal #7, Ensure access
to affordable, reliable,
sustainable, and
modern energy for all
ISO 26000
6.5. The Environment
Prevention of pollution
Sustainable resource use (esp.
energy)
Climate change mitigation and
adaptation
6.7. Consumer Issues
Access to essential services
6.8. Community Involvement and
Development
Technology development and
access (esp. in energy)
Copyright by AICÓN, 2015
PKBL
Pengembangan
sarana dan/atau
prasarana
Bantuan pendidikan
dan/atau pelatihan
(mengenai energy)
Hubungan SDGs, ISO26000, dan PKBL
SDGs
Goal #8,
Promote
sustained,
inclusive and
sustainable
economic
growth, full
productive
employment
and decent
work for all
ISO 26000
PKBL
6.3. Human Rights
Fundamental principles and rights at work
6.4. Labour Practices
Employment and employment relationship
Conditions of work and social protection
Social dialogue
Health and safety at work
Human development and training at workplace
6.5. The Environment
Sustainable resource use
6.8. Community Involvement & Development
Employment creation and skills development
Wealth & income creation
Program
Kemitraan
Bantuan
pendidikan
dan/atau
pelatihan
Bantuan sosial
kemasyarakatan
dalam rangka
pengentasan
kemiskinan
Copyright by AICÓN, 2015
Hubungan SDGs, ISO26000, dan PKBL
SDGs
ISO 26000
Goal #9, Build resilient 6.5. The Environment
infrastructure,
Sustainable resource use
promote inclusive and 6.8. Community Involvement &
sustainable
Development
industrialization and
Employment creation and skills
foster innovation
development
Technology development and
access
Wealth and income creation
Social investment
Copyright by AICÓN, 2015
PKBL
Program Kemitraan
Bantuan
pengembangan
prasarana dan/atau
sarana
Bantuan pendidikan
dan/atau pelatihan
Hubungan SDGs, ISO26000, dan PKBL
SDGs
Goal #10, reduce
inequality within
among countries
ISO 26000
PKBL
6.3. Human Rights
Discrimination and vulnerable
groups
Civil and political rights
Economic, social and cultural rights
Bantuan pendidikan
dan/atau pelatihan
(tentang isu2 HAM
dan politik
internasional)
Copyright by AICÓN, 2015
Hubungan SDGs, ISO26000, dan PKBL
SDGs
Goal #11, Make cities
and human settlement
inclusive, safe, resilient,
and sustainable
ISO 26000
6.3. Human Rights
Human rights risks situation
6.7. Consumer Issues
Access to essential services
6.8. Community Involvement and
Development
Community involvement (esp.
in urbanization participatory)
Health
Social investment
Copyright by AICÓN, 2015
PKBL
Bantuan korban
bencana alam
Bantuan
pengembangan
prasarana dan/atau
sarana
Bantuan sarana ibadah
Bantuan peningkatan
kesehatan (khususnya
sanitasi publik)
Hubungan SDGs, ISO26000, dan PKBL
SDGs
Goal #12, Ensure
sustainable consumption
and production patterns
ISO 26000
6.5. The Environment
Prevention of pollution
Sustainable resource use
6.6. Fair Operating Practices
Promoting social responsibility in
the value chain
6.7. Consumer Issues
Protecting consumers’ health and
safety
Sustainable consumption
6.8. Community Involvement &
development
Employment creation and skills
development (esp. local jobs,
products and services)
Copyright by AICÓN, 2015
PKBL
Program
Kemitraan (fokus
pada bantuan
pengembangan
produksi bersih)
Bantuan
pendidikan
dan/atau
pelatihan
Hubungan SDGs, ISO26000, dan PKBL
SDGs
ISO 26000
PKBL
Goal #13, Take urgent
action to combat climate
change and its impact
6.5. The Environment
Climate change mitigation
and adaptation
Bantuan pelestarian alam
Goal #14, Conserve and
sustainably use the oceans,
seas, and marine resources
for sustainable
development
6.5. The Environment
Prevention of pollution
Sustainable resource use
(esp. fish as raw material)
Protection of the
environment, biodiversity
and restoration of habitats
6.8. Community Involvement
and Development
Community development
Bantuan pelestrian
alam
Bantuan sosial
kemasyarakatan
(khususnya nelayan)
Bantan pengembangan
prasarana dan sarana
(misalnya Tempat
Pelelangan Ikan)
Copyright by AICÓN, 2015
Hubungan SDGs, ISO26000, dan PKBL
SDGs
Goal #15, Protect, restore
and promote sustainable
use of terrestrial
ecosystems, sustainably
manage forests, combat
desertification, and halt
and reserve land
degradation and halt
biodiversity lost
ISO 26000
PKBL
6.5. The Environment
Bantuan pelestarian
Prevention of pollution
alam
Sustainable resource use
Climate change mitigation and
adaptation
Protection of the
environment, biodiversity and
restoration of natural habitats.
6.8. Community involvement and
development
Community involvement
Copyright by AICÓN, 2015
Hubungan SDGs, ISO26000, dan PKBL
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Strategic
CSR
SOEs
Policy, Activity
!
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Community
Copyright by AICÓN, 2015
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CSR
MEASUREMENT
Copyright by AICÓN, 2015
26
CSR Measurement: Why?
“When you can measure what you are speaking
about and express it in numbers, you know
something about it; but when you cannot
measure, when you cannot express in numbers,
your knowledge is of a meagre and unsatisfactory
kind. It may be the beginnings of knowledge, but
you have scarcely, in your thoughts, advanced to
the stage of a science.” (Lord Kelvin (Liebowitz
and Suen, 2000))
“creates understanding, drives behaviour and
leads to results” (Fawcett et al., 2007)
Copyright by AICÓN, 2015
27
But, how?
People
Planet
Profit
Copyright by AICÓN, 2015
28
Environmental Valuation
1 +
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Copyright by AICÓN, 2015
29
People/Social value
Less developed concept
Complex, dynamic, context-bounded
Qualitative indicators
Copyright by AICÓN, 2015
30
Profit?
)("
Copyright by AICÓN, 2015
:
<
1 +
31
CSR: Measurement Category
Tools
Angle
Non-monetary
Public & Company
Simple
Easy to use
Relatively
comprehensive
Flexible
Widely accepted
Weakness Heterogeneous
No “bottom-line”
Strength
%
, 9:
;
Monetary
Company
Proxy
Public
“Bottom-line”
Comparison over time
Relatively objective
Easier decision making
Homogeneous
“Bottom-line”
Comparison over time
Relatively objective
Easier decision making
Easier than monetary
Partial valuation
Heterogeneous
Less flexible
Partial valuation
Rarely used (nowadays) Inflexible
Sectoral availability
Copyright by AICÓN, 2015
32
Proxy Example
=
Source: Tanaya (2007) after Brouwer et al. (1997)
Copyright by AICÓN, 2015
33
Business Language
Copyright by AICÓN, 2015
34
CSR & Business
Business language: “Risk and Return”. Increased
return or lower risk.
End-of-Pipe (“Return”):
Niche Market
Premium price (brand value)
Environment + social value
Supply chain/risk management (“Risk”):
Lower cost
Continuousness of supply
“Going Concern”: license to operate
Copyright by AICÓN, 2015
>?
Business Risk
Social
Economy
Environment
Business
Risks
Copyright by AICÓN, 2015
Strategic
Risks
Financial
Risks
Operational
Risks
Compliance
Risks
Example: Freeport
< 0
9:
;
Copyright by AICÓN, 2015
CSR Value: Risk Mitigation
Risk Register: Probabilitas & Dampak
inherent (Rp)
Peta hubungan CSR & Business Risk
Korelasi: Pre-test & post-test
Cost Benefit Analysis
Copyright by AICÓN, 2015
38
CBA: Steps of Analysis
1.
2.
3.
4.
5.
6.
7.
What is the nature of company?
Goals? [“Problem” to be solved]
Objectives?
Alternatives?
Consequences?
Value of consequences?
Certainty of consequence?
8. Outcomes compared with predictions? ⇒ Evaluation
Copyright by AICÓN, 2015
CBA: (Selected) appraisal criteria
Net Present Value (NPV)
Internal Rate of Return (IRR)
Benefit Cost Ratio (B/C ratio or BCR)
Copyright by AICÓN, 2015
!
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Copyright by AICÓN, 2015
∑
−
+
Internal Rate of Return (IRR)
∑
∑
+
8
< @<
* @*
@A 0
,
,
6
Copyright by AICÓN, 2015
+
Benefit Cost Ratio (BCR)
∑
8
< @<
* @*
@4
+
,
,
+
Copyright by AICÓN, 2015
∑
+
CSR Measurement: Simplified
Saving Dampak Inherent CSR’s Benefit
Hitung kontribusi CSR terhadap probabilitas
kejadian.
Hitung Net CSR Value berdasarkan NPV atau
IRR.
Catatan: longitudinal study membuat
perhitungan semakin baik.
Copyright by AICÓN, 2015
45
CBA: Common problems
Choice of discount rate
Treatment of secondary benefits (multiplier effect)
Treatment of government subsidies (cost recovery?)
Determination of opportunity costs
Failure to fully consider alternatives
Identification of winners and losers
Risk and uncertainty
5
Copyright by AICÓN, 2015
0
8 0
9
B;
Non-Monetary e.g.: ISO26000
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Copyright by AICÓN, 2015
*$
CSR & Project Development
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