Title : CSR Program Social Return on Investment Analysis Case Study: PT PLN Indonesia Power PLTGU Cilegon OMU

Vol 6 No 7 (2023): Volume 06 Issue 07 July 2023

Article Date Published : 15 July 2023 | Page No.: 4396-4408 | Google Scholar | Crossref doi for this article

Abstract :

Responsibility and sustainability play a larger role in the activities of global businesses. The practice of Corporate Social Responsibility (CSR) can be used to promote more responsible and sustainable behavior. PT PLN Indonesia Power PLTGU Cilegon OMU is a sub holding of an Indonesian state-owned corporation committed to fostering a responsible and sustainable culture through CSR. The old CSR program in Margasari village, the company’s first ring area, must be replaced because it has come to its exit time. Based on the Social Mapping Document 2022 and interviews, a SWOT analysis is conducted taking into account the current situation of the community. The analysis indicates that a new sewing group named Pujasari could be implemented as the new CSR program in the village of Margasari. Nevertheless, since a CSR program is a social investment, the company must be confident in the program’s future return for the community. This study aims to determine the program’s economic feasibility, Social Return on Investment (SROI) value, variables that may influence SROI achievement, and contribution to the Sustainable Development Goals (SDGs). In calculating SROI, the triple bottom line concept will be used, while the economic feasibility will use capital budgeting method. A sensitivity analysis will be conducted to determine the critical variable for achieving SROI. The study demonstrates that the calculation utilizing the triple bottom line concept (considering economic, social, and environmental benefit) over a 5-year project period yields an NPV of IDR 1,988 mio, an IRR of 109%, with a WACC of 13.349%. The program’s SROI is 20.39, indicating that for every IDR 1 invested by the company in this program, IDR 20.39 in social benefit will be generated. Analysis of sensitivity reveals that WACC, the selling price of rags, working productivity, and price of rag primary materials are, in order, the most sensitive variables affecting the project’s SROI value. In addition, the program demonstrates contribution to SDGs 1, 5, 8, 12, and 13.

Keywords :

Capital Budgeting Analysis, Corporate Social Responsibility, Social Return on Investment (SROI), Sustainable Development Goals, Triple Bottom Line

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Author's Affiliation

   Crisda Yana
School of Business Management, Institut Teknologi Bandung

   Yunieta Anny Nainggolan
School of Business Management, Institut Teknologi Bandung

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Crisda Yana, Yunieta Anny Nainggolan, 2023

This work is licenced under a Creative Commons Attribution 4.0 International License.

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CSR Program Social Return on Investment Analysis Case Study: PT PLN Indonesia Power PLTGU Cilegon OMU. https://creativecommons.org/licenses/by/4.0/, 6(7), 4396-4408. Retrieved from https://ijcsrr.org/single-view/?id=11387&pid=11006

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