Corporate social responsibility and bank risk

The concept of sustainable banking has developed significantly in recent years. Previous research found that corporate social responsibility reduces firm risk, yet this empirical evidence refers almost exclusively to non-financial companies and it remains unclear whether the risk-mitigating effect stems from the environmental, social, or governance pillar. The paper aims to analyse the impact of corporate social responsibility activities on bank risk and to explore its determinants. Using a sample of 582 banks worldwide over the period from 2002 to 2018, we confirm a risk-reducing effect of the corporate social responsibility activity on an aggregated level. The decomposition of this effect suggests that environmental activities determine this risk mitigation. In contrast, social and governance activities do not show similarly unambiguous results. In this way, our analysis highlights the great importance of environmental aspects in banks’ risk management.

CORPORATE SOCIAL RESPONSIBILITY IN FAVOR OF IMPROVING EDUCATION IN SOCIETY (CASE OF PT PERTAMINA REFINERY UNIT VI BALONGAN)

Corporate Social Responsibility (CSR) is an external activity of a corporate undertaken for the benefit of society. It is expected to facilitate good relationship between the corporate and society. The purpose of this research is to describe Corporate Social Responsibility activity in favor of improving education in society. Research method was using an approach of qualitative descriptive in the case of PT. Pertamina Refinery Unit VI Balongan. Data was collected through conducting in-depth interview, observing, and implementing FGD. The results showed that CSR activity was very beneficial to local society as many of them were be able to continue higher education. Furthermore, local government also found out that CSR has a measurable good impact in local human development index. A long-term goal of CSR is to develop quality human resources to sustain a better life for all. Keywords: Corporate Social Responsibility, Society, Education