The Influence of Corporate Social Responsibility in Supporting the Achievement of Firm Performance in The National Oil and Gas Companies of Indonesia

Abstract

The presence of companies often triggers socio-economic that can disrupt the operations of oil companies. Previous research using stakeholder theory and the social license to operate theory contextualizes that operating companies need to focus on social and environmental responsibility to reduce socio-economic conflicts in local communities. A holistic CSR perspective becomes part of the company's strategic planning and core operations so that the company will be managed in the interests of its broad stakeholders to achieve maximum economic and social value in the long term. This research was conducted to analyse of the relationship between corporate social responsibility can provide social protection and it will generate profits for the company (business reasons). Researchers analyzed the relationship between corporate social responsibility and Firm Performance in The National Oil and Gas Companies of Indonesia, Pertamina in the period 2020 - 2022. The empirical analysis was conducted using Pertamina's sustainability performance highlights database with the measure of Economic, Environment, Social and Governance (ESDG aspect). This paper supports previous research which states that corporate social responsibility may not have a positive influence on Company Performance due to the complexity of the relationship. The results of this study indicate that the complexity of the relationship caused by the implementation of Pertamina Group's social and environmental responsibility activities is part of the implementation of the strategic role as a "locomotive of social development" as a state-owned enterprise (not always for business reasons), but it also aims to improve the company's reputation and credibility.