International Journal of Current Science Research and Review ISSN: 2581-8341 Volume 06 Issue 01 January 2023 DOI: 10.47191/ijcsrr/V6-i1-41, Impact Factor: 5.995 IJCSRR @ 2023 www.ijcsrr.org 367 * Corresponding Author: Iqbal Bagus Alfiansyah Volume 06 Issue 01 January 2023 Available at: ijcsrr.org Page No. 367-377 Analysing CSR Practice in Regional Development Bank (Bank Pembangunan Daerah) in Indonesia: A case study and proposed solutions Iqbal Bagus Alfiansyah 1 , Neneng Nurlaela Arief 2 1, 2 School of Business and Management, Institut Teknologi Bandung, Indonesia ABSTRACT: This article discusses about the corporate social responsibility (CSR) of regional development banks ( bank pembangunan daerah or BPD) in Indonesia through a case study of a BPD in East Java province. As a company majority-owned by the local provincial government or governments, a BPD is expected to support the regional development agenda and take a role in improving the local economic welfare, including through CSR programmes, besides providing typical financial and banking services. This improves the notability of BPDs’ CSR programmes, as well as forms expectations on the programme. A suitable an d improved CSR programme is therefore necessary to allow BPDs to fulfill its role as a supporter of the local development agenda of the government. This article starts by a brief introduction on the topic of CSR and BPDs in Indonesia, literature review, identification of the issues, analysis, and finally concluded with proposed solutions in relations to the case study. The research in this paper is conducted in qualitative method. Data used for research in this paper were obtained through interviews, company reports, and observation during the author’s internship at the company. KEYWORDS: Bank pembangunan daerah, BPD, Corporate social responsibility, CSR, development agenda I. INTRODUCTION Corporate social responsibility (CSR) has become an important part of contemporary business landscape. The earliest idea of corporate responsibility was conveyed by Bowen (1953) in Social Responsibilities of the Businessman, in which he stated that corporate responsibility is derived from a moral dilemma experienced by businessmen. Their goal is to gain profit and maximise assets as much as possible. At the same time, businesses are pressured to recognise the impact of their decisions on the society. In more contemporary sources, Khan, et. al. (2012) describes CSR as a process undertaken by organisations or business in developing its actions and culture to meet social consciousness. It can therefore be defined that CSR stems from the assumption that businesses that have profited from the society should give back to the very same society, as well as meeting the interests of all involved stakeholders. As time progresses and the public becomes increasingly conscious about consumer issues and civil rights, especially during the 1960s (Carroll, 2016), CSR started to be adopted by companies from all over the world. This gave rise to international standards to standardise corporate responsibility programmes, one of which is the widely-used ISO 26000: Guidance on Social Responsibility. ISO 26000 was introduced in 2010 by the International Organization for Standardization. The standard is voluntary and non-binding, nor it is a form of certification. It acts as a guidance for companies to conduct their responsibility affairs and is divided into 7 (seven) core subjects: (1) organisational governance, (2) human rights, (3) labour practices, (4) the environment, (5) fair operating practices, (6) consumer issues, and (7) community involvement and development (ISO, n.d). In Indonesia, limited liability companies, known as perseroan terbatas, are legally obliged by Act No. 40/2007 to introduce social and economic responsibility programmes which are aimed to benefit the local community and the general public. CSR is an effective way for businesses to create value for communities. As a result, businesses may enjoy enhanced public reputation and positive impression, and eventually increase confidence on the company hence attracting new investments or business relations (Arief and Pangestu, 2021). Businesses may attract empathy from the wider public, as long as they are aware of their role in creating value for the society through CSR programmes and publicise it through the appropriate communications strategy (Arief and Pangestu, 2021). Virtually, all companies, no matter the size nor their products, are able to give back to the society and environment through social responsibility programmes (Carroll, 2016). This paper focuses on a type of financial company in Indonesia known as bank pembangunan daerah (BPD), literally ‘regional development bank’. A BPD is owned wholly or in majority by provincial