CSR In Malaysia

Before we proceed to the discussion and analysis, we observed that the recent trends of developments of CSR in Malaysia are as follows:-

1. There is a need to disclose the Corporate Social Responsibility Report (CSRR) in order to have a better governance and corporate transparency;

2. The issue concerning environment has been taken into account; and

3. Child-friendly Corporate Social Responsibility shall be considered.

Through our observation and analysis, it can be said that the recent emerging trend in Malaysia, is the need of disclosure of Corporate Social Responsibility Report in order to have a better governance and corporate transparency. These can be observed through the series of initiatives which have been undertaken by the Malaysian

The Integrity Institute of Malaysia was later established in 2004 with the objective of enhancing corporate governance and business ethics standards in Malaysia. These efforts were intended to promote corporate transparency and accountability, as well as to improve the quality of life and well-being of the citizens

From the series of activities and plans undertaken by government, it is clear that the disclosure of Corporate Social Responsibility Report is one of the required measures in order to ensure that the stakeholders, community and etc. are aware of the activities done by companies and the investment done by the company. This can ensure that the interests of the stakeholders are secured.

Next, the emerging trend also includes that the issue on environment. The Malaysian Ministry of Natural Resources and Environment produced the National Policy on the Environment in 2002 which played a vital role in guiding stakeholder towards a clean, safe, healthy, and productive environment. The Department of Environment was formed responsible for preventing, controlling and abating pollution in Malaysia through implementing the Environmental Quality Act

However, there are still a few challenges that holdback the implementation of CSR. One of the challenges that have been faced is the lack of budget and financial resource that discourage the Small and medium-enterprises (SMEs) from implementing the CSR practices. Besides, the research also shows that the implementation of CSR practices require high fixed cost and as a result, increase the operation cost. For example, the acquisition of environmental friendly materials in small independent hotel is one of the factors that increase the operating cost. Additional cost incurred within the supplier selection process because minimal numbers of supplier use material that is compatible to the standard of social responsible. With these factors, it creates barrier from small business to engage with the CSR practices. Besides, the awareness of consumers on CSR practices is relatively low. With such a high fixed cost in the operation of business, the output will require a high amount too. This caused a reduction in consumer’s willingness to pay such goods or services due to the expensive