CORPORATE SOCIAL RESPONSIBILITY (CSR) AS A PILLAR OF THE WELFARE STATE: ANALYSIS OF REGULATIONS, IMPLEMENTATION, AND TRANSFORMATION TOWARDS SUSTAINABLE DEVELOPMENT IN INDONESIA

Abstract

Corporate Social Responsibility (CSR) has emerged as a vital mechanism for advancing sustainable development and reinforcing the welfare state in Indonesia. However, a significant disconnect persists between the existing legal frameworks—such as Law No. 40/2007, Government Regulation No. 47/2012, and Financial Services Authority Regulation No. 51/2017—and the practical realities of implementation, particularly in achieving socio-ecological justice. This study evaluates the effectiveness of CSR regulations in positioning corporations as active agents of development and examines the transition from philanthropic CSR models to Environmental, Social, and Governance (ESG)-driven approaches. Utilizing a normative-juridical methodology complemented by case studies, the research reveals that CSR practices remain largely short-term and charity-focused. Conversely, initiatives integrating ESG principles, such as those by PT Adaro and the “SDGs Desa” program in Bojonegoro, demonstrate more sustainable and inclusive outcomes. The study underscores the need for policy reform, fiscal incentives, and participatory governance to enhance CSR's transformative potential in fostering equitable and sustainable development.