Proceedings of 29th International Business Research Conference
24 - 25 November 2014, Novotel Hotel Sydney Central, Sydney, Australia, ISBN: 978-1-922069-64-1
The Relationship between Economic, Social and Environmental Factors
with CSR Index: An Empirical Study of Palm Oil Mills in Malaysia
Kamisan Gadar1, Khor Siak Kim2 and Shafie Sidek3
In line with the vision 2020 and Palm Oil NKEAs 2011, Malaysian government has voiced out the concern for
the palm oil mills to be more socially and environmentally responsible. Because of that, sustainability has
become the cornerstone of all sectors and the palm oil industry is no exception. Corporate social responsibility
(CSR) is paramount for a corporation’s triple bottom line (TBL); namely profit, people and planet. Meantime,
CSR index (CSRI) has been widely used to measure and assess the extent to which a corporation has been
socially and environmentally responsible in its business transactions with the stakeholders. Therefore, the
main objective of this research is to investigate the relationship between economic, social and environmental
factors with CSR index of palm oil mills in Malaysia by adapting Kanji–Chopra CSR model (KCCSRM, 2010).
Besides, this study also compares the different of mean CSR index between public and private palm oil mills in
Malaysia. Structured questionnaire was used as research instrument to collect the data related to the
relationship between economic, social and environmental factors with CSR index. The questionnaires were
mailed to 400 palm oil mills based on a list provided by Malaysian Palm Oil Board (MPOB) using simple
random sampling. There were 240 palm oil mills responded to this research study and the respond rate was
60%. The findings showed that there is a significant relationship between economic, social and environmental
factors with CSR index of palm oil mills in Malaysia. Besides, the results of t-test revealed that there is a
significant different of mean CSR index between public and private palm oil mills. Furthermore, the results of
regression analysis showed that economic factor ( = 0.294) is the most important factor influencing CSR
index, followed by environmental factor ( = 0.276) and social factor ( = 0.178) respectively. Therefore, this
study suggests that there is a need to increase the awareness of CSR and sustainability issues amongst the
palm oil mills in Malaysia towards greener environment and better societal wellbeing.
Keywords: Corporate Social Responsibility (CSR), CSR Index (CSRI), Triple Bottom Lines (TBL), Economic
Factor, Social Factor, Environmental Factor.
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1
Assoc Prof Dr. Kamisan Gadar , Head of Economics, Business School, Universiti Kuala Lumpur, Malaysia.
2
Khor Siak Kim , PhD Candidate, Business School, Universiti Kuala Lumpur, Malaysia.
3
Dr. Shafie Sidek , Faculty of Economics and Management, Universiti Putra Malaysia, Malaysia.