Comprehensive CSR Report: Strategic Analysis of PETRONAS's CSR

This report provides a comprehensive analysis of PETRONAS's Corporate Social Responsibility (CSR) initiatives. It begins with an overview of PETRONAS's mission and vision statements, followed by a discussion of its CSR arm, Yayasan PETRONAS. The report delves into the strategic issues faced by the company, including human rights concerns, environmental impact, and sustainability reporting. It examines CSR as a process, exploring relevant theories and arguments, and highlights the importance of employee engagement in CSR efforts. The report also assesses the external outcomes of CSR, focusing on sustainability and its three pillars: economic growth, social growth, and environmental safety. Finally, the report underscores the importance of integrating CSR into strategic operations for effective management of challenges. The report provides insights into PETRONAS's approach to CSR and its impact on various stakeholders.

RUNNING HEAD: CORPORATE SOCIAL RESPONSIBILITY 0
Corporate Social Responsibility- PETRONAS

CORPORATE SOCIAL RESPONSIBILITY 1
Table of Contents
Introduction................................................................................................................................1
Mission statement...................................................................................................................2
Vision statement.....................................................................................................................2
PETRONAS...............................................................................................................................3
CSR Today.................................................................................................................................3
CSR as a process........................................................................................................................4
Theories & Arguments...........................................................................................................4
Strategic issues/CSR...............................................................................................................5
Employees and CSR...............................................................................................................6
CSR as an outcome....................................................................................................................7
External outcomes..................................................................................................................8
Sustainability..............................................................................................................................8
CSR for small and medium enterprises....................................................................................11
CSR and the Consumer............................................................................................................12
Conclusion................................................................................................................................13
Bibliography.............................................................................................................................13
Appendix..................................................................................................................................17
Growth in global CR reporting rates since 1993..................................................................17
CR reporting rates by sector.................................................................................................18
Six circular economy activity...............................................................................................18

CORPORATE SOCIAL RESPONSIBILITY 2
Introduction
PETRONAS is termed as the guardian of Malaysia national oil & gas resources. The
company named Petroliam Nasional Berhad, National petroleum limited (PETRONAS) was
established on 17th August in the year 1947. The company is in Malaysia and it is fully
integrated gas and oil international graded among the major organization on FORTUNE
Global 500®. The main purpose of the company is to discover, yield and deliver energy to
deal with society’s growing needs. This company is wholly owned by the government of
Malaysia (PETRONAS, 2019).
The growing need of the oil is enhancing as well as inspiring and supports company’s
resolution to develop a new solution and thrust their borders towards a sustainable energy
future. The beliefs of the company are rooted in their beliefs as their support of the business
deportment showing the sense of the duty and their accountability in upholding their pledge
towards subsidising to the well-being of the individual (Rahim, 2012).
Complete Mission statement
We are a business entity;
Petroleum is our essential business;
Main responsibility is to grow and add price to this national resources; and,
Last and final impartial is to provide to the well-being of the persons and the nation (Musa,
2013), and
Vision statement
To become an important oil and gas multinational of superior.

CORPORATE SOCIAL RESPONSIBILITY 3
There are various strategic issues in the company in relation to corporate social responsibility.
Yayasan PETRONAS is the corporate social responsibility arm of PETRONAS whose
mission is to donate towards wellbeing of society & provide sustainable impact and enhance
the quality of life and socioeconomic outcomes (Musa, 2013).
Yayasan PETRONAS is a non-profit organization limited by the guarantee. The CSR
activities of the PETRONAS are performed by the Yayasan PETRONAS foundation and for
which the company makes a financial contribution to the foundation for the sole purpose of
implementing its CSR activity (Yayasan PETRONAS, 2019).
Among various companies in the field of petrochemical industry, the professional has highly
given rank to the PETRONAS as the best in Malaysia as their company communal
responsibility.
This report will focus on strategic issues that are facing by corporation in terms of Corporate
Social Responsibility. It will also be going to give theoretical knowledge about the
sustainability and CSR outcomes.
PETRONAS
Petroliam Nasional Berhad (National Petroleum Limited) was founded in the year 1974 and it
is an oil and gas company. The key member of the company is Wan Zulkiflee Wan Ariffin,
Premier & Assembly CEO and Ahmad Nizam Salleh as Chairman. Company served across
the globe and with main business in Malaysia. The financial times has given the tag of New
Seven Sister to the PETRONAS. It is most powerful and mostly state-owned nationwide oil
and gas corporations from nations outdoor the OECD (PETROSAN, 2019).

CORPORATE SOCIAL RESPONSIBILITY 4
This company is involved in the vast range of petroleum works, comprising of upstream
investigation and manufacture of oil and air to downstream oil purifying; as well as
marketing and scattering of petroleum products.
CSR Today
On the day 1st March, PETRONAS launched a new foundation called Yayasan PETRONAS
(YP) to enhance their transparency and governance to streamline its corporate social
responsibility. This foundation was officiated by Deputy Prime Minister Dautuk seri DR
Azizah Wan Azizah Wan Ismail, and its aim is to deliver more and broader impact to their
CSR activities across the globe. The company has believed that this foundation will also be
going to improve management of the CSR programs (Ermilov, 2012).
YP focused primarily on teaching, communal wellbeing, growth, and the atmosphere.
For the teaching sector, the foundation is focus to increase the greater interest in the children
relating to the science, technology, as well as better opportunities o the unprivileged student.
In case of the wellbeing, this foundation aims to provide a standard of living to the
communities by creating the pathways for sustainable livelihood. In today era, this foundation
also focuses on the environment through biodiversity, conservation, and carbon program.
Yayasan PETRONAS aims to effectively extend what PETRONAS has done for all the
communities and the environment over four decades into greater sustainable impact and
social value (Yayasan petronas, 2019).
In the speech given by the Wan Zulkiflee said that it is pride with their approaching top 45th
anniversary that they have launched a foundation named Yasysan PETROSAN, the
philanthropic foundation that will be going to carry over the CSR initiatives around the globe
(PETROSAN, 2019).

CORPORATE SOCIAL RESPONSIBILITY 5
CSR as a process
Theories & Arguments
Yuvaraj Ganesan, Hasnah Haron, Azlan Amran and Say Keat Ooi, 2019, Corporate Social
Responsibility, state that the corporate social responsibility is grown widely in the
environment. Now days, companies are so curious for fulfilling the standards related to the
social and environmental, which results that business are now indulging in various aspects of
their business. Their research state the importance of the CSR in the companies of Malaysia.
Their results advises that main issues in journey toward broader dispersal & approval of CSR
in Malaysia include vast misperception over the mean of CSR, predominant use of CSR like
a PR tool, mandatory versus controlled CSR and role of National Mirror Committee of
ISO/TMB/WG SR in this process (Castka, 2019).
Strategic issues/CSR
1. Human rights destructions
In 2003 PETRONAS was listed in dirty list. It was started by the Burma Campaign UK, with
an aim to expose such companies, which are directly or indirectly violating human rights.
PETRONAS is linked to human right violations in Sudan (Latchem, 2012).
2. Environment/ecological obliteration
As per the cultural modification, 2008, pollution from the offshore getups results in
ecological inequities, for example, fitness and procreative problem for nearby marine lives.
As PETRONAS’s main works are offshore oil investigation and boring, its main works do
donate to the ecological queries.
3. Sustainability reporting

CORPORATE SOCIAL RESPONSIBILITY 6
In the survey which was conducted in the year 2006, named “World most Sustainable and
ethical companies” steered between 15 major oil companies, last ranked was PETRONAS. A
yearly survey was also directed in which it was reflected that the company was the world’s
least transparent corporation. However, company is improving such issues by emphasizing
more focus on its corporate social responsibility (Chong, 2015).
4. Explosion
One of the other incident which has been happened where the company had an explosion in
the pipes across the Sabah and Sarawak which cut across the dense forest. This went viral on
social media, and PETRONAS handled a crisis saying it was not aware of the situation.
These are some of the issues that tend to specify why CSR is to be the most important
concept in the present era. So in today’s society, organizations find themselves asking not
only whether to follow a CSR agenda, but how to adapt and sustain CSR. A business should
integrate CSR into strategic operations so that it can be panned and managed their difficulties
in an efficient manner.
To cope up with such issues, the company should focus on the Strategic CSR approach.
Porter and Kramer, 2006 suggested that where the association will focus on a little number of
carefully targeted CSR policies which are tightly connected to the core business aims. They
further explained that organizations would give a competitive advantage by assimilating
communal and conservation matters into their main strategy (Pathak & Tewari, 2104).
Employees and CSR
According to the Welford and Frost, 2006 the driver of the CSR shareholder comes from the
various stakeholders. These stakeholders include employees, customers and many more.

CORPORATE SOCIAL RESPONSIBILITY 7
Employees to be considered as the most important resources of the company. Various
employees can affect an organization in the number of ways depending upon their position.
In order to motivate them and engage them then, it is very important they should know about
the way their organization handles its CSR implementation. They should be well known
about the approach to the CSR. By motivating and giving them knowledge helps in develop
logic of ownership of and superiority in the firm’s CSR actions.
The PETRONAS should be dedicated to developing ability of its workers as an organization
can only do this from the individuals who work for it.”
Petron's task declaration describes that the workers are the utmost important source of a
company because their dedication and motivation are the main components, which make the
business successful. This company highly motivates and value the knowledge of the
employees. For which the company highly encourage and engage them in various programs
relating to CSR activities. CSR packages such as Sentuhan Kasih and Jalinan Insan give
permission to their workers to subsidize to houses for disadvantaged children, teenagers and
waifs in parts of their processes. All of these programs result in workers with job happiness,
which motivate them to perform better (Jye Ying, 2013).
CSR as an outcome
According to the experts, there is a perception for this company that, the CSR will be needed
the cost and time effort of the implementation. It is assumed by many individuals that CSR is
only the general concept which is not necessary to implement by the Economy. So there is a
need felt that Malaysia should have their own CSR standards which should be strictly
followed by the Malaysian and cultural. This will result in acceptance by the public. By the
implementation of the CSR, the company can achieve many benefits such as:

CORPORATE SOCIAL RESPONSIBILITY 8
The skill to have a helpful effect on the communal
This helps in supporting the free measure outcomes
It provisions being an employer of select
It helps in motivating both personal and professional growth
It improves the relationship with the customers (Jamali, 2015).
External outcomes
The external outcome of the CSR is that it will be going to help in economic development
with solving the social problem. With the implementation of the CSR in the organization,
PETRONAS can enhance their relation with communities, societies and various other social
groups.
Sustainability
This is a vast principle which is providing insights into maximum features from organization
to technology to the environment to social science. Is the procedure of people preserving the
modification in the poised environment in which misuse of sources, way of the investments,
coordination of the technical growth and official variation all are in coordination and affect
both present and future possible to see general wants and ambitions. In every field,
sustainability is mean as the given interconnected spheres such as financial social, &
environmental. Subdomain of sustainable growth is traditional, technical and administrative.
Sustainable development is the expansion, which copes up with the wants of the present
generations and not to compromise with the wants of the upcoming generations.
Walking for sustainability is one of the serious social challenges that require global and
national law, urban arrangement & transport, supply chain administration, local and distinct.

CORPORATE SOCIAL RESPONSIBILITY 9
Lifestyles and moral consumerism. Methods of living more sustainably can take many
procedures from rearranging living situation.
Sustainability is termed as humanity’s target aim of human eco-system imbalance whereas,
the term sustainable development states to the temporal processes a holistic method that leads
to the end-point of sustainability (The Star online, 2012).
The three pillars of the sustainability
Economic Growth
Social growth
Environmental Safety
Economic advancement has gone to the cutting edge since the 1980s as a vital reaction to a
scope of worldwide ecological and social issues, specifically the colossal development in the
total populace, quickening environmental change and expanding weight on assets.
Considerations were likewise focused on the social effect of the multiplication of corporate
marauders and unfriendly takeovers in the late 1980s onwards.
PETRONAS’s corporate social responsibility (CSR) actions like research in biofuel and
education are ultimate but not sufficient and sustainable. PETRONAS should take possession
of its path to be a sustainable company. There are four general suggestions for PETRONAS
to benefit it be a “sustainable corporation”. First, PETRONAS ought to take atmosphere
stewardship by taking care a three-pronged method of “finding out where and how it damages
the environment”, “mitigate and reduce the damage” and “reverse the damage”. Second, it
should start to faithfully respect human rights particularly in places it has its processes
(Kumar, 2011).

CORPORATE SOCIAL RESPONSIBILITY 10
Third, it ought to work to discovery renewable and sustainable energy sources and
technology; and inexpensive way to the consumers. Fourth, it must affect its company with
its education organizations to exploration, share and promote renewable vigour equipment
and management procedures. The key carter to all this variation will be to find the
atmosphere to where it actually belongs- as a definite investor salience model of
PETRONAS.
PETRONAS is categorized in obedience strategic proactivity stage of the sustainability phase
perfect. There are various opportunities now also to move near to the sustainability phase
(Oh, 2010).
Some of the few recommendations for the company for achieving sustainability phase are:
Respect human rights
When the company continues the processes in nations where the local government is doomed
for the human right violation same as Myanmar, then there is a requirement that PETRONAS
administration should actively commit community equity a human welfare matters.
PETRONAS should pressure the local government by using its influence to improve human
rights records which can help the corporation in becoming a sustainable corporation.
Renewable energy
PETRONAS should take care that for becoming a sustaining corporation, there is a need to
look beyond just fuels which are its revenue producer. The company should invest part of its
fuel examination and its research on other more usual and sustainable energy & technology.
Sharing expertise and funding

CORPORATE SOCIAL RESPONSIBILITY 11
PETRONAS must flexibly share its investigation on finding on sustainable machinery and
nest practice such as leadership techniques and alternative energy management and sources to
develop sustainability with organizations it is consecutively which contain university
teknologi PETRONAS (UTP), Institut Teknologi Petroleum PETRONAS (INSTEP) and
PETRONAS Organization Preparation.
CSR for small and medium enterprises
All of the corporations get benefit from the CSR, as the same for the firms of lesser medium
and dimensions. Other than small business. All company stands to advance affianced operate
and lesser long-run prices.bt, the slight business, in specific, might be absorbed in any other
welfares. It can be said as per researches; those SMEs with countless CSR policies such as
solid sustainability measure and labor practices might win more agreements from a superior
business.
SMEs are extra probable to collaborate with one alternative on CSR creativity. Contrasting
their superior associates who may tend to evade this type of support, minor trades are much
relaxed functioning with each to solve a company problem (GIVA, 2015).
According to the research of the small business, it is identified that depositors are part to the
businesses in relation to countless business nationality policies. Companies with all sizes
depend upon employee’s creativity. In the case of the small commercial, that does not have a
wide investigation and growth team then thoughtful about CSR may be a great way to
convert its commercial and goods with new ideas. It has been identified that the small
business gives limited vision and most often have limited resources in terms of their
organizational goal which aims to have profit generation. The focus of the company is on the
financial requirements rather than communal objectives because of their comparatively low