Materiality Analysis and CSR in Micro, Small, and Medium Enterprises

Research in the field of corporate social responsibility (CSR) has become a trending topic in recent years. Research that is often done is related to CSR disclosure, mostly for large companies. Likewise, the current standards and guidelines ignore micro, small, and medium enterprises (MSMEs). On the other hand, the MSME business sector in the world also impacts the economy, social, and environment, so CSR is needed. CSR activities and reporting cannot be separated from the concept of materiality due to a large amount of leeway in management’s discretion regarding topics and aspects. The purpose of this study is to analyze the issue of MSMEs materiality. The samples collected were 33 MSMEs. The research results show that the material issues for both sectors are similar, which are customer care and satisfaction (profit), employee rights, training and development (people), electricity consumption, and waste management (planet). The concept of materiality is expected to play an important role in MSMEs as a CSR strategy so that MSMEs can apply it to their business practices. Thus, MSMEs pay attention to profit, social, and environment, which is interpreted simply. The management of MSMEs can use this result to formulate CSR’s business strategies and apply them to their business practices. Thus, MSMEs can play a role in sustainability, which is expected to improve financial performance.