A TRUSTED SOURCE OF ESG INSIGHT FOR GLOBAL STAKEHOLDERS
Understanding ESG developments in Indonesia is becoming increasingly important for global businesses and stakeholders. As regulatory expectations evolve and sustainability reporting gains momentum, organizations require reliable, structured insights to navigate this complexity.
Insights presented by Moores Rowland Indonesia, in collaboration with Foundation for International Human Rights Reporting Standards (FIHRRST), at the Praxity ESG Working Group provide a clear perspective on these developments.
This spotlight reflects Indonesia’s growing importance in the global ESG landscape and positions the country as both a compliance-driven and opportunity-rich market.
REGULATORY EVOLUTION: FROM COMPLIANCE TO STRATEGY
At the global level, the GRI Standards have long served as a leading framework for sustainability reporting and have been widely adopted by companies worldwide, including those in Indonesia. Meanwhile, IFRS S1 and IFRS S2 are relatively new standards that are increasingly being adopted by organizations seeking to meet investor-focused sustainability disclosure requirements and provide greater transparency regarding sustainability-related risks and opportunities that may affect enterprise value.
These developments demonstrate that ESG should no longer be viewed solely as a reporting obligation. Instead, it should be recognized as an integrated component of business strategy, supporting long-term value creation, risk management, and stakeholder trust.
In Indonesia, the ESG regulatory landscape continues to evolve with an increasing emphasis on transparency and structured sustainability disclosures. POJK 51/2017 and the IDX ESG Metrics currently serve as key references for companies preparing sustainability reports, particularly publicly listed entities. In addition, the issuance of Financial Sustainability Reporting Standards (PSPK) 1 and PSPK 2, which will become effective on 1 January 2027, represents a significant milestone in Indonesia’s adoption of sustainability reporting standards aligned with IFRS S1 and IFRS S2.
ESG IMPLEMENTATION: FROM THEORY TO PRACTICE
The combined application of the GRI Standards and IFRS S1 & S2 enables organizations to assess sustainability issues from two complementary perspectives: the company’s impact on the environment and society (impact materiality), and the impact of sustainability-related issues on business performance and enterprise value (financial materiality). This integrated approach allows companies to implement the concept of double materiality more comprehensively when identifying, managing, and disclosing ESG-related matters.
Effective ESG implementation requires more than reporting, it demands integrated services and execution. In practice, effective ESG implementation goes beyond reporting. It requires integrated processes, reliable data management, and active stakeholder engagement.
Practical implementation experiences have demonstrated the value of this approach. Companies embarking on their ESG journey, for example, can successfully prepare sustainability reports aligned with POJK requirements and the GRI Standards through structured materiality assessments and systematic data management. Furthermore, effective stakeholder engagement helps organizations proactively identify and manage social risks while enhancing the quality, credibility, and transparency of sustainability disclosures.
TECHNOLOGY AND AI ARE RESHAPING ESG PRACTICES
Digital transformation is accelerating ESG adoption across Indonesia. AI-driven tools and platforms are now being piloted to analyze and rank sustainability reports, improving efficiency while maintaining human oversight.
This integration signals a broader shift: ESG is becoming data-driven, scalable, and increasingly embedded into corporate systems.
KEY TAKEAWAYS FOR PRAXITY MEMBERS: INDONESIA’S ESG EVOLUTION
Indonesia’s ESG journey offers clear strategic insights for Praxity members and their clients:
- ESG is transitioning from voluntary disclosure to mandatory compliance
- Climate and transition risks are now financial risks
- Human rights and supply chain due diligence are gaining prominence
- ESG assurance and independent verification are growing rapidly
- Digitalization and AI are shaping future ESG monitoring
Ultimately, the Praxity ESG Working Group spotlight positions Indonesia as a crucial ESG market, where regulatory alignment, technological adoption, and strategic advisory intersect to create long-term business value.
TAKE THE NEXT STEP IN YOUR ESG JOURNEY
Moores Rowland Indonesia, in collaboration with the Foundation for International Human Rights Reporting Standards (FIHRRST), delivers end-to-end ESG solutions, from reporting and data management to independent assurance.
Ready to strengthen your ESG framework? Contact our team today to start building a more credible and future-ready reporting approach.
