Environmental, social, and governance (ESG) is becoming a more prominent consideration in how businesses are evaluated. More companies are starting to implement ESG practices, driven by increasing expectations from investors, business partners, and regulators in day-to-day business activities.
However, not all companies are moving at the same pace. Some still view ESG implementation as something that can be addressed later.
This creates a gap between rising expectations and current practices. While the impact may not be immediate, it is often already reflected in how businesses operate. One of the most visible areas where this appears is in day-to-day operations.
The Impact of Delaying ESG Implementation
For many companies, ESG is still treated as a future initiative. However, delaying ESG implementation does not mean avoiding its impact.
Without a structured ESG approach:
- Resource usage such as energy and water may not be monitored effectively
- Waste management may be treated as routine cost rather than an area for improvement
- Internal processes may develop without clear structure or consistent oversight
Over time, these conditions can lead to inefficiencies that are difficult to identify and manage. These operational gaps often become more visible as a business grows.
ESG and Changing Market Expectations
Expectations from stakeholders are also evolving. Investors, business partners, and clients are increasingly paying attention to sustainability practices and how companies manage environmental and social aspects of their operations.
This is not always reflected as a formal requirement, but it often influences decision-making. Businesses that are not able to demonstrate ESG-related practices may face:
- Reduced competitiveness in certain markets
- Additional questions during due diligence
- Challenges in maintaining long-term business relationships
These changes tend to occur gradually, but their impact can become more visible over time.
Regulatory Developments and ESG Compliance in Indonesia
ESG-related regulations and sustainability reporting expectations are becoming more structured, including in Indonesia.
The Financial Services Authority (OJK) has introduced a Sustainable Finance Roadmap (PSPK), which outlines the gradual integration of ESG principles into the financial sector, including expectations around sustainability reporting and transparency. This roadmap is being implemented in phases, with further strengthening of ESG-related requirements targeted by 2027.
Although not all businesses are currently required to implement formal ESG reporting, the overall direction indicates increasing emphasis on transparency and accountability across sectors. Companies that delay preparation may face challenges when ESG compliance becomes more formalized, particularly in terms of data availability and internal coordination.
Early preparation allows businesses to build these elements gradually, rather than under time constraints.
Reputation and Operational Alignment
ESG is also closely linked to how a business is perceived, particularly as operational practices become more visible to external stakeholders.
Operational practices, such as environmental management, workforce conditions, and governance, can influence reputation. Inconsistent practices or lack of supporting information may create gaps between what a business communicates and what is actually implemented.
A structured ESG approach helps ensure that operations, policies, and communication are aligned.
How Moores Rowland Indonesia Can Support Your ESG Journey
Delaying ESG implementation does not necessarily result in immediate disruption. However, over time, it may lead to inefficiencies, missed opportunities, and increased pressure to adapt.
By taking early steps, businesses can better manage these risks while improving operational clarity and long-term readiness.
Moores Rowland Indonesia supports businesses through:
- ESG readiness assessments and gap analysis
- Sustainability reporting and advisory
- Governance and assurance support
Taking early steps in ESG allows businesses to build stronger operational clarity and respond to evolving expectations with greater confidence.
To understand how ESG implementation should be aligned with your business operations, please contact us:
Jakarta: contact-jakarta@moores-rowland.com
Bali: contact-bali@moores-rowland.com
