Jakarta, June 21, 2024 – Reducing greenhouse gas emissions from the industrial sector needs to be encouraged by sustainability and environmental management efforts that are measured and documented regularly. The Institute for Essential Services Reform (IESR) considers that the documentation and reporting of sustainable efforts and ecological management of industry in Indonesia needs to be a binding obligation. For this reporting system to be effective, IESR believes that the government and industry must work together to determine standards and reporting mechanisms.
Director General of Pollution Control and Environmental Damage, Ministry of Environment and Forestry (KLHK), Sigit Reliantoro, explained that his party has a Company Rating Program in Environmental Management (PROPER) as a strategy to ensure the implementation of sustainable governance.
“The advantage of participating in PROPER for companies is that they can report business activities more simply per each sector. Then, periodic reports are available per year, so that business actors know the emissions and waste produced by the business sector per year. With this periodic report, it is easier for businesses to get the database. When they have complete data, innovative steps can be taken,” Sigit explained at the workshop “Reporting and Certification of Emission Reduction Efforts by Industry” organized by IESR in collaboration with the Ministry of Industry (21/6/2024).
Until 2023, 3,694 industries are participating in PROPER, with total savings reaching 158.54 trillion.
In addition to reducing operational costs for the industry, a quality and accurate sustainability reporting system will help the government make the right decisions and policies.
Senior Analyst, IESR, Farid Wijaya, mentioned that reporting on sustainability efforts and industrial environmental management is also helpful in building business value and investor and government confidence. However, he highlighted that the critical role of the sustainability reporting system is still not optimal in Indonesia. Farid said that in 2022, based on a survey by PwC and the National University of Singapore of 50 companies in Indonesia, only 88 percent of companies submitted sustainability reports.
“The reporting system for sustainability efforts in Indonesia has not been maximized. The sustainability report is still voluntary. While on the government platform, some are required but many still do not meet the expected quality. Whereas this reporting system has a significant function for evaluation and the basis for projecting future policies and regulations,” added Farid.
IESR encourages the government and industry to strengthen the reporting mechanism of sustainability efforts and industrial environmental management in Indonesia. Three things can be done. The first is to make the reporting of sustainability efforts and industrial environmental management in Indonesia a binding obligation for all industries. Second, regulations need to be uniform and harmonized to suit the needs of the industry, including the required reporting content standards and reporting procedures, reporting periods, and verification methods related to accurate but practical report results. Third, providing an integrated platform that facilitates the needs of various ministries and government agencies maintains company confidentiality from unauthorized parties and facilitates industry reporting.
“The compliance of the industrial sector in reporting its sustainable efforts and environmental management will increase the competitiveness of the industry at the global level and open wider access to material and energy supply chains. Thus, Indonesia can advance the industry,” Farid said.
