Sustainability Management and Reporting

Sustainability Report has became a requirement for financial service, listed and public companies in Indonesia based on the Regulation of Financial Services Authority No. 51/Pojk.03/2017 on Application of Sustainable Finance to Financial Services Institution, Issuer and Publicly Listed Companies. Mandatory for issuing Sustainability Report that will effectively be applied in 2019 and after, shall be made for the period of 2018. It will be easier for a company to follow the regulation if the various components in the supply chain start systematically collecting and reporting on their sustainability impacts Report as well. Moreover, in the future, the regulation will possibly be extended and applied for non-listed companies as has been the case for example in the EU.

A key approach for companies to mitigate the risks is therefore not only to collect their own data on sustainability issues ranging from CO2 emissions to waste water management, but also to request sustainability information from suppliers as they too are part of a company’s sustainability footprint and endeavors. Dell for example has required that all its suppliers issue sustainability report and ENEL has recently started piloting this in Peru through a partnership with GRI.

However, many companies do not have the knowledge or the tools to comply with such information requests in a structured way. It is a fact that currently only around 5% of sustainability reports worldwide are issued by SMEs. One of the main reasons for this low uptake is that the short-term business case for sustainability reporting is not clear to all companies, let alone SMEs. They (the supply chain) tend to see this as a compliance requirement rather than a strategic business practice that can directly benefit their companies. Therefore, IBCSD also encourages the supply chain to have Sustainability Report (SR).

IBCSD in collaboration with Global Reporting Initiative (GRI) are engaged on Corporate Sustainability Management and Reporting for Competitive Business Program (CSRCB), a global training program helping large companies increase the transparency in their value chain while enhancing their ability to report on their own sustainability impacts and measures.

By taking part in the CSRCB Program, large companies are given a unique opportunity to work with their often SME suppliers to help them understand how sustainable and responsible business conduct can be beneficial for them. At the same time, this helps them to gain access to the information they need from their suppliers in a uniform format.

"Pursuing sustainable development makes companies more competitive, more resilient and adaptable in a fast-changing world, and more prepare for the future."