Nowadays, the topic of sustainability is increasingly being discussed at the global level, but the idea itself is not new. Long before the terms “sustainability” and “ESG” became the new standard, the principles of sustainability had already been integrated into the daily lives of the Indonesian people. Our ancestors practiced farming methods that maintained ecological balance. For example, crop rotation or allowing land to rest (bera) are forms of local wisdom in managing natural resources, reflecting the understanding that land, as a source of sustenance for life, must be cared for to ensure the sustainability of future generations.
This concept, which has been practiced for centuries, found its way into the modern world through the Triple Bottom Line (3P) concept introduced in the 1990s. This concept shifts the business perspective from focusing solely on Profit to adding two equally important pillars: People and Planet. Companies that apply the 3P principle are considered wise, have risk awareness, and implement business practices that are fully responsible to the environment and society in the long term.
A strong push to act together in a tangible way has emerged alongside global awareness of climate change. A significant initial step was the Kyoto Protocol in 1997, the first collective commitment to reduce greenhouse gas emissions. This momentum was renewed and significantly strengthened by the Paris Agreement in 2015, which binds nearly all nations to collectively limit global temperature rise to below 2°C. Indonesia's commitment is to reduce emissions by a significant 31.89% (through its own efforts) or 43.20% (with international support) by 2030, which now forms the basis for shaping policy direction and sustainability regulations across various sectors.
If 3P is the philosophy and the Paris Agreement is the commitment, then the Environmental, Social, and Governance (ESG) framework is the practical implementation in today's business world. ESG translates these big ideas into measurable criteria. The Environmental aspect looks at how companies manage their impact on the environment. The Social aspect assesses the company's relationship with all stakeholders (employees, customers, and the community). Meanwhile, Governance ensures that companies are run with the application of ethical behavior, transparency, accountability, and sustainability.
Today, ESG has become an essential element used by various cross-sectoral and industrial parties for the purposes of creating and updating related regulations, achieving business performance, and assessing investment viability. The implementation of ESG provides an overview of how resilient a company is in managing non-financial risks, enhancing its reputation and trust, as well as its long-term competitiveness. Business strategies that genuinely implement ESG are seen as companies committed to sustainability and responsible business practices in the long term.
The journey from local wisdom to becoming an ESG framework signifies a fundamental shift toward a more comprehensive and universally applicable framework that prioritizes the sustainability of our green planet for future generations, as this earth also belongs to them.
#BCAforsustainability.
