What is ESG?
ESG which is derived from a more familiar concept of CSR (Corporate Social Responsibility), stands for Environmental, Social, and Governance. Its philosophy is that companies should take into account ESG issues when delivering financial value to their stakeholders which is characterized by sustainable, responsible and ethical investments.
Companies are increasingly required by regulators to make disclosures of ESG metrics in their Annual Report or in a standalone Sustainability Report.

What are ESG factors?
ESG factors are applicable to all industries and organizations in one way or another. They are numerous, interlinked and ever-shifting which include:

The Growing Importance of ESG Investing
ESG Investing (also known as “socially responsible investing”, “impact investing”, and “sustainable investing”) refers to investing which prioritizes ESG factors.

ESG factors are increasingly driving decisions at all levels of the economy and affecting consumer preferences and public attitudes while the financial performance of organizations is also increasingly affected by ESG factors.
Consumers are increasingly opting for more sustainable choices in their daily lives, from reusable shopping bags to plant-based meat substitutes.

Companies are factoring sustainability into their long-term investment plans, such as incorporating goals to achieve net-zero carbon emissions and reduce waste. The shift to renewable energy by industries reliant on fossil fuels will pose investment opportunities as billions of dollars are flowing into the energy transition. ESG creates significant opportunities for those at the forefront of change.

Governments around the world are making policy decisions to support and encourage the transition to a low-carbon economy.

Rating agencies are increasingly using ESG as an indicator to evaluate corporate value.

From consumers to policymakers, many economic participants are backing sustainability, and this is creating a powerful portfolio opportunity.

With ESG factors at the heart of our investment consideration, we believe that we can generate better outcomes for our society and the wider world.

We invest for a better future
To drive the implementation of ESG and Sustainability target as a part of investor’s decision-making process, the Indonesia Stock Exchange (IDX) has launched four (4) ESG based indices:
a. SRI-KEHATI
b. IDX ESG Leaders
c. ESG Sector Leaders IDX KEHATI
d. ESG Quality 45 IDX KEHATI

For details of the Indices and Constituent Stocks, please click here

For details of some of the constituents of IDX ESG Leaders which have adopted forward-looking ESG practices, please click here