Page 142 - SUSTAINABILITY ISSUES & COVID-19

21 Sustainability Officer in Indonesian

Listed State-owned Enterprises:

From the Investor’s View Point

Elvia Ivada, Hasan Fauzi

ABSTRACT
PURPOSE

The purpose of this study is to identify Indonesian listed State-owned Enterprises (SOE) which have officers with
sustainability name in their position title or a synonym of sustainability such as CSR or environment. Furthermore,
this study intends to determine whether specific companies that have sustainability officer (SO) are more likely to be
included in the Indonesian Sustainability Responsible Investment index, namely SRI-Kehati index

STUDY DESIGN/METHODOLOGY/APPROACH

Following the work of Strand (2013), this study conducts the same method with some modifications. Firstly, the
recent study not only uses the corporate website as a data source but also employs the company’s annual report.
Secondly, while the previous study used the data from Scandinavian and US corporations, this study employs
Indonesian corporations’ data, especially SOE, which is listed on the Indonesian Stock Exchange. Thirdly, this study
applies the Sri Kehati Index, a Sustainable and Responsible Investment index developed by the Kehati Foundation
and published by the Indonesian Stock Exchange. Statistical analysis using a one-tailed t-test is then conducted to
determine whether companies that hire sustainability officers are more likely to be included in the index.

FINDINGS

The result shows that some of the listed SOEs have already administered the SO in their organizational structure.
Further, companies that are more likely to exist in Sri Kehati index are they which employ SO—implying that the
presence of SO provides a good impact for a company from an investor’s perspective.

ORIGINALITY/VALUE
Based on the author’s knowledge, this study is among the first to examine the existence of SO in Indonesian SOE and
to investigate the impact of SO presence on the inclusion in the SRI index.

Keywords
Sustainability Officer, Indonesia State-owned Enterprises, Sustainability Responsible Investment Index, SRI-Kehati

JEL Classification
M14

1. INTRODUCTION

After the publication of the Brundtland Report in 1987 (WCED, 1987), which focused awareness on the need for
immediate action to reverse the declining trend of global environmental degradation and growing poverty (McChesney,
1991), the idea of sustainable development has come to direct the pursuit of environmental change by both public and
private organizations and to promote cooperation between actors from different societies (Boström, 2012). Over the
last few years, a growing number of businesses organizations have engaged in a variety of sustainability action (Miller
& Serafeim, 2014).

An evolving debate is how business sectors or companies contribute to this aim, which has resulted in a range of
terms such as ‘corporate sustainability’ and ‘corporate environmental responsibility,’ as well as a plethora of initiatives to
monitor progress towards corporate sustainability (Atkinson, 2000). Sustainability strategy of the firm is monitored by
corporate sustainability officer (CSO) who has the main responsibility to oversee the sustainability strategy (Kanashiro

International Conference on Sustainability 141
(5 Sustainability Practitioner Conference)
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