JRSSEM 2021, Vol. 01, No. 4, 439 – 446
E-ISSN: 2807 - 6311, P-ISSN: 2807 - 6494
DOI : 10.36418/jrssem.v1i4.32 https://jrssem.publikasiindonesia.id/index.php/jrssem/index
IMPLEMENTATION OF SUSTAINABLE FINANCE AND
ENVIRONMENT
Winona Bianda Callista
1*
Choirul Anwar
2
Hafifah Nasution
3
1,2,3
Accountancy Department, State University of Jakarta, Indonesia
e-mail: winonabiandacal[email protected]
1
2
,
3
*Correspondence: winonabiandacallista@gmail.com
Submitted: 1 November 2021, Revised: 10 November 2021, Accepted: 14 November 2021
Abstract. This study aims to determine management's perception of strategy in implementing
sustainable finance and environment in related companies. This study uses primary data with
phenomenological research methods obtained through interviews, documentation, and analysis of
the content of sustainability reports to obtain more detailed information. The subject of this
research is the management of a construction company in Indonesia. The result of this research is
the implementation to achieve sustainable finance is by budgeting for investment by considering
environmental, social, and governance factors. Implementation of sustainable finance as a
component of green finance that aims to support balanced economic growth. The implementation
of a sustainable environment along with the company's social aspects is summarized in the K3L
(Health, Occupational Safety, and Environment) policy. The company also has a special budget for
sustainability programs and strategies on social and environmental issues.
Keywords: management; sustainability reporting; sustainable finance; sustainable
environment; manager's perception.
Winona Bianda Callista, Choirul Anwar, Hafifah Nasution | 440
DOI : 10.36418/jrssem.v1i4.32 https://jrssem.publikasiindonesia.id/index.php/jrssem/index
INTRODUCTION
Problems regarding the financial,
environmental and social aspects of the
company are not enough if they are only
presented in the company's financial
statements. According to (Tjandra, 2021),
the financial statements presented by the
company are no longer seen as sufficient as
a reference for information in making
decision making. The information in the
financial statements is seen as very limited
and unable to provide a sufficient picture in
seeing the company's prospects in the
future. Business continuity is not only seen
from the profits at the time the financial
statements are published, but also from the
various efforts made by the company in
establishing good cooperation with various
existing stakeholders. Therefore, a report
that describes the company from various
perspectives other than financial
statements is increasingly needed (Siregar,
Prayoga, & Sudarmaji, 2019). The report in
question is a sustainability report or
sustainability report.
According to (Otoritas Jasa Keuangan,
2017), a sustainability report is a form of
report carried out by companies in order to
disclose or provide information to all
stakeholders related to the performance of
Environmental, Social, and Good
Governance (LST) in an accountable
manner. To support the company's
sustainability, it is necessary to implement
sustainable finance that refers to OJK
Regulation No. 51/ POJK 03/2017
concerning the Implementation of
Sustainable Finance for Financial Services
Institutions, Issuers, and Public Companies.
In implementing the OJK mandate,
companies must prepare work priorities
and strategies to achieve sustainability.
Finance (sustainable finance) is part of a
sustainability report which is the financial
industry practices that promote sustainable
growth by aligning economic, social, and
environmental (Otoritas Jasa Keuangan,
2017).
The magnitude of the role of disclosure
of additional company information such as
sustainability reports is as one of the
company's communication media with
stakeholders. Although the types of
disclosure in Indonesia are increasingly
diverse, from internet media, websites
company, social media, financial reports,
and profiling company, sustainability
report has own added value, because it
describes the company's concern and
predicts how the company will be in the
future (Aldi & Djakman, 2020). By
publishing a sustainability report, the
company has also shown its seriousness in
maintaining environmental balance and
sustainability, minimizing social inequality,
and economic prosperity.
The concept of corporate sustainability
refers to the ability of a company to use its
limited resources effectively and efficiently
over time where waste of resources can be
reduced and this practice is implemented
properly (Shad et al., 2019). The previous
research conducted by Farooq & de Villiers
(2019) aims to explore how sustainability
reporting managers institutionalize
sustainability reporting in organizations.
The result of the study states that managers
play a key role with the Key Performance
Index (KPI) which describes the company’s
effectiveness in achieving business goals,
which is integrated with planning,
441 | Implementation of Sustainable Finance and Environment
performance measurement, and risk
management processes in order to
institutionalize sustainability reporting
within the organization by carrying out
institutional work. It can be categorized
into four stages. Each stage takes into
various approaches that organizations
adopt to prepare corporate sustainability
reports (including how they conduct
materiality assessments and stakeholder
engagement).
In implementing sustainability, the
performance of the 3-P pillars or triple
bottom line, namely Profit (economic
aspect), People (social aspect), and Planet
(environmental aspect) must work in
harmony. Refers to the economic aspect of
the 3-P, namely economic prosperity by
generating profits, achieving competitive
advantage and sustaining the overall
economic value of the business. In the 3-P
environmental aspect, environmental
sustainability includes factors related to
environmental quality such as climate
change, global warming, pollution, and
depletion of the ozone layer. While the 3-P
social aspect includes issues related to
social progress such as health, safety,
welfare, job opportunities, charity, and
organizational behavior (Aras et al., 2018).
For companies that focus on
sustainability, they need to ensure that
their business can manage business risks
and meet stakeholder expectations.
Companies or organizations that seek to
conduct business while being socially and
environmentally responsible should try to
place the dominant sustainability
management framework in predicting
organizational performance (Maletič et al.,
2018). So this analysis is to assess and see
the suitability of the implementation of the
sustainability report made by the company
based on the company's real activities.
This research briefly intend to get to know
the strategies which is planned by the
managers as key role and identify the
sustainable implementation within finance
and environmental matter.
METHODS
The approach used in this study is a
qualitative phenomenological approach.
Phenomenology is an approach that was
started by Edmund Hussert in 1920 and
developed by Martin Heidegger in 1927 to
understand or study the experience of
human life (Zahavi, 2018). Phenomenology
is an approach that focuses more on the
concept of a particular phenomenon and
the form of its study is to see and
understand the meaning of an experience
related to a particular phenomenon
(Helaluddin, 2018). The general focus of
this research is to examine or examine the
essence or structure of experience into
human consciousness and is associated
with the phenomena that occur (Tuffour,
2017). To strengthen the
phenomenological qualitative approach,
this study uses primary data obtained from
interviews with the company's
management to obtain managers'
perceptions, documentation of
sustainability reports regarding things
needed in this research, including the
economic aspects of the company to see
the implementation of sustainable finance
and environmental aspects to assess the
extent to which the company that is the
subject of research implements a
Winona Bianda Callista, Choirul Anwar, Hafifah Nasution | 442
sustainable environment in order to
achieve sustainable development, the
company's sustainability report is obtained
from the official website of the company
concerned. The reason for choosing
informants, namely managers, is because
they are part of the support for making
sustainability reports because managers
act as agents as has been determined in
agency theory, so that the performance
and thoughts of managers are crucial to
achieve sustainable development
(Rudyanto & Siregar, 2018). Managers who
were used as informants for this study were
financial accounting managers and QHSE
(Quality, Health Safety, and Environment)
managers because they were directly
related to financial and environmental
sustainability, which were the subject of this
research. Data analysis techniques used in
this research are data reduction, data
presentation, and content analysis.
RESULTS AND DISCUSSION
Sustainable growth results from the
alignment between the interests of
economic, social, and environmental
performance. To support the economic
performance of the company, it is
necessary to implement sustainable
finance. The definition of sustainable
finance in Indonesia is defined as the
company's overall support for sustainable
growth resulting from the alignment of
economic, social and environmental
interests. According to (Otoritas Jasa
Keuangan, 2017), the implementation of
sustainable finance has the aim of
increasing the company's resilience and
competitiveness so that it is able to grow
and develop sustainably, providing funding
sources needed by the community
referring to the Long-Term Development
Plan (RPJP) and Medium-Term
Development Plan (RPJM) which are
characterized by 3Ps. , as well as
contributing to the national commitment
to global warming through business
activities that are prevention/mitigation as
well as adaptation to climate change
towards a competitive low-carbon
economy. The goal is to improve the quality
of the company so that it can grow and
develop stably and for long term.
The implementation of sustainable
finance certainly has several general
functions, namely reducing social
inequality, reducing and preventing
environmental damage, maintaining
biodiversity, and encouraging efficient use
of energy and natural resources. Since the
regulation regarding the implementation
of sustainable finance for Financial Service
Institutions, Issuers, and Public Companies
was issued by (Otoritas Jasa Keuangan,
2017), namely POJK Number
51/POJK.03/2017, the companies studied
have implemented sustainable finance in
sustainability reports after the regulation
was published until now. The
implementation of sustainable finance is
actually a development of the concept of
sustainability that has been carried out by
the company before, namely the triple
bottom line or 3P (profit, people, and
planet). The goal is to improve the quality
of the company so that it can grow and
develop stably and in the long term.
Based on the results of interviews with
the company's accounting and finance
managers, sustainable finance is the
443 | Implementation of Sustainable Finance and Environment
company's implementation to keep
financial statements running according to
existing regulations, starting with keeping
the reports transparent, accountable, and
presented in accordance with the
Statement of Financial Accounting
Standards (PSAK). Because this company is
a public company, reporting must be
informed openly and as widely as possible
to both the public and the government.
Furthermore, the principles of Good
Corporate Governance (GCG) must be
applied in funding activities, from the most
basic through the application of the
company's vision and mission in every
company activity to social responsibility
(Soelton et al., 2020). In addition, the
company must also manage cash flow well
and be able to contribute to stakeholders,
cash flow management is one of the key
components of the company's financial
stability. The benefits of cash management
are that it makes it easier for companies to
carry out various business transactions as
well as monitoring the transactions carried
out, minimizing the possibility of risks that
may occur in each transaction, and all
financial transactions can be structured and
controlled (Santioso et al., 2021).
Furthermore, for the company's
sustainability implementation for
environmental aspects, one of them is by
having and implementing K3L (Health,
Occupational Safety, and Environment)
policies. The policy implies a commitment
to assisting the community in finding
answers to all problems related to meeting
the needs of the community in the area
around the company's project operations
and future generations. It aims to create
independence and quality of life for the
community. By continuing to apply high
standards of safety, occupational safety,
environment, and public health as well as
establishing partnerships with the
government and local communities, the
company is simultaneously trying and
creating sustainable development in the
economic, environmental and social fields
in the long term (Caesaria & Basuki, 2017).
In carrying out business activities, the
company makes efforts to preserve the
environment and empower the
community's capabilities. The commitment
to preserving the environment is realized
through the provision of a special budget
for financing various environmental
conservation programs and activities. In
addition, the company also carries out
energy savings, water management,
emission control, waste management (B3
and non-B3), implementing Go Green
Construction, restoration and protection of
habitats (Aniela, 2012).
The company's efforts to save energy
are by making efficient use of electrical
energy, replacing fuel oil with gas fuel, and
utilizing solar panels to generate electricity
which is then used as lighting. Water
management is carried out by the company
by utilizing and optimizing efforts to
maintain the availability of water sources.
For the process of working on projects that
require water, land for projects in the
regions and using PDAM for projects in
urban areas. Water intake and utilization is
carried out with regular supervision.
Furthermore, to be able to control
emissions, what the company does is to
plant trambesi trees which are very useful
for absorbing carbon gas emissions and
carry out regular emission measurements,
Winona Bianda Callista, Choirul Anwar, Hafifah Nasution | 444
either directly or indirectly. Meanwhile,
waste management is regulated according
to the type of waste generated. There are
three types of waste produced by this
company, namely non-B3 liquid waste
which will be channeled into city drainage
channels, non-B3 solid waste which will be
separated according to the type between
organic and inorganic which will then be
submitted to the local Sanitation Service
and for metal waste will be submitted to
special collectors of metal waste and B3
waste which will be handled by storing
them in special containers or drums
equipped with symbols and tables before
being temporarily stored and then handed
over to collectors who have permits. For the
project concept with a green perspective,
the company always pays attention to
Environmental Impact Analysis (AMDAL) in
every project implementation. In
Government Regulation No. 27 of 1999
concerning Environmental Impact Analysis,
it is stated that AMDAL is a study about
major and important impacts for decision-
making of planned business or activity on
the environment that is required for the
decision-making process regarding the
implementation of the business. AMDAL is
a study of both the positive and negative
impacts of planned activity or project,
which is used by the government in
deciding whether an activity or project is
environmentally appropriate or not and
AMDAL as a scientific analysis, regarding
predictions on the environment as stated
by (Laia, 2021). The positive and negative
impact studies are usually prepared by
considering the physical, chemical,
biological, socio-economic, socio-
economic, socio-cultural, and public health
aspects.
And for the last point, namely habitat
restoration and protection, the company
carries out environmental conservation on
barren land, reforestation or replanting,
adds water catchment areas, and opens
green space for the surrounding
environment.
CONCLUSIONS
To achieve sustainable growth, the
company implements sustainable finance
that can improve the quality of the
company so that it can grow and develop
stably in the long term. The company has
implemented sustainable finance since the
OJK regulations were issued and is still
ongoing today. What is being done for
sustainable finance is to maintain financial
reports so that they are always transparent,
accountable, presented in accordance with
PSAK, as well as budgeting costs for
sustainability programs that will balance
economic, environmental and social
aspects. In addition, the principles of GCG
must be applied in funding activities, cash
flow management must also be carried out
by the company, and be able to make a
positive contribution to stakeholders.
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© 2021 by the authors. Submitted
for possible open accesspublication
under the terms and conditions of the Creative
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