In recent years, many companies in Indonesia have begun to include sustainability reports as part of their annual disclosures. The Indonesian government has also introduced regulations requiring publicly listed companies and issuers to report on their sustainability performance, one of the example is OJK Regulation No. 51 of 2017. But what exactly is a sustainability report?
Sustainability reporting is the practice of disclosing a company’s economic, social, and environmental impacts. Unlike traditional financial reports that focus solely on profit and performance, sustainability reporting highlights how an organization contributes to sustainable development and how its operations affect people and the planet. Globally, these reports often follow established frameworks such as the Global Reporting Initiative (GRI) or the International Sustainability Standards Board (ISSB), which aim to improve transparency and accountability across industries.
Why Sustainability Reporting Matters?
The urgency of sustainability reporting has grown alongside global awareness of climate change, inequality, and resource depletion. Today, businesses are expected not only to generate profits but also to ensure the long-term sustainability of the resources they depend on. Many countries, especially in Europe and North America, have started to require large companies to disclose their sustainability performance as part of their regulatory obligations.
This kind of reporting acts as a transparency mechanism, allowing investors, policymakers, and the public to evaluate whether a company is operating responsibly and in alignment with Environmental, Social, and Governance (ESG) principles. By sharing their long-term goals, environmental policies, and social initiatives, companies are encouraged to make decisions that are more ethical, transparent, and future-oriented.
Benefits for Companies and Society
For companies, sustainability reporting offers both strategic and operational advantages. It strengthens corporate reputation, builds public trust, and attracts investors interested in sustainable or green portfolios. It can also help businesses identify risks and opportunities, reduce inefficiencies, and improve long-term resilience.
Internally, the reporting process allows management to assess how effectively sustainability initiatives are being implemented. Collecting and analyzing structured data helps identify areas that need improvement and ensures a better balance between profit goals and social responsibility. For society at large, sustainability reports enhance corporate accountability, giving stakeholders a clearer picture of how businesses affect communities and the environment.
Despite its growing importance, sustainability reporting comes with several challenges. Many companies still struggle to determine which indicators best measure their environmental and social impacts. The variety of reporting frameworks and formats also makes it difficult to compare reports across industries.
Another major challenge lies in ensuring that reports reflect genuine efforts rather than serving as mere marketing tools. For this reason, improving the quality of external verification and harmonizing global reporting standards are key to strengthening the credibility and usefulness of sustainability disclosures. In the near future, sustainability reporting will no longer be optional, it will become a core part of corporate strategy worldwide.
As consumers, regulators, and investors grow increasingly aware of sustainability issues, companies that embrace transparency will have a competitive advantage. By producing reliable, accurate, and accessible sustainability reports, organizations can demonstrate real commitment to sustainable growth and play an active role in driving the transition toward a greener and more equitable global economy. Sustainability reporting is not just an obligation, but a concrete manifestation of a commitment to a greener future.
Through transparent and measurable reporting, companies can demonstrate environmental responsibility while increasing investor and public confidence. International standards such as Verra and GRI help ensure every step of your business aligns with global sustainability principles.
However, preparing an accurate and credible report requires expertise in data analysis, impact assessment, and proper documentation. IML Carbon’s team of experts is ready to help you design a sustainability report that meets these standards and strengthens your company’s position in the transition to a green economy. Begin your journey to a competitive and responsible business with professional guidance from IML Carbon.
Author: Ainur Subhan
Editor: Sabilla Reza
References:
Herzig, C., & Schaltegger, S. (2011). Corporate sustainability reporting. In J. Godemann & G. Michelsen (Eds.), Sustainability Communication: Interdisciplinary Perspectives and Theoretical Foundations (pp. 151–164). Springer.
Kolk, A. (2005). Sustainability reporting. VBA Journaal, 21(3), 34–42.
Wagenhofer, A. (2024). Sustainability reporting: A financial reporting perspective. Accounting in Europe, 21(1), 1–13. https://doi.org/10.1080/17449480.2023.2218398