Memahami ESG Practice Model:

The Triple I Framework

Sustainability Intention, Integration, and
Implementation

Corporate Sustainability Management

Dr. Idrianita Anis, SE, Ak, Mkom, CA, CPMA,CPIA
 Mencapai 17 SDGs dengan “Strong Sustainability”

STRONG SUSTAINABILITY APPROACH

The Gap Frame country performance using the lowest score assessment - with darker colors signaling a
higher urgency for action to ensure that we advance towards a globally safe space (www.gapframe.org).
 Analisis Gap Frame “National Sustainability”

Spectrum of Social Politic of Sustainability Change

(Gray, 2006; Hopwood et al., 2005)

L1. Mereka yang meyakini perubahan terjadi pada

struktur yang ada - STATUS QUO APPROACH

L2. Mereka yang mengakui kebutuhan perubahan

bisnis dan kebijakan pemerintah, tetapi menganggap
sbg hal mendesak – REFORMATION APPROACH

L3. Mereka yang mengakui reformasi sistem dan struktur saat ini tidak mencukupi untuk
mengatasi krisis. Diperlukan “strong sustainability” – TRANFORMATION APPROACH
Gap Frame Score Indonesia (2018)
 Climate Change Risk

TRANSITION RISK

POLICY & LEGAL: Pembatasan

tindakan untuk memitigasi dampak
buruk perubahan iklim, dan mendorong
upaya adaptasi

TECHNOLOGY: Inovasi teknologi yang

mendukung transisi ke sistem ekonomi
rendah karbon akan berpengaruh
terhadap organisasi dalam bentuk
keuntungan atau kerugian tergantung
atas cara beradaptasi.

MARKET: Pergeseran supply &

demand karena ketidakpastian yang
memproduksi dan yang akan membeli
barang dan jasa. PHYSICAL RISKS
ACUTE: Dipicu oleh peristiwa, termasuk meningkatnya intensitas kejadian cuaca ekstrem, seperti
REPUTATION: Perubahan persepsi badai siklon, topan, atau banjir.
pelanggan, masyarakat thd kontribusi
organisasi dalam transisi ke sistem CRONIC: Pergeseran perubahan pola iklim jangka panjang (Suhu yang terus-menerus lebih tinggi)
ekonomi rencah karbon. dapat menyebabkan kenaikan permukaan laut atau gelombang panas kronis.
 Milestone
National Policy to
define
Sustainability,
Sustainability Risk
& Corporate
Sustainability
Performance
Sustainability Reporting Landscape
 BAGIAN IV
What’s Wrong with Sustainability?
CSR, [CG, GRC ESG Practice]

Social Responsibility of Business is to Increase It’s Profit

Social Responsibility of Businesman (Howard Bowen, 1954) (Milton Friedman, 1962)
 What’s Wrong with Sustainability?
CSR, [CG, GRC ESG Practice]
The assumption of the Shareholder Wealth Maximization (SWM) paradigm are No Longer Valid
(Weiner & Stoner, 2018)
(1) Shareholders pemilik perusahaan, (2) Capital sumberdaya langka, Dunia memiliki sumberdaya berlimpah, (3) Pasar modal
efisien, (4) Manusia bersifat rasional, (5) Transaksi suka rela berdampak positif bagi semua pihak, (6) Kegiatan bisnis
berdampak positif lingkungan, k u l t u r m a s ya r a k a n d a n k e a d i l a n s o s i a l , ( 7 ) P e m e r i n t a h s e l a l u
m enet apk an per at ur an a t a u r eg u l a s i ya n g t e p a t , ( 8 ) K e s u k s e s a n f i n a n s i a l s a m a d e n g a n
k e s e k s e s a n m as yar ak at s e c a r a k e s e l u r u h a n, ( 9 ) U p a ya m e m a k s i m u m k a n k e k a ya a a n p e m e g a n g
s a h a m m em bawa k e s u k s e s a n f i n a n s i a l , ( 1 0 ) O r g a n i s a s i s e c a r a l e g a l h a r u s m e n d u k u n g S W M.

Stakeholders Orientation is on the way to being established - The future fit foundation
(Elkington, 2020; Freeman, 1984; Khun, 1962)
KOTTER’s EIGHT STEPs to CHANGE
SUSTAINABILITY BLUNDER (Doppelt, 2003)
❑ Monetary
1. Patriarchal thinking Crisis in Asian
2. A “silo” approach in management Countries
system (1997/1998)
3. No clear vision of sustainability ❑ Global Crisis
4. Confusion over cause and effect 2008/2009
5. Lack of information ❑ Pandemic
6. Insufficient mechanism of learning COVID-19
7. Failure to institutionalize sustainability Crisis 2019-
WEAK BUSINESS’ FUNDAMENTAL 2022
 Theoretical Framework

Sources: Williamson, 1999; 2000; 2002; Teece et al., 1997; Teece, 2007; Roger, 1984; Folke, ;
Armitage et al., 2007; Folke, 2007; Roger, 2004; Ostrom, 1990; 2005; 2009
 Conceptual Framework

Social Responsibility, Business Business Strategy Formulation, SPMS- Industrial Revolution 4.0; Busines in ESG Practice Model
Strategy, Transaction Cost BSC, MCS-LoC, Gov Risk Compliance, Society 5.0; COSO-ERM; Creating (Sustainability Innovation at
Economy (1937 – 1990) Perf Mgt System (1990– 2005) Shared Value (2006-2015) Corporate Level – (Diatas 2015)
 Undertanding Business as Usual

• Resource / Facility
Management Cycle
• HRD & Payroll Cycle
• Procurement Cycle
• Investing & Financing Cycle

GENERAL LEDGER &

REPORTING CYCLE

Purchasing Production Sales (Revenule)

(Expenditure) Cycle (Conversion) Cycle Cycle

ACCOUNTING INFORMATION SYSTEMS AND TECHNOLOGY (ENTERPRISE RESOURCE PLANNING-ERP)

INTERNAL CONTROL: COSO; COSO ERM; Corporate Governance; IT Governance; COBIT Standard; ISO Series
Presentation title 12
 From Business as Usual to Sustainable Business
Where to start ?

Values
Innovation
Adaptability
Passion
Ideology

Sustainability
Innovation
❑ Exploitative
❑ Explorative

Self-sustainability
Outside-in Economic-sustainability
Inside-out approach Social-sustainability
Environmental-sustainability
The Triple I Framework
Exploring Path Toward Sustainability
Assurance &
Reporting
Accountability &
Communication

St Relation & Risk

Mgt process

S Mgt Tools Std

Guidance

S. Business Case Driver

Sust Motivation

Unit Organization
Sthd Engagement
Alignment
LATERAL MOVE: Mobilisasi VS Demobilisasi
INTEGRAL MOVE: Integrasi VS Disintegrasi
 SUSTAINABILITY STRATEGY AND RISK MANAGEMENT
(ESG PRACTICE )

Principles Performance Framework

GOVERNANCE Kumpulan Kapabilitas Terintegrasi yang
mampu merealisasikan:
The Nature of the Firm’ (Coase, 1937): Firm & Market adalah alternatif (1). Pencapaian tujuan yang andal. (2)
governance. Pemilihannya ditentukan oleh perbedaan TCE
Mengatasi ketidakpastian
The Problem of Social Cost (Coase, 1960) “Zero Transaction Cost” Organisasi (3). Berintegritas dalam bertindak
harus memilih alternatif yang layak berdasarkan institusional atau TCE positif
→Area Operasional Bisnis paling potensial SMART TARGET
Specific, Measurable, Attainabl,,
Reformasi Regulasi CG didorong oleh Krisis Keuangan di Asia Tahun 1997/1998. Relevance, Timeliness
CG adalah Sistem dimana organisasi diarahkan, diawasi, dan dimintai
pertanggungjawaban untuk mencapi tujuan yang telah ditetapkan ISO 37000; 2020
COMPETENCE (CAPABILITY)
Biaya transaksi ekonomi yang dinamis; Pembelajaran jangka panjang; Kebutuhan
mengelola isu-isu strategis melebihi governance yang generic
RISK: Reformasi Regulasi Risk Governance/RGOV disorong oleh Krisis Global
karena lemahnya CG dalam pengawasan risiko. Risiko adalah efek ketidakpastiann
dalam mencapai tujuan (ISO 31000: 2021).
COMPLIANCE: Bukan hanya sebatas pemenuhan terhadap aturan hukum, melainkan
perilaku etis, tanggung jawab sosial dan keberlanjutan yang tidak hanya dapat
diselesaikan oleh Hukum (ISO 37301; 2021)
 ESG Practice Model

PROCESSESS

ESG Practice Model MCS-LoC Perspective 22 Mei 2024

Sources: How Sustainability Works (Epstein & Buhovac, 2014)
17
ESG Practice Model: Accountability Cycle

Sources: How Sustainability Works (Epstein & Buhovac, 2014)

 Corporate and Risk Governance
[CG and RGOV]
CORPORATE GOVERNANCE is “a set of
relations between companies management, it’s
board, it’s shareholders, and other stakeholders
which provide structure through which the
objective of the companies are set, and the
means of attaining those objectives and
monitoring performance. It helps define the
way authority is allocated and how corporate
decisions are made” (BCBS, 2015, p.1).

RISK GOVERNANCE Principles

1. Tanggung jawab board
2. Kualifikasi dan komposisi board
3. Peran ketua dewan (chair of board)
4. Peran manajemen senior (CEO)
5. Governansi struktur kelompok (group
structure)
6. Fungsi manajemen risiko yang efektif dan
independent.
7. Identifikasi risiko, monitoring dan
pengendalian risiko.
8. Komunikasi risiko
 Generic Strategy of Corporate Portofolio

Anatomy of Strategy and Policy: Parent Company, Subsidiaries, and Business Units
Generic Strategy of Corporate Portofolio
Strategic Performance Measuring Systems
[Sustainability] Balanced Scorecard
Define and clarify the
The philosophy of performance
Architect management and the process
required to execute

OFFICE OF
STRATEGIC
MGT
The The
Process Integrator
Owner
 ESG Practice Model - Balanced Scorecard

Figure 1. ESG Principles Model

Sources. Anis & Avrillia (2024) Analizing impact of ESG principle on performance: A perspective from sustainability balanced scorecard.
Segera terbit pada Jurnal Akuntansi Keuangan Indonesia (JAKI) Vol 21, Nomor 1 Tahun 2024
Management Control System Four Levers of Control (MCS-LoC
 ESG Practice Model
Sustainability Intention
Belief System – Core Values
 ESG Practice Model
Sustainability Integration
Boundary Systems
ESG Practice Model & Criteria
Sustainability Implementation
Management System
ESG Practice Model & Criteria
Scoring Techniques
GHG Accounting and Reporting Principles
Setting Organization Boundary
Setting Operation Boundary
 Policy Capability Management Model (PCMM)

❑ Kebijakan adalah bagian dari Dokumen Governansi dan Definisi terkait dengan Kebijakan
❑ Kebijakan yang baik menentukan Postur Governansi organisasi, budaya perusahaan, Batasan perilaku dan Tujuan
❑ Kebijakan adalah kendaraan yang akan mengomunikasikan dan mendefinisikan nilai, tujuan dan sasaran
sehingga budaya yang terbentuk tetap dapat dikendalikan.
 NATIONAL SUSTAINABILITY
17 SDGs AGENDA TO TRANSFORM THE WORLD
(UN WCED, 1987; Global Compact, PACC 2015; WEF 2021; Roadmap SF; Rencana Aksi Keuangan
Berkelanjutan-RAKB , (OJK 2015; 2017; 2021)

“THE VIRTUOUS CYCLE BALANCE” (Waddock & Graves 1997)

INDUSTRIAL
FINANCIAL SYSTEM Supply-side SF (REAL ECONOMY)
The LEADING ROLE of BANKING INSTITUTIONS is DIRECT
Direct Impact
“RISK PRICING” IMPACT
INDIRECT TO ACCELERATE TRANSITION TO LOW CARBON
IMPACT (CIRCULAR ECONOMY) Indirect Impact
PASAR MODAL Demand-side SF UMKM
INBK Rumah Tangga

INOVASI dianalisis dari dianalisis dari pendekatan CORPORATE SUSTAINABILITY MANAGEMENT

“REVERSE PRODUCT CYCLE” yang meningkatkan (1) Efisiensi menyampaikan jasa
(process improvement) (ii) Kualitas jasa (process innovation) (iii) menciptakan jenis Suatu pendekatan bisnis mencari peluang “berinovasi” dengan mengelola risiko dari aspek
dan variasi baru dari jasa keuangan (product innovation) (Barras, 1986). ekonomi, sosial dan lingkungan (DJSI)
SUSTAINABILITY is ”the ability of a system to maintain itself indefinitely without a
high risk of it dropping to a lower level of complexity”(Silver, 2017). ENVIRONMENT, SOCIAL & GOVERNANCE (ESG) akan memastikan kinerja sehat tercapainya
Self-sustainability, Economic, Social & environmental Sustainability stabilitas finansial (SURVIVALNESS) (Aras & Crowther, 2008)
ESG Screening = Adequate Adjusted Return.

The NUDGING THEORY OF CHANGE” : Base-lending rate bagi bisnis/proyek dengan risiko ESG rendah dan Premium-rate bagi bisnis/proyek denga risiko ESG tinggi
(Thaler & Sunstein, 2008)
33
 JOURNEY TO SUSTAINABILITY CHANGE
INFRASTRUKTUR INSTITUSIONAL PROYEK CSR/Sustainability (Waddock (2008)

Market /Business Sector Civil / Society Institution State/Public Sector

Prinsip informasi yang reliable, assurance, peran konsultan, Melibatkan PPP of NGO, Harus mampu menyediakan informasi pada jurnal, Harus memenuhi aspek legal,
analis & dan pergerakan investasi bertanggung jawab (SROI) majalah,artikel dan dapat diakses melalui media online terkait SROI regulasi terkait serta SROI

Diiffusion of innovation theory (Rogers, 1983; 2002)

BENCHMARK TO BEST PRACTICE → Sustainability will promote CONVERGENCE of VARIOUS GOVERNANCE SYSTEMS

Future Fit Foundation (Elkington, 1997, 2020

→ BASIS KEUNGGULAN BERSAING DI MASA DATANG (Lloret, 2016; Salvioni , 2016; Bosch-Badia et al., 2017)
Tabel 1.1. The framework to sustainable finance (A step by step innovation model)

Journey of Learning Perkin et al. (2015)

Dynamic Capability theory (Teece, 2007)

Sources. Dyllick & Muff, (2016); Schoenmaker, (2017), Strategic Continuum (Minzberg & Water 1985; Fontana, 2010; 2011)

Transformational
SF VALUE RANKING/ ORGANIZATION HORIZON C_VALUE PROP EVOLUTIONARY

Legitimacy theory (Lindblom, 1993)

TYPOLOGY CREATION PRIORITY IN PERSPECTIVE (STRATEGIC

change
FACTOR IN REPORTING
FITNESS)
SF3.0 Common S + E>F Inside-Out & Long CVP naik, Twin approach of involving
good value Outside-in Term Harga turun stakeholders INNOVATION
comm & accting
SF2.0 Stakeholder TV = F+S+E Inside-out Medium CVP naik, Accounting
s value Term driven
Harga tetap
EFFICIENT

Transitional
SF1.0. Refined F>S+E Inside-out Short CVP tetap, Reporting

change
Shareholder Term driven
Harga turun
s value
Finance as Shareholder F Inside-out Short CVP naik, Public-Relation
usual s value Term Driven
COMPLIANCE
Harga naik
SF0.0

→Proposed Extended SR Disclosure for banking, including aspect of Economic, Environnment, Social,
Governance & Financial Stability (EESG & F) (Schaltegger 2012; Aras et al., 2018a; 2018b) 34
Sustainability takes forever,
and that’s the point
Thank You