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The Impact of ESG on the Performance of the Financial Services Industry

  • 27 Januari 2022
  • Lintas Sektor
  • Online

Teaser
Background
  • The awareness of business players in support environmental sustainability and positive impact on social activities while carrying out their operational activities has increased globally in the past two decades. Business activities are not only focus on how to achieve large profits, but also pay more attention to aspects of environmental damage. One of the causes of environmental damage mainly because of the improper usage of resources and the ignorance of applicable rules or norms. It has impacted on social conflict since the parameter of company’s performance only based on the high profit.
  • Previously, the investors saw that the benefits of ESG (Environmental, Social, and Governance) were less important and require high cost. However, a new perspective has emerged recently that the company must consider the ESG factor in measuring the financial performance. Most of the empirical evidence proves that "good" issuers will have a high ESG value. It means that ESG is directly proportional to the level of return on investment and the company's profitability ratio. In addition, environmental performance assessment of a company will have a significant positive effect on company value (Eccles et al., 2012). Therefore, companies labelled ESG/SRI (Sustainable and Responsible Investment) is able to obtain a higher rate of return on investment (RoE) and continues to grow sustainably (Hassel, 2013).
  • Based on those backgrounds, various efforts are required to fulfil the needs and also to improve the performance of financial services industry in Indonesia through the implementation of Environmental, Social and Governance (ESG) in a planned, measured, and sustained action.

 

Objective

1. Provide an understanding of ESG in the Financial Services Industry in Indonesia; 

2. Increase awareness about the important impact of ESG implementation; and 

3. Increase knowledge about the steps for implementing ESG by the Financial Services Industry in Indonesia. 

Participant
Pimpinan dan Pegawai OJK, Perwakilan Industri Jasa Keuangan, Akademisi dan Masyarakat Umum / OJK Leaders and Employees, Representatives of the Financial Services Industry, Academics and the General Public
Speaker
  • Arifin Rudiyanto (Deputi Bidang Kemaritiman dan Sumber Daya Alam, Bappenas)
  • Clarisse Simonek (Co-Founder WeESG)
  • Enrico Hariantoro (Kepala Grup Kebijakan Sektor Jasa Keuangan Terintegrasi OJK)