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An Environmental, Social and Governance Compliance Framework guides Indonesian companies in meeting sustainability standards while following local regulations like OJK Rule 51/2017. It helps businesses track and improve their environmental impact, social responsibility, and corporate governance practices through clear metrics and reporting guidelines.

For companies operating in Indonesia's diverse sectors, this framework creates a roadmap for managing everything from carbon emissions and waste handling to fair labor practices and anti-corruption measures. It aligns with both international ESG standards and Indonesia's own sustainability requirements, making it easier for local firms to attract global investors while supporting national green development goals.

Companies need an Environmental, Social and Governance Compliance Framework when expanding operations in Indonesia, especially during capital raising or when seeking international partnerships. This framework becomes essential for publicly listed companies complying with OJK Rule 51/2017, which requires comprehensive ESG reporting and risk management.

It's particularly valuable during strategic planning phases, mergers and acquisitions, or when entering environmentally sensitive sectors like mining, palm oil, or manufacturing. The framework helps navigate Indonesia's evolving sustainability regulations, manage stakeholder expectations, and protect against reputational risks while building stronger relationships with local communities and regulatory bodies.

• Basic Compliance Framework: Focuses on essential ESG reporting requirements under OJK Rule 51/2017, suitable for smaller Indonesian companies just starting their sustainability journey
• Comprehensive ESG Framework: Includes detailed metrics, governance structures, and reporting mechanisms aligned with both local and international standards
• Industry-Specific Framework: Tailored for high-impact sectors like mining, manufacturing, or palm oil, with specialized environmental and social impact assessments
• Supply Chain ESG Framework: Emphasizes supplier engagement, traceability, and sustainable sourcing practices across Indonesian business networks
• Community Development Framework: Centers on social responsibility, indigenous rights, and local community engagement specific to Indonesia's diverse regions

• Corporate Legal Teams: Draft and maintain the framework to ensure compliance with OJK regulations and international ESG standards
• Board of Directors: Approve and oversee implementation, setting strategic ESG goals and accountability measures
• Sustainability Officers: Manage day-to-day implementation, data collection, and reporting processes
• External Auditors: Verify ESG performance metrics and compliance with framework requirements
• Stakeholder Groups: Including investors, local communities, and NGOs who monitor company performance against framework commitments
• OJK Regulators: Review framework compliance as part of broader sustainability reporting requirements

• Company Assessment: Map current ESG practices, identify gaps against OJK requirements, and document existing sustainability initiatives
• Stakeholder Input: Gather feedback from department heads, community representatives, and key investors on ESG priorities
• Industry Benchmarking: Research ESG frameworks used by similar Indonesian companies in your sector
• Data Systems: Set up monitoring tools for environmental metrics, social impact indicators, and governance performance
• Regulatory Alignment: Review latest OJK sustainability guidelines and relevant sector-specific regulations
• Implementation Plan: Create clear timelines, assign responsibilities, and establish reporting mechanisms

• Purpose Statement: Clear objectives aligned with OJK Rule 51/2017 and company sustainability goals
• Environmental Metrics: Specific targets for emissions, waste management, and resource conservation
• Social Impact Criteria: Labor practices, community engagement, and indigenous rights protection measures
• Governance Structure: Roles, responsibilities, and accountability mechanisms for ESG oversight
• Reporting Requirements: Data collection protocols and disclosure schedules matching OJK guidelines
• Risk Management: ESG risk assessment procedures and mitigation strategies
• Compliance Mechanisms: Internal audit procedures and enforcement measures

While an Environmental, Social and Governance Compliance Framework provides a comprehensive structure for managing all aspects of sustainability and corporate responsibility, it's often confused with a Corporate Social Responsibility Policy. Let's explore their key differences:

• Scope and Coverage: ESG frameworks encompass broader regulatory compliance requirements under OJK Rule 51/2017, while CSR policies typically focus solely on community engagement and social impact initiatives
• Legal Requirements: ESG frameworks are mandatory for publicly listed companies in Indonesia and require specific reporting metrics, whereas CSR policies can be more flexible and voluntary
• Implementation Structure: ESG frameworks include detailed governance mechanisms, performance indicators, and audit procedures, while CSR policies generally outline principles and program guidelines
• Stakeholder Engagement: ESG frameworks involve multiple stakeholders including investors, regulators, and community groups, while CSR policies primarily focus on community beneficiaries and corporate initiatives