Sustainable Development Goal Disclosures in Indonesia: Challenges and Opportunities
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REVIEW OF INTERNATIONAL GEOGRAPHICAL EDUCATION ISSN: 2146-0353 ● © RIGEO ● 11(3), SUMMER, 2021 www.rigeo.org Research Article Sustainable Development Goal Disclosures in Indonesia: Challenges and Opportunities Tommy Andrian1 Yuliana2 Faculty of Economics and Communication, Bina Faculty of Economics and Communication, Bina Nusantara University, Jakarta, Indonesia Nusantara University, Jakarta, Indonesia [email protected]. [email protected] Putriana Sulaeman3 Yoan Dwilliam Agata4 Faculty of Economics and Communication, Bina Faculty of Economics and Communication, Bina Nusantara University, Jakarta, Indonesia Nusantara University, Jakarta, Indonesia [email protected] [email protected] 1Corresponding Author: Faculty of Economics and Communication, Bina Nusantara University, Jakarta, Indonesia. E.mail: [email protected]. Abstract The purpose of this paper is to examine whether CSR activities in Indonesian companies support and align to the SDGs. The sample used in this study focuses on the non-financial sector listed on the Indonesia Stock Exchange with a total of 496 units of analysis consisting of 130 sustainability reports for the period 2017 to 2019 and 366 company annual reports in 2019. The content analysis method used was to analyze the sustainability report from 2017 to 2019 (three consecutive years) and the 2019 annual report to provide a complete analysis due to the lack of companies that disclose sustainability reports. The 2019 annual report content analysis shows that Indonesian companies tend to support the achievement of good health, quality education, gender equality, reducing inequality, peace and justice. In the sustainability reports for 2017 to 2019, companies disclose more CSR activities in line with SDGs good health, quality education, clean water and sanitation, economic growth, & partnership. The results from this analysis can be used to encourage companies to pay more attention to SDGs indicators that have not been achieved and try to map out CSR implementation that supports SDGs and links them to business activities. Then, the government should help provide guidelines that are still not maximally implemented by companies, and the government could appreciate companies that have supported SDGs to encourage company disclosure initiatives. Keywords Sustainable Development Goals; SDGs Disclosure; Corporate Social Responsibility; CSR Implementation; Indonesia To cite this article: Andrian, T.; Yuliana; Sulaeman, P, and Agata, Y, D. (2021) Sustainable Development Goal Disclosures in Indonesia: Challenges and Opportunities. Review of International Geographical Education (RIGEO), 11(3), 604-617 .Doi: 10.48047/rigeo.11.3.64 Submitted: 02-01-2021 ● Revised: 04-02-2021 ● Accepted: 03-03-2021 Andrian, T.; Yuliana; Sulaeman, P, and Agata, Y, D. (2021) Sustainable Development Goal Disclosures in…… Introduction The differences of each country adapting to environmental conditions are an inhibiting factor in realizing the SDG goals, causing global problems currently being faced, such as implementing peace and health. That implements sustainable development varied, as seen by the different main focuses of achieving the SDGs. According to data from the Indonesian Statistic Bureau, (2021) referring to the 17 SDG goals, some indicators have not been conducted in Indonesia. In 2018, this indicator was the achievement of access to electricity (1.06%). In 2019 the indicators that have not been achieved were in the form of overcoming hunger (7.66%), health (5.18%), clean water (22.61%), poverty (10.19%), internet use (52.31%), peace (25.08%), and partnerships (27.75%). In 2020 these indicators were in the fields of education (1.71%), formal work (60.47%), inequality (38.54%), and sustainable cities (40.46%). CSR implementation could affect the SDGs, promoting sustainable development since there is a link between the two (García-Sánchez, et al.,2020). Based on Gunawan, et al. (2020) by making SDGs a target for business and CSR activities, companies could get many benefits and keep social risks at a lower level. Additionally, CSR could be used as a driver in achieving sustainability because it pays attention to the balance of social responsibility and corporate financial sustainability (Abdelhalim & Eldin, 2019). That indicates the need to seek information on CSR activities related to the SDGs. Good CSR information related to the SDGs requires good reporting, where one of the factors is the type of industry of a company (Ali et al.,2017). In the construction sector according to Xia et al., (2018). CSR activities are seen as terminology that’s also able to help achieve sustainable development, where the social dimension in CSR is considered the most dominant, such as education, skill acquisition, social procurement/enterprise, and daily reconciliation. In the textile sector, CSR could be implemented well with the help of initiatives from the government (Li, et al.,2020). Based on Latapí Agudelo et al., (2020) in the energy industry, CSR is an issue that is emphasized in response to social expectations of the SDGs implementation, which is used to maintain the social license in company operations. This emphasis includes aspects of human and labor rights, stakeholder engagement, environmental performance, and social impact. In the food sector, companies that implement CSR are considered superior because they care for environmental and social sustainability following the application of SDGs (Del Giudice et al., 2018). Based on this background, this study wants to discuss the gap between CSR and SDG by analyzing the annual financial statements of non-financial companies listed on the Indonesia Stock Exchange (IDX) in 2019 as well as the company’s sustainability reports from 2017 to 2019, which are an extension from the previous research (Gunawan et al., 2020). This research is expected to provide an updated overview regarding CSR implementation in Indonesia, which aligned with the SDGs indicators. Based on that, the objectives of this study are: (1) providing information on CSR in Indonesia that is aligned with the SDGs, (2) providing CSR activities that have been done by companies in the non-financial sector which are disclosed in annual financial and sustainability reports, and (3) provide an overview development of the number of sustainability report disclosures observed during the research period in the non-financial sector. Literature Review Some literatures (Fu, Wang, Zhang, Hou, & Li, 2019; Nilsson et al., 2018; Pradhan, Costa, Rybski, Lucht, & Kropp, 2017; Scharlemann et al., 2020) states that the 17 Sustainable Development Goals and targets interact inseparably with each other. The achievement of one goal or target can contribute to achieving other goals and targets, and these linkages form complex networks. Various SDGs linkage studies are used as the basis for the analysis of the Indonesian SDGs Roadmap. Some of the literature is publications from UN DESA (Le Blanc, 2015). Bappenas study reports Bappenas., (2019), and scientific publications supported by the Nippon Foundation (Singh, 2020). In Figure 1 from (Unicef., 2020) is a linkage analysis for the Indonesian SDGs starting for 43 targets and 17 objectives. The results of the analysis stated that of the 43 SDGs targets said that there were 17 targets out of 9 goals that had a powerful influence on other targets, with a low level of dependence, namely poverty targets (1.2), zero hunger (2.1 & 2.2), good health and wellbeing (3.3), clean water and sanitation (6.1 & 6.2), affordable and clean energy (7.1), economic growth (8.5), and reduced inequalities (10.1). These targets can be referred to as 605 © RIGEO ● Review of International Geographical Education 11(3), Summer 2021 targets with a high driving force. However in Indonesia, SDGs implementation is still not going well. This is reflected in the many shortcomings and problems that arise, such as the low human development index (Yorisca, 2020), the economic growth of the country, which almost entirely located on the islands of Java and Sumatra (Rahma, et al.,2019), unequal access to electricity (Setyowati, 2021), as well as the problem of poverty that has not been fully resolved (Ishatono & Raharjo, 2016). This shows the existence of inequality in Indonesia. Additionally, in the energy sector, which is the primary key for the SDG to run, even though it is running well, but still not according to the target set (Santika et al., 2020). Indonesia has a program that determines nine development priorities for the next five years, known as Nawa Cita. It is hoped that with the existence of Nawa Cita in Indonesia, the state could become more politically sovereign, economically independent, and have a cultural personality (Ministry of National Development Planning Agency, 2021). The realization of the Nawa Cita program could be seen from several regulations implemented by the government, such as the goals of Nawa Cita that are related to Indonesia’s development from the fringe by strengthening regions and villages within the framework of a unitary state. This could be found in Law Number 6 of 2014 about the provision of Village Funds. Subsequently, related to realizing economic independence by moving strategic sectors of the domestic economy is based on Law No. 24 of 2019 Article 12 about the Creative Economic. Additionally, the national development system is regulated in Law Number 25 of 2004 (Audit Board of the Republic of Indonesia, 2004). The Nawa Cita Program could be aligned with sustainable