Currently, the ESG concept is being applied in the infrastructure sector, including the construction and operation of toll roads.
A critical review of toll road development in Indonesia with ESG implementation for sustainable infrastructure requires a deep evaluation of these projects’ environmental, social, and governance impacts.
Implementing ESG in toll road projects in Indonesia is expected to ensure that infrastructure development aligns with sustainable development goals, engages communities, and reduces negative environmental impacts.
It is essential for the government, developers, and other stakeholders to continuously monitor and improve sustainable practices in infrastructure projects.
Recognizing the importance of ESG in toll road development, the UGM Center for Transportation and Logistics Studies (Pustral UGM) held a webinar on Critical Review of Indonesian Toll Road Development: ESG Implementation Towards Sustainable Infrastructure.
The webinar discussed how sustainable construction pillars and principles can drive sustainable infrastructure development and explore the implementation of social and environmental management systems in infrastructure project financing.
Dr. Ikaputra, Head of Pustral UGM, stated that the webinar’s topic is intriguing as toll road development has been the largest, most advanced, and best infrastructure development in the last five years.
Developments in this sector are dominant in transforming connectivity and accessibility from various regions to others. One issue that needs critical review concerns toll road development related to ESG implementation towards sustainable infrastructure.
“Things about sustainability are indeed interesting because the balance in this development needs attention,” he said on Thursday (May 2).
Kimron Damanik, Director of Construction Sustainability at the Ministry of Public Works and Housing, highly appreciated the organization of the webinar. He viewed this activity as a collective step towards real action to support sustainable infrastructure development.
As a key speaker addressing the topic of Sustainable Construction Pillars and Principles to Drive Sustainable Infrastructure Development, he mentioned that Indonesia’s development direction for the next 20 years will adhere to sustainable development principles.
One development target for Golden Indonesia 2045 is to reduce greenhouse gas emission intensity to zero initial emissions.
“It is expected to decrease by 51.5 percent cumulatively from 2010 to 2045 under the business as usual scenario to reach 2060. In this regard, we have to be optimistic because there is no other choice but to strive to save the environment,” Director Damanik stated.
Kimron Damanik highlighted that the ESG factor in infrastructure development will enhance industry competitiveness and attract investors. Various empirical studies have proven that ESG implementation correlates positively with a company’s financial performance.
With sustainable principles applied in infrastructure development, Indonesia expresses readiness to implement ESG as outlined in the Minister of Public Works and Housing Regulation No. 9 of 2021, which focuses on three main pillars.
The first pillar, in an economic context, aims to improve community welfare through sustainable construction. This means it can create economic benefits for all parties and continuously improve economic welfare.
In an environmental preservation context, the second pillar emphasizes ecological sustainability to address climate change, enhance biodiversity, reduce air pollution, and maintain water quality.
The third pillar, in a social context, aims to achieve fair and inclusive development, reduce social disparities, and have a positive impact on reducing social inequality.
“Let’s not be complacent with claims that we are the world’s lungs. Our forests are vast, but what’s crucial is that we must start critically evaluating because if we’re not careful, it could lead to major disasters in the future,” Director Damanik expressed.
Dwi Susanto, Vice President of the Environmental and Social Division at PT Penjaminan Infrastruktur Indonesia (PII), acknowledged that ESG has become popular over the past three to five years.
ESG represents a commitment to ensure business sustainability, and projects or programs supporting this aim to provide benefits and sustainability to communities.
“The understanding or interest of global investors in ESG has increased. The real impact of climate change is palpable, and everyone now sees that climate change is not just a story or a narrative without facts. We can feel the heat, experience the frequency of disasters, and these also impact the infrastructure we build,” he noted.
Author: Agung Nugroho
Photo: kabarbisnis.com