John Riady: 2023 Marks a Turning Point for Expanding ESG Implementation in Business

JAKARTA, January 13, 2023 — The application of sustainable business principles, known as ESG (Environmental, Social, and Governance), is becoming increasingly demanded of businesses. Sustainable development that integrates all aspects—environmental, social, and governance—is viewed as the most effective way to mitigate environmental damage and enhance overall welfare.

John Riady, Executive Director of Lippo Group, emphasized that a clear and simplified understanding of ESG is crucial for its broader application in business operations. Currently, ESG principles still require extensive outreach and education across all levels of the business world.

“This year is a pivotal moment for ESG implementation, especially after two years of setbacks due to the pandemic. 2023 is the right time to expand ESG enforcement and adoption within corporations,” John asserted.

At the end of 2022, Indonesia’s Ministry of Finance issued a manual ESG framework for the infrastructure sector. Finance Minister Sri Mulyani stated that the ESG framework reflects the government’s commitment to sustainable development, particularly in infrastructure, and aims to facilitate the proposal of green investment financing. ESG implementation is expected to ensure that infrastructure development brings positive impact to all aspects of life.

On the business side, ESG provides guidelines that go beyond profit-seeking. It encourages companies to consider the operational impact, financial systems, organizational structures, and the lifecycle of their products. These considerations include external effects on the environment and society, as well as internal responsibilities toward employees, stakeholders, and investors.

According to John, both public and private sectors are gradually increasing their efforts to socialize ESG practices as the ideal framework for responsible business. “As a business practitioner leading Lippo Group, I’m deeply invested in ESG because I believe the Group can significantly contribute to society through our diverse business services,” he said.

Reflecting on the ESG journey over the past two years of the pandemic, John noted that stakeholders continued to push ESG principles forward. ESG is becoming the standard framework used broadly for business and financing decisions.

Meanwhile, the World Economic Forum (WEF) held in Davos, Switzerland, from January 16–20, 2023, adopted the theme “Cooperation in a Fragmented World”, aimed at addressing the world’s most pressing challenges and offering innovative solutions tied to ESG and SDGs.

The momentum to strengthen ESG adoption also took center stage during the G20 Forum in Bali, where Indonesia introduced several initiatives to improve environmental quality and social well-being, such as global health financing and the promotion of green financing practices.

John believes that expanding ESG adoption must be accompanied by a unified paradigm shift. ESG must be internalized and executed by all members of a business entity.

"ESG is not just about indices or reports. What matters more is the mindset of each individual within a business organization that embraces this vision. Only then can a business fully align itself with ESG principles," John concluded.

As one of Indonesia’s major business groups, Lippo Group is actively developing various ESG-aligned frameworks. With its core businesses spanning property, healthcare, and education, Lippo Group is expected to play a key role in advancing global sustainable economic goals.

Its holding company, PT Lippo Karawaci Tbk (LPKR), has demonstrated a strong commitment to integrated ESG practices. “At a smaller scale, in areas like Lippo Karawaci and Karawang, we manage all irrigation and water systems. The lakes there are not merely decorative—they serve as functional water reservoirs,” John explained.

A similar initiative has been implemented at Lippo Mall Kemang, where a large underground structure was built for parking but also functions as a floodwater retention facility. “We also use technology to recycle water. This is our interpretation of sustainable development—economic growth aligned with environmental preservation,” John added.

He concluded by highlighting the key difference between ESG and CSR:

“ESG must be directly tied to the business’s core operations within a circular economy framework. It should not cause harm and must create added value both externally and internally. CSR, on the other hand, is often limited to charitable giving without long-term sustainability,” John said in closing. (*)