Environmental, Social and Governance (ESG)

Value creation journey

As a result of a rapidly increasing global focus on broad ESG issues by governments, the private sector and the public over the past few years, a trend exacerbated by the COVID-19 pandemic, we have witnessed a major shift towards a better understanding of climate change, sustainability and other ESG issues. Companies and organisations are looking to identify and respond to their ESG risks and opportunities. Active management of ESG issues can directly impact the bottom line as well as a company’s reputation and social licence to operate. Our range of services will help you better understand the ESG value creation journey and how PwC can assist you to fulfill your ESG needs.

 

Focusing on ESG is about value preservation (at a minimum) and value creation by optimising the use of key business drivers and capitals in your company. Inaction can therefore lead to value destruction.

How can business create value through ESG?

An ESG strategy informs your overall objectives and plans while your corporate ESG framework will set out the way in which ESG factors will be incorporated into your operations and the direct actions that you’ll take to address ESG risks and opportunities.

How we can help

1. Climate risk and scenario analysis

Identify climate-related risks (both physical and transitional) and conduct qualitative and quantitative scenario analysis.

2. GHG accounting

Baselining GHG emissions by source and decarbonisation options.

3. Net-zero strategy and roadmap

Build a net-zero strategy and roadmap based on the results of climate risk analysis, scenario analysis and GHG Accounting.

4. Social impact analysis

Conduct social impact analysis (including consideration of gender equality and social inclusion) to ensure the company’s decarbonisation strategy provides benefits to society.

5. Access to financing for energy transition and net-zero strategies

Identify potential sources of debt and equity financing, and support with feasibility studies, economic analysis, valuation, merger and acquisition strategy as required.

6. Green taxonomy alignment

Align business operations and services with the national green taxonomy to comply with regulations, as well as identify opportunities available for becoming green.

1. Carbon-related technical aspects
Measurement of the current emission values (baseline), determining current carbon stock, measurement of the emission reduction from planned activities, as well as establishing carbon offset and reduction strategy that is in line with future business directions.


2. Technical and legal carbon eligibility assessment and registration process support to carbon market
Conduct technical and legal eligibility assessment
of carbon projects based on the selected market or scheme, which include complete carbon sequestration modeling, and provide assistance with the end to end process of verification and registration process of carbon credit for both international and domestic registration (i.e VCS and SRN PPI process). Furthermore, assistance is also available in the preparation of monitoring and reporting activities, as well as responding to queries from verification/validation body.


3. Carbon projects financial modeling
Conduct financial analysis for potential of carbon projects in the domestic and international market and assistance in identifying tasks and decisions such as making an acquisition, development and restructuring of the business to incorporate carbon projects into business portfolio, which include cash flow modeling, and assessment of capital and operational expenses, with revenue and carbon price projections, as well as carbon credit accounting and tax advisory on carbon credit transactions.

1. Sustainability reporting, strategy, and training

Develop sustainability reports in accordance with global standards and framework, including the reporting roadmap, strategy and training to equip staff with the relevant ESG knowledge and skills.

2. Materiality assessment

Conduct a materiality assessment to identify the stakeholders’ ESG concerns and determine prioritised material topics for reporting purposes.

3. ESG metrics identification

Determine the relevant ESG indicators, metrics and measures to help the client with ESG strategy oversight and reporting.

4. Gap analysis on reporting framework and standards

Conduct a gap analysis on existing sustainability reports against certain global frameworks and standards and provide recommendations to comply with them.

5. Gap analysis on the ESG rating agencies framework

Conduct a gap analysis of a company’s existing ESG implementation to address the indicators from ESG rating agencies and achieve a better ESG rating score.

6. Sustainability report assurance

Provide assurance over the sustainability report to build trust with stakeholders.

1. Developing sustainable finance framework
Assist in the development of framework related to sustainable finance, e.g., green loan, social loan, sustainable loan, sustainable linked loan, green deposit.

2. Assistance in implementing green taxonomy
Develop questionnaire and embed the questionnaire into existing banking systems, including the reporting system.

3. Climate-related risk integration into bank’s risk management
Enhance existing bank risk management by embedding climate-related risks and opportunities, e. g., refinement credit risk management, climate risks stress testing.

4. Develop transition plan for Financial institutions
Assist financial institutions in establishing a sound transition planning process and effectively implementing climate change mitigation and adaptation by their customers

1. Sustainability strategy development
Craft a visionary sustainability or ESG strategy,
an ambitious roadmap, and aspirational targets spanning the short, medium, and long term, all intricately woven into the very fabric of the company’s business or operating model and strategic vision.

2. ESG risk and governance
Refine business processes or Standard Operating Procedures (SOPs) to gather reliable ESG data in a more efficient manner.

3. ESG internal audit
Conduct an internal audit related to ESG and its related tools to identify risks, root causes and other internal audit-related aspects.

4. ESG training
Design and deliver internal training on particular ESG topics tailored to address the company’s needs.

5. ESG research and development
Conduct research on particular ESG-related topics to help improve the company’s ESG performance.

6. Diversity, Equity, and Inclusion (DEI): people and culture
Assess the level of DEI maturity and provide a set of recommendations, strategies, Key Performance Indicators (KPIs) and a roadmap for DEI improvement.

7. Sustainable Supply Chain Advisory
Provide a strategy and roadmap to ensure traceability and compliance of the company’s supply chain with particular regulations and ESG principles.
 

Related links
The Energy Transition

Fuelling a resilient future through powerful alliances, greener investment and greater use of renewables.

Indonesia's Carbon PricingUnderstanding the Basic Regulatory Framework

The key concepts in carbon pricing regulations and discussion on the legal considerations for investors and businesses in entering Indonesia’s carbon market.

Carbon Market Value in the Climate Change Era

Our services will help you gain a better understanding of carbon credits and the expanding market from the perspectives of buyers, sellers, and investors.

ESG and Sustainability Value Creation in the Climate Change Era

Our statement of capabilities

Sustainable Finance Services

Our statement of capabilities

Insights
Indonesia Carbon Market White Paper

Exploring the potential of Indonesia's carbon market as a crucial tool for mitigating global temperature rise in line with the targets of the Paris Agreement.

Speeding Up Asia Pacific's Decarbonization: The Role of Emissions Tracker

Emissions Tracker helps you aggregate, analyse and report carbon data. This allows ease of monitoring and managing of emission reduction and net-zero initiatives.

Embracing a circular economy for a resilient tomorrow: Reinventing Asia Pacific

The Asia Pacific region, a global manufacturing hub and the world's fastest-growing economic area, accounts for nearly half of global manufacturing output and carbon emissions. 

 

Accounting and Tax Considerations on Carbon Trading for Voluntary Market

With the growing focus on climate change and carbon emissions, companies are increasingly taking steps to reduce or offset their carbon emissions. This has led to a rise in demand for carbon trading, which allows entities to offset all or part of the emissions generated by their operations or value chain.

Nature at tipping point: How investors in Asia Pacific can manage nature-related risks

PwC analysis reveals 58% of the combined market capitalisation of Asia Pacific stock exchanges (US$17 trillion) includes companies with higher or moderate dependency on nature. 

Sustainability Update No.01/2024

What should banks do with the issuance of IFRS S1 and S2?

Tapping into the power of blended finance

Accelerating progress in Asia-Pacific’s energy transition presents an enormous opportunity to marshal the powerful combined forces of public and private capital.

 

decarbonised transportation
Can hydrogen turn the rail industry green?

Hydrogen-powered trains are likely to be crucial to transport decarbonisation. Can industry, policymakers and regulators work together to overcome the barriers to further innovation?

 

Alignment Strategy between the GRI Standards and IFRS Sustainability Disclosure Standards (Indonesian)

Strategic steps for Indonesian companies in aligning the GRI Standards with the IFRS Sustainability Disclosure Standards for the next Sustainability Reporting period. This alignment is expected to support companies to measure and disclose the impact of ESG on financial and business positions (outside-in), as well as the company's impact on the environment and social (inside-out) in a comprehensive manner.

IFRS Sustainability Disclosure Standards - Guidance, insights and where to begin

The IFRS Sustainability Disclosure Standards are based on the four-pillars of the Task Force on Climate-Related Financial Disclosures: governance, strategy, risk management and metrics and targets.

The Circular Economy Transition for Asia Pacific

Asia Pacific businesses should prepare now for new circular economy reporting standards.

When the going gets tough, can Asia Pacific CEOs get ESG going?

Four actions Asian Pacific CEOs can take to link climate strategy with investor priorities for value creation.

Sustainability Counts II: State of sustainability reporting in Asia Pacific

Understanding sustainability reporting requirements globally and across Asia Pacific, and insights on the journey to date.

ESG in Indonesia: Access to Finance 2023

Indonesia’s efforts to leverage sustainable finance, aligned with domestic and international development goals.

Green growth in Southeast Asia’s public sector

How countries can sustainably utilise their natural resources to achieve their economic and social goals.

Indonesia's Sustainable Transformation

Why ESG is a top business priority for Indonesia and how technology can accelerate ESG achievement?

Follow PwC Indonesia