Implementation of ESG Principles in Indonesian Business Law: Analysis of Responsibilities, Regulations, and Implementation Challenges

Abstract

The issue of sustainability in global business practices has become a major concern amid increasing climate change challenges and demands for social and transparent governance. The principles of Environmental, Social, Governance (ESG) have emerged as an assessment framework for businesses in achieving sustainability, as reflected in national regulations such as OJK Regulation No. 51/POJK.03/2017. This research aims to analyze corporate law responsibility in ESG implementation in Indonesia through a qualitative literature review using a thematic synthesis method. The research findings confirm that ESG has evolved into a binding law obligation, going beyond mere corporate ethical standards. The environmental, social, and governance dimensions are the main instruments that determine corporate accountability and legitimacy. While there are still implementation challenges such as greenwashing practices, weak oversight mechanisms, and inconsistencies between legal norms and actual application in the field. Greenwashing practices threaten social trust and create legal uncertainty, while weak oversight limits the effectiveness of substantive ESG implementation. Compliance with ESG standards is, besides, a requirement for international trade and affects the competitiveness of Indonesian companies in the global arena. This research recommends strengthening the audit system, harmonizing regulations with international standards, and increasing supervisory capacity so that ESG implementation truly provides sustainable added value. With robust ESG integration, companies can create long-term value that is fair and accountable, while meeting evolving laws and social demands.