Home Blog 5 Ways To Integrate ESG Investing into Business Growth Business Licenses | Company Registration 5 Ways To Integrate ESG Investing into Business Growth InCorp Editorial Team 4 June 2025 6 minutes reading time Table of Contents ESG Plays a Significant Role for Businesses Maximizing ESG Benefits for The Long Run What Type of Business Needs to Take ESG Seriously? The Five Ways ESG Can Benefit Your Business How to Integrate ESG into Business Plan ESG investing aligns investment portfolios with values and supports companies in making a positive impact. By integrating ESG factors into investment decisions, investors can promote sustainability and drive positive change in invested companies. ESG Plays a Significant Role for Businesses ESG (Environmental, Social, and Governance) refers to the non-financial factors companies use to measure their impact on society and the environment. These factors include carbon emissions, employee diversity and inclusion, supply chain management, and ethical business practices. There are several reasons why ESG will play a significant role for businesses from now to the future. First and foremost, consumers are becoming more environmentally and socially conscious and increasingly demanding that companies be transparent about their ESG practices. It means that companies that prioritize ESG are more likely to attract and retain customers. In addition, investors are paying more attention to ESG factors when making investment decisions. Many institutional investors now have ESG criteria to evaluate companies. Therefore, business entities must score well on the set criteria to be more attractive in the eyes of investors. Maximizing ESG Benefits for The Long Run Some studies have shown that companies with strong ESG performance outperform their peers in the long run. In addition, organizations that give importance to ESG factors could have a more vital ability to handle risks. For example, a company with strong environmental practices may be less vulnerable to supply chain disruptions caused by climate-related events. Aside from that, employees are increasingly looking for companies prioritizing ESG factors. With ESG as one of the priorities, companies are more likely to attract and retain employees passionate about sustainability and social responsibility. The priority can also drive innovation within companies by investing in developing more sustainable products or processes, leading to competitive advantages and cost savings. Read more: Understanding The Environmental Sustainability in Business What Type of Business Needs to Take ESG Seriously? Previously, sustainability was limited to addressing environmental issues exclusively, but nowadays, it encompasses a broader spectrum of concerns, including social and governance matters. As a result, corporations are under increased scrutiny from citizens, governments, regulators, and the media, demanding action on social inequality, corruption, tax avoidance, and climate change. Companies must now confront these challenges head-on and in full public view. Visualizing ESG Risk by Industry The emergence of ESG practices significantly influences various sectors, such as automotive, construction, healthcare, mining, insurance, oil and gas, power, retail, and tourism. The subsequent section will provide specific instances of these impacts. Due to the high environmental impact, businesses in the energy sector shall consider transitioning to green energy. Aside from this, community relations are strained due to the increasing pressure of climate change. The governance aspect pushes businesses to be more transparent in their dealings. Companies in the healthcare sector shall consider chemical usage in their transactions. There is a severe concern regarding product safety and proper marketing. Regarding governance, there is a high importance placed on data privacy of patience. The Five Ways ESG Can Benefit Your Business ESG initiatives can create value for businesses in five ways. 1. Expand into New Markets A strong ESG proposition can help companies tap into new markets and drive consumer preference. For example, companies with vital social engagement activities in the mining industry achieved higher valuations than their competitors. Research shows that consumers are willing to pay more for green products. In addition, nearly half of the companies surveyed identified business and growth opportunities as the reason for starting their sustainability programs. 2. Reduce Costs ESG can reduce costs substantially by combating rising operating expenses, such as raw-material costs and the actual cost of water or carbon. Research has found that this can affect operating profits by as much as 60 percent. As a result, FedEx aims to convert its entire fleet to electric or hybrid engines, which has already reduced fuel consumption by more than 50 million gallons. 3. Reduce Regulatory Pressure and Increase Government Support A stronger ESG proposition can help companies achieve strategic freedom and ease regulatory pressure, reducing the risk of adverse government action and engendering government support. 4. Retain Employees and Increase Productivity A strong ESG proposition can help companies attract and retain quality employees, increase employee motivation and productivity, and positively impact shareholder returns. When companies engage in philanthropy, a positive correlation exists between creating a social impact and increasing job satisfaction. 5. Increase Company’s Resilience A solid commitment to ESG practices can enhance a company’s ability to weather unexpected events and mitigate potential risks. Irrespective of their business model or geographic location, all companies can adopt these five links. How to Integrate ESG into Business Plan 1. Understand ESG Factors Companies’ first step is comprehensively understanding the regulatory landscape and stakeholder expectations. It will help to identify material ESG risks and opportunities and integrate them into their business strategy. 2. Set ESG Goals Companies should establish measurable ESG goals aligned with their overall business objectives. These goals should be regularly reviewed, tracked, and reported to stakeholders to demonstrate the company’s progress. 3. Integrate ESG into Decision-Making Processes Companies should integrate ESG factors into their decision-making processes across all business functions. It incorporates ESG considerations into investment, risk, and supply chain management. 4. Develop a Communication Strategy Companies should develop a communication strategy articulating their ESG goals, progress, and impact on stakeholders, including investors, customers, employees, and the wider community. It will help to build trust and transparency and enhance the company’s reputation. 5. Embed ESG into Corporate Culture Companies should embed ESG considerations into their corporate culture by educating employees and incentivizing ESG performance. It will help to ensure that ESG factors are considered in all business decisions and actions and create a culture of sustainability and responsible business practices. As the importance of ESG continues to grow globally, InCorp Indonesia (An Ascentium Company) recognizes the need to provide guidance and support to companies seeking to integrate sustainable practices into their operations. InCorp Indonesia (An Ascentium Company) offers advisory services on ESG matters to assist in managing ESG risks, improving ESG performance, and ultimately contributing to a more sustainable future. Read Full Bio Verified by Hotdo Nauli Senior Legal & Delivery Manager at InCorp Indonesia Hotdo heads the Legal and Delivery team at InCorp Indonesia, managing Product Registration, Legal Advisory, and Business Licensing. With over 8 years of experience, she focuses on compliance and integrity, ensuring all client operations align with Indonesian laws and regulatory standards, including contract reviews and sector-specific licenses. She is also a licensed advocate and a member of the Indonesian Advocates Association (PERADI). Frequently Asked Questions What kind of license does a PMA company need to get? In Indonesia, the licensing system has been updated with the implementation of the Omnibus Law. Businesses are categorized into four risk levels based on the PMA company classification. Licensing requirements vary accordingly, with three main types: Business Identification Number (NIB) Low-risk businesses needing only an NIB Standard Certification Standard Certification is necessary for medium-low and medium-high-risk businesses Licenses/Permits High-risk businesses require licenses/permits Additionally, basic requirements, including business location, must be met. Many licensing processes are facilitated through the Online Single Submission (OSS) platform managed by the Investment Coordinating Board (BKPM). How A PMA company can be eligible to conduct import activities? What licenses and procedures are necessary while engaging in import-related activities? A PMA company in Indonesia must obtain an NIB, which also functions as: Importer Identification Number (Angka Pengenal Impor or API) Producer Importer Identification Number (Angka Pengenal Impor Produsen or API-P), which is required for the import of machinery and equipment, goods, and materials used in production. General Importer Identification Number (Angka Pengenal Impor Umum or API-U), which is required for the import of specific goods for trading purposes, is grouped under one section in the Customs Classification System. Customs Identification Number (Nomor Identitas Kepabeanan or NIK), It functions as an identifying document for the applicable Customs and Excise authorities during the customs clearance process. Some goods may face limitations or restrictions on importation in Indonesia, potentially requiring additional approval from the Ministry of Trade. Recommendations from technical ministries like Industry or Agriculture may influence these approvals. Is there limited responsibility for shareholders in a PMA company? In a PMA Company in Indonesia, shareholders typically have limited liability, meaning they’re not personally liable for agreements or losses beyond their shareholding, except in certain circumstances. Liability may extend if the company isn’t properly established or if shareholders exploit the company in bad faith, engage in unlawful acts, or deplete company assets to the detriment of creditors. What responsibilities does a PMA company have in terms of non-tax compliance? In Indonesia, a PMA company is typically required to submit various reports to relevant authorities, such as: Annual financial report Investment realisation report Manpower and employee welfare report Expatriate utilisation report Company loan repot Foreign exchange and prudential principles report However, depending on the business activities and classification relevant authority may require additional reports from a PMA company. Get in touch with us. Lead Form Notify Full NameEmailPlease provide corporate email where possiblePhone NumberOffice SetupWhich city are you planning to expand into?JakartaSemarang/Central JavaBali/LombokBatam/SumateraSurabaya/East JavaOther ProvincesType of Service- Please Select -[SPECIAL PACKAGE] Company Registration + Office Package (20% OFF)[SPECIAL PACKAGE] Product Registration + License Holder (20% OFF)Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesType of Service- Please Select -[SPECIAL PACKAGE] Company Registration + Office Service (20% OFF)[SPECIAL PACKAGE] Comprehensive Industrial Package (15% OFF)Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesType of Service- Please Select -[SPECIAL PACKAGE] Company Registration + Office Service (20% OFF)[SPECIAL PACKAGE] Comprehensive Industrial Package (15% OFF)Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesType of Service- Please Select -[SPECIAL PACKAGE] Company Registration (25% OFF) + Office Space (Private Office 30% OFF)[SPECIAL PACKAGE] Company Registration + Investor KITAS (25% OFF)[SPECIAL PACKAGE] Accounting + Tax Services+ Annual Fintax Report (20% OFF)[SPECIAL PACKAGE] Payroll Services for Executive Role (20% OFF)Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesType of Service- Please Select -[SPECIAL PACKAGE] Company Registration (20% OFF) + Office Service (25% OFF)[SPECIAL PACKAGE] Company Registration + Micro Finance Services (25% OFF)[SPECIAL PACKAGE] Property Assistance: Due Diligence + AJB Purchase/Lease Agreement (25% OFF)Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesType of Service- Please Select -Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesServices Company Registration Renting Virtual and Serviced Office Business and Import Licenses Corporate Recovery and Insolvency Closing of Company (Dissolution) Land and Property Ownership Shelf Company Local NomineeServices Accounting and Tax Reporting Audit and Review Transfer Pricing Compliance Tax RefundHuman Resource Sub Services Payroll Outsourcing Employer of Record Recruitment and HR Establishment Employment ServiceServices Business Visa Work Permit and KITAS Dependent Visa (Spouse and Family) OtherBusiness Visa Subservices Business Visa Visit Visa Visa ExtensionServices Medical Device Beauty (Skincare and Cosmetic) Food and Beverage Health Supplement Household Product Halal Certification TrademarkServices Legal Consultation Legal Agreement Service Due Diligence and Background Check Company Documents RevisionBusiness Advisory Business Advisory Services ESG Reporting & Advisory Internal Audit Risk ManagementMore Services Market Research and Analysis Local Distributor and Partner Bank AccountMessageSubmit What you’ll get A prompt response to your inquiry Knowledge for doing business from local experts Ongoing support for your business Disclaimer The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind. We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials. We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website. More on Business Licenses What You Need to Know About Indonesia’s New Mining Law (UU Minerba) Read more Learn Business From The Top 5 EdTech Companies in Indonesia Read more How do You Register A Company with VAT Liabilities in Indonesia? Read more