ESG Reporting Obligations for Companies Under POJK 5

Indonesia’s ESG disclosure requirements are tightening, and many companies are caught underprepared. Under POJK 51, financial institutions, issuers, and public companies in Indonesia are legally required to publish annual sustainability reports and embed ESG considerations into their governance and risk management.  

For companies, the real challenge is not only meeting the ESG reporting requirements but also overcoming common pitfalls such as data gaps, inconsistent disclosures, and a lack of internal ownership, which can undermine stakeholder trust.

Key Takeaways

• POJK 51 requires financial institutions, issuers, and public companies in Indonesia to prepare annual sustainability reports.
• Financial services institutions may also need to prepare an RAKB, or Sustainable Finance Action Plan.
• POJK 51 can also affect private companies, especially when lenders, investors, or business partners request ESG information.
• GRI, IFRS S1/S2, SASB, and TCFD can help improve the quality and comparability of reports.
• A well-prepared sustainability report can support financing, risk management, and stakeholder trust.

What is POJK 51? 

POJK 51 refers to OJK Regulation No. 51/POJK.03/2017 on the Implementation of Sustainable Finance for Financial Services Institutions, Issuers, and Public Companies. Issued by the Otoritas Jasa Keuangan (OJK), the regulation requires covered entities to: 

• Integrate sustainable finance principles into their business strategy, operations, and risk management. 
• Publish an annual sustainability report demonstrating ESG performance across economic, social, and environmental dimensions. 
• For financial services institutions specifically: develop a Sustainable Finance Action Plan (RAKB — Rencana Aksi Keuangan Berkelanjutan). 

POJK 51 is complemented by SEOJK 16/SEOJK.04/2021, which sets out detailed requirements for sustainability reports. Together, these instruments define Indonesia’s core ESG disclosure framework for regulated entities. 

Who Must Comply with POJK 51? 

POJK 51 applies to entities regulated by OJK, with obligations phased by institution type and size. The following are subject to the regulation: 

• Financial services institutions, including commercial banks, rural banks (BPR), insurance companies, multifinance companies, and securities firms. 
• Issuers that offer securities in the Indonesian capital market. 
• Public companies listed on the Indonesia Stock Exchange (IDX) or subject to public company obligations. 

For companies outside the direct scope of POJK 51, the regulation is still relevant. Many private companies are now being asked by lenders, investors, supply chain partners, parent companies, or regional headquarters to provide ESG information. 

This means POJK 51 effectively sets the benchmark for ESG readiness in Indonesia, regardless of whether a company is directly subject to the regulation.

READ MORE:

• Case Study: Building an ESG Strategy for Indonesia’s Railway Sector 
• Understanding ESG Scores: A Key Indicator for Sustainable Business Practices 
• How ESG is Redefining Mining Operations in Indonesia

How POJK 51 Works with GRI, IFRS, and SASB 

POJK 51 establishes the local compliance requirement. International frameworks address how ESG information is measured, structured, and communicated to different stakeholder audiences. 

Framework	Primary Purpose	Jurisdiction	Applicability in Indonesia
POJK 51	Indonesian regulatory compliance	OJK (Indonesia)	Mandatory for financial institutions, issuers, and public companies
GRI Standards	Impact measurement and materiality	Global	Voluntary; widely adopted alongside POJK 51
IFRS S1/S2	Investor-focused financial sustainability	Global	Increasingly expected by institutional and foreign investors
SASB	Sector-specific financial materiality	Global	Supplements IFRS for industry-level context
TCFD	Climate risk disclosure	Global	Relevant for banks and large corporates with climate exposure

These frameworks are not always interchangeable. POJK 51 answers the question of local compliance. GRI explains how the company impacts its stakeholders and the environment. IFRS S1/S2 and SASB connect sustainability performance to investor decision-making and financial materiality. TCFD is particularly relevant for banks and large corporates managing physical and transition climate risks. 

Need support preparing your POJK 51 sustainability report? 

InCorp Indonesia’s ESG Advisory team can help review reporting gaps, structure disclosures, and align your report with Indonesian requirements. Talk to our team -> 

What Should Be Included in a POJK 51 Sustainability Report? 

Under POJK 51 and SEOJK 16, a sustainability report should cover how the company manages sustainability across economic, social, and environmental dimensions. Required disclosure areas include: 

• Company profile 
• Sustainability strategy and explanation from the Board of Directors 
• Sustainability governance 
• Economic performance 
• Social performance, including employment, occupational health and safety, human rights, and community impact 
• Environmental performance, including energy, water, emissions, waste, and biodiversity, where relevant 
• Responsibility for sustainable products or services 
• Independent verification, if available 
• Feedback sheet and response to previous feedback, if applicable 

Some companies also include a GRI Content Index when they align their reports with the GRI Standards. This makes the report easier to review and compare, especially for investors, lenders, and business partners. 

Why POJK 51 Compliance Matters for Business 

For businesses, proper POJK 51 compliance can help: 

Access to Financing 

Indonesian banks and financial institutions are required to apply sustainable finance principles in their credit and investment decisions. Companies with clear ESG disclosures are easier to evaluate and may have an advantage in securing financing. 

Risk Identification 

Structured sustainability reporting often surfaces social and environmental risks, labor disputes, environmental liabilities, and supply chain vulnerabilities that would otherwise remain unmanaged until they become material. 

Investor and Partner Confidence 

As institutional investors, foreign partners, and ESG rating agencies increase scrutiny of Indonesian companies, a credible sustainability report supports due diligence processes. 

Business Continuity 

Sustainability reports that connect ESG performance to business strategy signal long-term governance maturity, an increasingly important signal for lenders and equity investors. 

How Companies Can Prepare for POJK 51 Compliance 

A practical POJK 51 preparation process involves the following steps: 

• Confirm whether the Indonesian entity is directly subject to POJK 51 
• Review whether the company needs an RAKB, a sustainability report, or both 
• Identify the ESG topics that are material to the business 
• Map available data across departments 
• Check whether economic, environmental, and social indicators are measurable 
• Assign internal owners for data collection and approval 
• Align local reporting with group-level ESG or sustainability standards 
• Review whether GRI, IFRS, SASB, or TCFD alignment is useful 
• Prepare supporting documentation before the report is drafted 
• Review the report for consistency, clarity, and compliance before publication 

The strongest sustainability reports are those in which ESG performance is clearly connected to business strategy, risk management, and governance, rather than presented as a standalone compliance document.

Prepare Your Sustainability Report with InCorp 

Compliance with POJK 51 requires more than publishing a report before the deadline. Companies need to understand their specific obligations, collect the right ESG data, and connect disclosures to business strategy and governance in a way that withstands regulatory and investor scrutiny. 

InCorp Indonesia (an Ascentium Company) can support those requirements with: 

• POJK 51 readiness review to understand reporting obligations and current gaps 
• Sustainability report preparation aligned with Indonesian requirements 
• GRI Standards alignment to improve report structure and comparability 
• RAKB preparation for financial services institutions 

Fill out the form below to understand the right next step for your sustainability reporting obligations. 

Frequently Asked Questions