Definition: What Is a Sustainability Report?
A sustainability report is an official document prepared and published by a company to explain how its business activities impact environmental, social, and governance (ESG) aspects. To simplify the reporting process, many companies now use platforms such as Reporthink.AI, which helps generate structured sustainability reports that comply with regulations and integrate internal data effectively.
The main objective of a sustainability report is to ensure transparency for stakeholders, including investors, regulators, customers, and the public. It is not merely a communication tool but also a strategic instrument that demonstrates the company’s commitment to sustainable business practices.
Why Has Sustainability Reporting Become Mandatory in Indonesia?
In Indonesia, the urgency to prepare sustainability reports has grown significantly since the Financial Services Authority (OJK) issued Regulation No. 51/POJK.03/2017. This regulation reinforces the position of sustainability reports as a legal obligation, rather than a voluntary initiative.
The regulation encourages companies to align their business practices with sustainability principles, in line with global trends and capital market expectations.
Who Is Required to Prepare a Sustainability Report?
According to OJK Regulation No. 51/2017, the following entities are required to prepare and submit sustainability reports annually:
1. Financial Services Institutions (LJK)
Including:
- Commercial banks
- Insurance companies
- Financing companies
- Microfinance institutions
- Securities companies
2. Issuers and Public Companies
- Issuers are companies offering shares or bonds in the capital market
- Public companies are entities whose shares are owned by more than 300 parties and have a minimum paid-up capital of IDR 3 billion
3. Large-Scale Companies in High-Impact ESG Sectors
Although POJK 51 explicitly names LJKs and issuers, large companies operating in sectors such as:
- Mining
- Energy
- Forestry
- Marine
- Waste-generating industries are often required to prepare sustainability reports as a form of environmental and social accountability.
4. State-Owned Enterprises (SOEs) and Their Subsidiaries
As representatives of the government, SOEs hold additional responsibility to maintain integrity, transparency, and social impact. SOEs are also expected to report their contributions to the Sustainable Development Goals (SDGs).
What Should Be Included in a Sustainability Report?
In line with POJK and GRI Standards, sustainability reports must cover:
A. General Aspects
- Company profile
- Commitment to sustainability
- Sustainability governance structure
B. Economic Aspects
- Direct economic impacts
- Supply chain activities
- Community investments
C. Environmental Aspects
- Energy and water usage
- Emissions and waste
- Nature conservation efforts
D. Social Aspects
- Employee well-being
- Health and safety
- Community development
When Must the Sustainability Report Be Submitted?
OJK 51 stipulates that:
- Submission deadline: The sustainability report must be submitted no later than the company’s annual report
- Reporting period: Usually follows the company’s fiscal year, typically from January to December
What Are the Consequences of Failing to Submit a Sustainability Report?
Although administrative sanctions are not explicitly detailed in POJK 51, non-compliance may lead to:
- Warnings from OJK
- Lower ESG scores from rating agencies
- Decreased interest from institutional investors who focus on sustainability
- Damage to public reputation
How to Start Preparing a Sustainability Report?
Initial steps:
- Identify legal obligations based on your company’s sector and status
- Form a cross-departmental sustainability team
- Collect ESG-related data from all business units
- Determine the reporting framework (GRI, POJK, or SDGs)
- Use technology such as Reporthink.AI to develop structured and duplication-free narratives
Why Is Reporthink.AI Relevant for Sustainability Reporting?
Reporthink.AI is an AI-powered platform specifically designed to help companies prepare sustainability reports efficiently. By integrating GRI and POJK standards with the 5P framework (People, Planet, Prosperity, Peace, Partnership), Reporthink.AI automates the entire reporting process from start to finish.
Advantages of Using Reporthink.AI for Sustainability Reporting
1. Time and Labor Efficiency
- Automated content generation
- ESG indicator mapping linked directly to internal databases
2. Multi-Standard Compatibility
- GRI
- POJK
- SDGs
3. Clear and Data-Driven Narrative Structure
- Each report section follows international standards and includes graphs and interactive visuals
4. Zero Content Duplication
- One data input serves multiple reporting needs
- Language automatically adapted to each disclosure format
Challenges of Manual Sustainability Reporting
Without AI assistance from platforms like Reporthink.AI, companies often face:
- Inconsistent terminology
- Long editing and validation processes
- Dependence on external consultants
With Reporthink.AI, all of these processes can be streamlined and managed internally.
Sustainability Reports as Strategic Tools
A well-crafted sustainability report is more than a compliance document. It can serve as:
- A reputation marketing tool
- Proof of superior governance
- A vehicle for building investor trust
- A basis for long-term strategic decision-making
ESG Data Visualization and Integration with Reporthink.AI
Reports generated with Reporthink.AI do not only contain text but also:
- Interactive charts
- ESG risk matrices
- Visualizations linking business activities to SDGs
FAQ: Sustainability Reporting and Reporthink.AI
Q: What is Reporthink.AI and how does it help with sustainability reporting obligations?
A: Reporthink.AI is an AI platform designed to assist companies in preparing sustainability reports in compliance with POJK and GRI standards. It uses narrative mapping and internal data integration to produce structured, relevant, and publication-ready reports.
Q: Can Reporthink.AI be used by companies preparing their first sustainability report?
A: Yes. Reporthink.AI is beginner-friendly. It provides templates, guided writing prompts, and automation features to help first-time users produce quality reports without relying on external consultants.
Q: How does Reporthink.AI address overlapping requirements between POJK and GRI?
A: Reporthink.AI automatically maps POJK and GRI indicators, removes redundancy, and creates a unified narrative that fulfills both standards simultaneously.
Q: Can reports generated by Reporthink.AI be published directly on a company’s website?
A: Yes. Final reports from Reporthink.AI are available in various formats (PDF, HTML, Docx) and come with visualizations and indexes optimized for online publication.
Q: Does Reporthink.AI support sustainability reporting for SOEs and strategic sectors?
A: Absolutely. Reporthink.AI is fully adaptable for state-owned enterprises, multinational companies, and high-impact sectors such as mining, energy, and agribusiness.
Conclusion
Answering the question who is required to prepare a sustainability report in Indonesia, the obligation applies to all financial services institutions (LJK), issuers, SOEs, and large companies with significant ESG impacts.
However, this obligation should not be viewed as a burden. With a strategic approach and the support of technologies like Reporthink.AI, sustainability reporting becomes a powerful medium to strengthen corporate reputation, build investor trust, and demonstrate tangible contributions to sustainable development.
By understanding and complying with sustainability reporting obligations, companies can craft narratives that not only meet regulations but also resonate with the values and expectations of stakeholders.