Implementation of ESG as a Strategy for Business Sustainability in a Public-Listed Tobacco Company in Indonesia

Environmental, Social, and Governance (ESG) has been introduced to the business communities for the past two decades. It has grown in importance as a framework for measuring a company’s sustainability and as a guide for investment decision-making. In Indonesia, the publicly listed companies at the Indonesia Stock Exchange (IDX) have been required to implement and report ESG practices since 2021 through a regulation issued by the Financial Services Authority (OJK) in 2017. Among those is a tobacco company operating in Indonesia, PT HM Sampoerna Tbk. (Sampoerna/The Company/IDX: HMSP) that has been an affiliate of an international tobacco company, Philip Morris International (PMI), since 2005. The tobacco industry’s ESG implementation is particularly interesting due to the adverse externalities generated by its products, which is stated by WHO as one of the biggest issues for public health. This research focuses on analyzing the company’s ESG initiatives and creating improvement strategies in the context of a company operating in the tobacco industry with the objective of maximizing the role of ESG implementation to ensure business sustainability.