ESG Commitment Provides Company Protection During Global Crises - Babel Insight

Implementation of social responsibility and sustainability principles is considered capable of protecting companies from the adverse impacts of interconnected global crises in Indonesia. Based on information sourced from Lestari, a strong commitment to environmental, social, and governance aspects—or ESG—strengthens corporate positions compared to competitors.

Jalal, Chairperson of the Advisory Board of Social Investment Indonesia, explained that strong CSR and ESG performance positively impacts company resilience. This phenomenon arises from the internal protections formed by consistent sustainability policies.

“Based on research conducted, companies with high CSR, ESG, and sustainability performance will produce an insurance effect,” said Jalal during the webinar Beyond ESG Score; What Are the Actual Benefits for Companies in Conducting Shadow Rating, on Friday (8/5/2026).

Although financial performance generally declines during crisis periods, companies that maintain ESG programmes record more moderate contractions. This group of companies is also predicted to experience far more significant recoveries once conditions begin to improve.

“They all decline, but the decline is not as deep as those with low CSR, ESG, and sustainability performance. When the bounce-back period occurs, meaning the crisis tends to end or pass, those with high CSR, ESG, and sustainability performance will return to their original positions more quickly,” Jalal stated.

Jalal added that research categorises such companies as ‘antifragile’. These companies not only return to their starting point but also have the potential to record superior performance after navigating market turmoil.

A strategic perspective in viewing ESG as an investment, rather than merely a cost burden, is the key to corporate success. If seen as a cost, ESG budgets are typically cut immediately during crises; however, as an investment, long-term goals are pursued even in difficult conditions.

“But they may need to rethink efficiency; they must reconsider alternative ways to achieve the set targets. So there is no reduction in targets at all, no decline in performance whatsoever,” said Jalal.

New strategies and tactics need to be devised to face crisis challenges without sacrificing established sustainability targets. This is done to maintain operational stability and stakeholder trust amid political and economic uncertainty.