The Position of Sustainability in the Transformation of State-Owned Enterprises

The integration of BUMN under Danantara marks a new phase in portfolio structuring and strengthening the role of state-owned enterprises. The agendas of efficiency, governance, and competitiveness are being pursued simultaneously. Amidst these agendas, one question must be answered: where is the position of sustainability in this transformation?

Sustainability, or ESG (Environment, Social, and Governance), has tended to be treated as a matter of reporting or a reputational complement. This view needs to be corrected. Findings from PwC’s 29th Global CEO Survey (2026) show that sustainability issues are increasingly intertwined with business and financial matters. Climate topics and stakeholder trust, for example, are now directly linked to financial risk, the speed of decision-making, and company value creation. They can even influence a company’s market share or a country’s investment feasibility.

For Indonesian BUMN, the impact is extensive, ranging from energy and supply chain resilience, operational cost efficiency, and the sustainability of export market access, which affects the national trade balance, to climate risk preparedness. Therefore, sustainability and ESG can no longer be viewed as separate agendas but must be an integral part of business transformation.

The PwC survey also noted that 42 percent of respondents stated their companies have at least moderate exposure to the risk of significant financial loss due to climate change in the next 12 months. In this context, climate has become a variable that must be considered in operational and strategic decisions, not just a compliance issue or something to be reported. However, corporate readiness is not yet commensurate. Only 24 percent of respondents stated their companies have clear processes for incorporating climate considerations into supply chain and sourcing decisions. The same figure applies to product design and development. For capital allocation related to ESG and climate, including mergers and acquisitions, the figure is around 20 percent. This gap indicates that in many companies, including BUMN, risk exposure has been identified but not yet systematically integrated into the decision-making process.

The question is how to close this gap to support more prudent business decisions. For BUMN, this can start from three areas. First, capital planning and allocation. Climate risk needs to be a component in assessing the feasibility of investments, capacity expansion, asset rejuvenation, and corporate actions. Decisions that only consider short-term needs without accounting for future asset resilience and cost profiles will increase the company’s exposure to stranded costs. Second, operational and supply chain management. Climate data, water availability, and natural resource carrying capacity can be used to assess supplier vulnerability, energy supply reliability, and potential logistical disruptions. Companies with this information are better prepared to diversify suppliers, improve energy efficiency, and develop structured supply security measures. Third, product strategy and market access. Sustainability requirements in international markets are increasing, both through destination country regulations and buyer expectations. Companies that adapt their product design and export strategies to these standards earlier will have a stronger position.

Data and opinions from survey respondents also show that companies with clear processes for integrating climate considerations into business decisions tend to respond more quickly to changes in demand and market dynamics. This means ESG integration does not slow down processes but can actually help BUMN improve their agility and accuracy of response. A similar trend is seen from the financing side. Financial institutions in the region, including major banks in ASEAN and Asia, are increasingly incorporating climate and nature considerations into credit assessments, underwriting, and investment decisions. This aligns with the adoption of global standards such as TCFD and TNFD. For Indonesian BUMN, this means future access to and the cost of financing will be increasingly influenced by the quality of sustainability performance, not just financial performance alone. BUMN that can demonstrate measurable and credible sustainability data and progress will be in a more advantageous position to access funding.

The second dimension that requires equal attention is stakeholder trust. In the same survey, 66 percent of respondents stated their companies faced trust-related concerns at least at a moderate level in the last 12 months. This trust encompasses issues of AI security, data privacy, transparency, and the impact of climate on business performance. This finding is not merely a perception. PwC research shows that public companies with high levels of trust recorded total shareholder returns 9 percent higher over 12 months compared to companies with low trust levels. This means trust has a direct impact on company valuation and financial performance. For BUMN, this means trust must be managed as a governance agenda at the board of directors and board of commissioners level. Strengthening trust requires investment in data quality, internal control processes, and reporting standards. And this is where the two dimensions, climate risk and trust, converge. Both require a strong data foundation, continuously monitored implementation, and transparency and communication.