On April 2026, METALAW ESG Practice Team have contributed to the 4th Edition of The Legal 500 Environmental, Social, and Governance (ESG) Comparative Guide specifically in the Indonesia Chapter, published by The Legal 500 which has been analysing law firms across the world.
Under this publication, METALAW ESG Practice Team provides an overview of ESG matters in Indonesia, which was covered through 22 questions in a Q&A format provided by Sylvie Gallage-Alwis of Signature Litigation
This publication answers 22 topics describing the current condition of ESG in Indonesia, which includes questions regarding specific ESG problems, compliances, and trends. The issues discussed in this publication mainly focuses on:
- Regulatory framework on climate and carbon governance in Indonesia, including the implementation of carbon economic value instruments, carbon trading mechanisms, and carbon capture and storage regimes in support of national net zero commitments.
- The legal recognition and regulation of carbon offset mechanisms, including requirements for mitigation planning, verification, and registration under the national climate registry system.
- The absence of established dispute trends in relation to net zero commitments and greenhouse gas contributions, reflecting the relatively early stage of ESG enforcement in Indonesia.
- The environmental permitting regime and biodiversity considerations for project development, particularly the requirement for environmental impact assessments (AMDAL/UKL-UPL) for projects with significant environmental impact.
- Regulatory obligations relating to water usage and reporting, including licensing requirements and periodic reporting obligations for groundwater extraction exceeding prescribed thresholds.
- The current regulatory gaps concerning emerging environmental risks, such as the absence of specific regulations addressing PFAS (forever chemicals), despite increasing awareness of their presence in consumer products.
- The legal framework governing waste management and plastic use restrictions, including producer obligations, waste reduction targets, and regional bans on single-use plastics.
- Employment-related ESG obligations, including non-discrimination, equal pay, workplace protection, and minimum wage requirements aligned with regional economic conditions and cost of living.
- The statutory requirements and enforcement trends relating to human rights due diligence and supply chain accountability, notwithstanding the existence of sector-specific disputes and community-related claims.
- The growing regulatory focus on ESG reporting and sustainable finance, particularly for financial institutions and listed entities, alongside increasing expectations on climate risk management, reporting obligation, and future enforcement trends.
- The recent developments and trends in ESG implementation in Indonesia, including the government’s policy direction towards carbon taxation, the current progress and challenges in achieving renewable energy targets, increasing support from regulators, the growing incorporation of ESG considerations by investors and businesses, as well as the anticipated tightening of ESG-related regulations and a potential rise in enforcement actions and disputes in the near future.
The publication of this Comparative Guide of The Legal 500 by METALAW ESG Practice Team provides answers to the current frequently asked questions in relation to the ESG in Indonesia. METALAW has also contributed to several other articles which discussed Indonesia’s current trend and development of law in Conventus Law.
For further information, please contact:
MetaLAW, Legal & Tax Consultant, Jakarta, Indonesia
general@metalaw.id
