HK - ESG Implementation & Reporting Training - Rev0

ESG IMPLEMENTING &
REPORTING
TRAINING
For PT. Hutama Karya Persero
By Randy Ismail
Short Story about

Randy Ismail
Randy is Principal Consultant and he has twenty four years’ experience

in HSE, ESG & sustainability fields, with particular emphasis on
provision of auditing and training on GHG Inventory & Verification,
Environmental Management System (ISO 14001), OHS Management
System (OHSAS 18001), Clean Development Mechanism (CDM),
GHG Inventory, Energy Audit, Sustainability Reporting Assurance
(SRA), Equator Principle, and various ESG or HSE compliance audits /
assurance / due diligence, Project HSE Revie(PHSER) and various
registered or non‐registered public and in‐house training for Lead
Auditor course of ISO 14001, OHSAS 18001, GRI, AA 1000 and
various environmental and OHS training or seminar.
A wide range of industrial sector that has been served by him
encompass oil/gas exploration and refinery, mining, forestry, pulp &
paper, petrochemical, fertilizer, cement, chemical, power generation,
automotive, textiles, electronics, metal foundry and food across
Indonesia and few countries in Asia region (India, Singapore, Malaysia,
Brunei, Pakistan,Hongkong, Thailand and Philippines).
2
© SGS ID 2019 ALL RIGHTS RESERVED
For SGS Academy training purpose only.
Reproduction, distribution and posting on the internet or intranet are prohibited.
2
This material only for SGS Academy training purpose only.

No part of material may be reproduced or utilized in any form or by any means, electronic or
mechanical, including photocopying or posting on the internet or an intranet, without prior written
permission from SGS Academy 1
AGENDA – DAY 1
09.00 – 09.15 Opening & Introduction

09.15 – 10.15 Session 1 : Overview of Environmental Social Governance (ESG)
10.15 – 10.30 Break time
10.30 – 12.00 Session 2 : ESG Requirements
12.00 – 13.00 Lunch Break
13.00 – 14.15 Session 3 : ESG Implementation
14.15 – 14.30 Break time
14.30 – 16.00 Workshop 1 : ESG Implementation
16.00 End of Training day 1
© SGS ID 2019 ALL RIGHTS RESERVED 3

AGENDA – DAY 2
09.00 – 10.15 Session 4 : ESG Reporting

10.15 – 10.30 Break time
10.30 – 12.00 Workshop 2 : ESG Reporting
12.00 – 13.00 Lunch Break
13.00 – 14.15 Session 3 : ESG Audit / Due Diligence
14.15 – 14.30 Break time
14.30 – 16.00 Workshop 3 : ESG Audit / Due Diligence
16.00 End of Training day 2


SESSION 1
OVERVIEW OF ENVIRONMENTAL SOCIAL
GOVERNANCE (ESG)
PRESSURE ON AN ORGANIZATION
Customers
Banks and
Insurers
Shareholders
Employees Regulators
The Company
Local
National Media
Media
Neighbours / Community
Parent Company
Legislators

WHAT IS ESG
• ESG stands for Environmental Social and Governance;

• Refers to the three key factors when measuring the sustainability
and ethical impact of an investment in a business or company.
Most socially responsible investors check companies out using
ESG criteria to screen investments;
• It is commonly used by investors to evaluate the behavior of
companies, as well as determining their future financial
performance;
7
• The number of investment funds that incorporate ESG factors has
been growing rapidly since the beginning of this decade, and is
expected to continue rising significantly over the decade to come.

ESG MILESTONES
2005 2018
The term ESG was first
ESG investing is
coined in a landmark study
estimated at over $20
entitled “Who Cares Wins.”
trillion in Asset Under
UNEP/Fi produced
Management or around
the “Freshfield
a quarter of all
Report” which showed that
professionally managed
ESG issues are relevant for
assets around the world
financial valuation.
Business opportunity
to participate on ESG
aspects in 2021
onwards
2004 2006
Former UN Secretary General Kofi The launch of
Annan wrote to over 50 CEOs of the Principles for
major financial institutions, inviting Responsible Investment
them to participate in a joint (PRI) at the New York
initiative under the auspices of the Stock Exchange
UN Global Compact and with the
support of the IFC and the Swiss
Government. The initiative was to
find ways to integrate ESG into
capital markets


WHEN ESG PERFORMANCE FAILED…
SOURCE: INDONESIA SUPREME COURT VERDICT NO. 460 K/PDT/2016
COAL COMPANY (PT. INDOMINCO MANDIRI) CAUGHT DUMPING TONS

OF MINING WASTE (FLY & BOTTOM ASH) IN THE VICINITY OF ITS
COAL-FIRED POWER PLANT, FINED US$ 145,000 IN 2017
SOURCE: WWW.MININGANDENGINEERINGINDO.COM

Multinational company from japan has being implemented EMS
for 6 years and audited by certification body for every 6 months.
They supplied metal sheets to some big automotive and home
appliances manufacturing in indonesia.
They got black proper rating by KLH (ministry of environmental)

in 2014. Their customer planned to withdrawn the contracts if the
company did not improve into blue proper.
SOURCE: KLH WEBSITE


PADA TANGGAL 14 MEI 2013, TERJADI KECELAKAAN KERJA AKIBAT RUNTUHNYA TAMBANG BAWAH TANAH
BIG GOSSAN MILIK FREEPORT DI PAPUA YANG MENELAN KORBAN JIWA HINGGA 28 ORANG. PADA WAKTU
ITU, TERDAPAT 38 PEKERJA YANG BERADA DALAM RUANG KELAS DI FASILITAS PELATIHAN TAMBANG
BAWAH TANAH BIG GOSSAN SAAT RUNTUHNYA SEBAGIAN TEROWONGAN PADA PUKUL 7:30 PAGI WAKTU
SETEMPAT.
BELUM USAI MASALAH TERSEBUT, DI BULAN YANG SAMA TEPATNYA JUMAT (31/5/2013), TERJADI LAGI
KECELAKAAN KERJA TAMBANG BAWAH TANAH DEEP ORE ZONE (DOZ) DI TEMBAGAPURA MILIK FREEPORT.
AKIBAT INSIDEN TERSEBUT SATU ORANG PEKERJA YAKNI SOPIR TRUK MENINGGAL DUNIA.
AKIBAT INSIDEN-INSIDEN TERSEBUT, PEMERINTAH MEMUTUSKAN UNTUK MENUTUP DAN MENGHENTIKAN

AKTIVITAS TAMBANG FREEPORT DI PAPUA HINGGA SELESAINYA INVESTIGASI TERKAIT INSIDEN
KECELAKAAN.
FREEPORT MEMPERKIRAKAN SELAMA MENGHENTIKAN OPERASI SEJAK 15 MEI 2013 HINGGA 11 JUNI 2013
SUDAH KEHILANGAN PRODUKSI 80 JUTA POUND TEMBAGA DAN 80 RIBU OUNCES EMAS.
(HTTPS://FINANCE.DETIK.COM/ENERGI/D-2703379/INI-DAFTAR-KECELAKAAN-TAMBANG-FREEPORT-DI-PAPUA-SEJAK-2013).

MOST FREQUENT AND RELEVANT RISK,

IMPACTS AND OPPORTUNTIES PER SECTOR
12


WHY WE NEED ESMS?
Requirements
Risks
Pressures
Enable to
Consistently foresee and
address issues
confronting your business
ESMS Prevent potential risks

from becoming actual
problems.

ESMS BENEFIT
 Conserving and using energy and materials more efficient

that will help to reduce production costs;
 Reducing waste and discharges, recycling can minimize
costs of waste disposal;
 Clear, transparent human resource policies and
procedures that may improve communication between
workers and managers;
 Effective occupational health and safety management
procedures will enable to reduce injuries and fatalities.
 Proactively and consistently engage with stakeholder to
prevent social issues that may threaten organization’s
license to operate.


WHAT IS MANAGEMENT SYSTEM?
 A management system is a set of processes
and practices to consistently implement your
company’s policies to meet your business
objectives.
 The goal is to make sure that you have the
appropriate policies and procedures in place
and that people consistently follow them.
 The management system helps to assess and
control your risks and is the key to lasting
improvement.
PLAN-DO-CHECK-ACTION (PDCA)


ELEMENTS OF SEMS
(AS PER IFC PERFORMANCE STANDARD
2012)

SESSION 2
ESG REQUIREMENTS

IFC PERFORMANCE
STANDARD 2012
Source:

ESG Requirements
Source:


ESG Requirements
Source:

ESG Requirements
Source:


ESG Requirements
Source:

ESG Requirements
Source:


ESG Requirements
Source:

ESG Requirements
Source:


ESG Requirements
Source:

ESG Requirements
Source:

ESG Requirements
Source:

ESG Requirements
Source:


ESG Requirements
Source:

ESG Requirements
Source:


ESG Requirements
Source:

ESG Requirements
Source:


ESG Requirements
Source:

SESSION 3
ESG IMPLEMENTATION

ENVIRONMENTAL
AND SOCIAL
POLICY

ENVIRONMENTAL
AND SOCIAL
POLICY


ASSESSMENT CRITERIA
Table 2-1 Consequence
Catastrophic Major Medium Minor Low

Consequence
5 4 3 2 1
Environment Impact that is Impact that is Near-source Near-source Near-source
widespread, unconfined and confined and confined and confined and
unconfined and requiring medium term short-term promptly
requiring long-term recovery reversible reversible
long-term recovery, leaving impact impact impact
recovery, leaving residual damage (typically a (typically a (typically a
major residual (typically years) month) week) shift)
damage
(typically years)
Social Significance or Very serious On-going Minor term Low-level
breakdown of widespread serious local social impacts repairable
social impacts social impacts social issues on local damage to
population. commonplace
Mostly structures or
repairable local social
issues

ASSESSMENT CRITERIA
Table 2-2 Likelihood
Likelihood of the impact occurring

Rating Description Frequency
Almost Certain Recurring event during the lifetime of Typically occurs once
5 the operation. per week or more
than once per month
Likely Event that may occur frequently during Typically occurs once
4 the lifetime of the operation. per month
Possible Event that may occur during the lifetime Typically occurs once
3 of the operation. or twice per year
Unlikely Event that is unlikely to occur during the Typically occurs in 1 –

2 lifetime of the operation. 26 years
Rare Event that is very unlikely to occur Greater than 26 year

1 during the lifetime of the operation. event


Table 2-3 Risk Matrix
Consequence
Likelihood Catastrophic Major Medium Minor Low
5 4 3 2 1
Almost Critical Critical Critical High Moderate
Certain 25 20 15 10 5
5
Likely Critical Critical High High Moderate
4 20 16 12 8 4
Possible Critical High High Moderate Low
3 15 12 9 6 3
Unlikely High High Moderate Low Low
2 10 8 6 4 2
Table 2-4 Risk Management Response
Rare High Moderate Low Low Very Low
1 5 4 3 2 1 Risk Class Risk Management Response
Then, the assessment result from each factor is combined to be categorized into four categories: Critical Risks that significantly exceed the risk
acceptance threshold and need urgent
and immediate attention
High Risks that exceed the risk acceptance
RISK MATRIX & threshold and require proactive

management.
MANAGEMENT Moderate Risks that lie on the risk acceptance

threshold and require active
monitoring.
RESPONSE Low Risks that are below the risk
acceptance threshold and do not
require active management.
Very Low Risks that are well below the risk
acceptance threshold and do not
require
Foractive management.
SGS Academy training purpose only. 41
Table 2-5 Environmental and social (aspect impact) assessment and analysis
Scoring
Scoring Result
Consequence
Likelihood
IFC Impact Management

RISKS AND Phase Activities Aspect Impact
PS Category Activities
IMPACTS
ASSESSMENT


MANAGEMENT PROGRAMS
Occupational & Community Safety & Health

Environmental
Social
•Dust management •Grievance mechanism •Community health,
plan Stakeholder engagement safety, and security
•Noise management plan plan
plan •Human resources Occupational health
•Vibration policies and procedures and safety action
management plan plan
•Working conditions and
•Waste management terms of employment Traffic Safety Plan
plan
•Hazardous material
management plan
•Supply chain policy

ORGANIZATIONAL
CAPACITY


COMPETENCY

EMERGENCY PREPAREDNESS AND RESPONSE
 Potential emergency incidents during

construction stage:
 Serious / fatality incident
 Fire
 Potential emergency incident during
operation stage:
 Damage of tower structure
 Serious / fatality incident
 Fire


STAKEHOLDER LIST
Internal Stakeholder External Stakeholder
Pimpinan dan Manajemen Perusahaan Customer/Pelanggan

Pemegang Saham Perusahaan Daerah Air Bersih (PDAB) &
Karyawan Perushaan Daerah Air Minum (PDAM)
Serikat Pekerja Pemerintah Daerah
Supplier / vendor
Kontraktor
Lenders/Bank
Pemerintah Daerah Tingkat 1 (Propinsi) &
Tingkat II (Kotamadya & Kabupaten)
Dewan Perwakilan Rakyat Daerah (DPRD)
Aparat Pemerintahan Kecamatan & Desa
Masyarakat terdampak di sekitar area tapak
dan diluar proyek
Media nasional dan lokal
LSM / Aktivis pemerhati lingkungan dan Hak
Asasi Manusia
Tokoh masyarakat /Pemuda/Agama/Adat

GRIEVANCE
MECHANISMS
PROCESS


MONITORING
AND
REPORTING

WORKSHOP 1
ESG IMPLEMENTATION


WORKSHOP 1 (ESG IMPLEMENTATION)
1. Refer to ESG Risks Matrix for each industrial sector, please identify relevant ESG issues for your
company.
2. Define associated risks (at least 1 risk) for these issues and explain why these risks are relevant.
3. Define relevant mitigation for each identified risks.
4. Provide specific action plan to follow up the proposed mitigation as per ESMS scheme.
5. Present your workshop result.

WORKSHOP 1 (ESG IMPLEMENTATION)

No. Issues Risks Why is Mitigation Action
relevant Plan in
ESMS


SESSION 4
ESG REPORTING
WHY CREATE THE SUSTAINABILITY / ESG

REPORT
Problem One: Problem Two:

Companies receive diverse, Stakeholders and analysts
incompatible requests for receive diverse, incompatible
information corporate reports
Solution:
Standardisation of report format and performance
measurements


WHAT IS SUSTAINABILITY / ESG REPORTING?
• Systematic practice of disclosing sustainability vision,

management practices and resulting performance
• Addresses a company’s integrity, credibility, and transparency

about issues beyond direct financial performance
• Also known as corporate social responsibility, corporate

citizenship, or ESG (environmental, social, governance)
reporting
• Largely a voluntary practice

WHY REPORT?
• Meet what are increasingly basic expectations; including investors,
customers, etc.
• Control message
• Improve reputation
• Improve score with external raters and rankers
• Reduce effort/cost for responding to inquiries
• Build internal engagement
• Refine strategy

TRENDS IN REPORTING
• Mandates from governments and stock exchanges
• Reporting as a stakeholder engagement tool
• Board interest
• Support and enable strategy
• Use of digital and social media
• Alignment among reporting frameworks
• Focus on materiality
• Integrated reporting
• Assurance
REPORTING CHALLENGES
• Less trust than ever • Public relations vs. technical
• Rising expectations, fewer reporting
resources • Multiple audiences
• Show me and prove it • Integrated reporting vs. GRI
• Defensive vs. offensive reporting
• One way vs. two way • Changing media landscape

communication (paper, web, broadcast,
social media)
• Authenticity and transparency
vs. risk management


NATIONAL SUSTAINABLE FINANCE & REPORTING
 Rujukan
• Peraturan Otoritas Jasa Keuangan nomor 51 /Pojk.03/2017
Tentang Penerapan Keuangan Berkelanjutan Bagi Lembaga
Jasa Keuangan, Emiten, Dan Perusahaan Publik
 Lingkup
• Lembaga Jasa Keuangan (LJK) Yaitu Perbankan, Pasar
Modal, Perasuransian, Dana Pensiun, Lembaga Pembiayaan,
Dan Lembaga Jasa Keuangan Lainnya (Pergadaian,
Lembaga Penjaminan, Lembaga Pembiayaan Ekspor
Indonesia, Perusahaan Pembiayaan Sekunder Perumahan,
Dan Badan Penyelenggara Jaminan Sosial), Bank Umum,
Bank Umum Syariah, Bank Perkreditan Rakyat (BPR), Dan
BPR Syariah (BPRS), Emiten Dan Perusahaan Publik.
NATIONAL SUSTAINABLE REPORTING
 LJK, Emiten, dan Perusahaan Publik wajib menyusun

• Laporan Keberlanjutan Yang Disampaikan Setiap Tahun Paling
Lambat Sesuai Dengan Batas Waktu Penyampaian Laporan
Tahunan Yang Berlaku Untuk Masing-masing LJK, Emiten, Dan
Perusahaan Publik, Jika Terpisah Dengan Laporan Tahunan,
Disampaikan Paling Lambat Pada Tanggal 30 April Tahun
Berikutnya
 sanksi administratif berupa teguran atau peringatan tertulis

jika tidak memenuhi ketentuan.


 Jadwal penerapan
• Tanggal 1 Januari Sampai Dengan Tanggal 31 Desember 2019
(LJK Buku 3 & 4 Dan Bank Asing)
• Tanggal 1 Januari Sampai Dengan Tanggal 31 Desember 2020
(LJK Buku 1 Dan 2, IIF, SMI, Perusahaan Terbuka)
• Jika LJK Juga Merupakan Emiten Atau Perusahaan Publik,
Kewajiban Penyampaian Laporan Keberlanjutan pertama Kali
Disampaikan Oleh LJK Untuk Periode Laporan Keberlanjutan Yang
Lebih Awal.

 Sustainability Report may be made as either separable or

inseparable part of the annual report.
 In case Sustainability Report is made separated from the annual
report, it must at least contain the following information:
• Sustainability Strategy Elaboration;
• Summary Of Sustainability Aspects (Economic, Social And Environmental);
• Brief Profile Of Finacial Service Institution (FSI), Issuer Or Publicly Listed Company;
• Description On Board Of Directors;
• Sustainability Governance;
• Sustainability Aspect Performance
• Written Verification From Independent Parties, If Any;
• Feedback Sheet For Reader, If Any; And
• FSI, Issuer Or Publicly Listed Company Response To The Previous Year’s
Feedback.

MAIN CHANGES IN GRI 2021
• Changes in Structure: Three Types of Standards
GRI 2016
GRI 2021

• Impact and Materiality
• GRI 2021 focuses on the horizontal axis only. According to the
revised definition, a material topic is a “topic that reflects the
organization’s most significant impacts on the economy,
environment, and people, including impacts on human rights”.


• Impact and Due Diligence

• Focus on impact means that reporting organizations need a process to identify and manage their
impacts.
• The concept of due diligence almost entirely absent in the first version of the standard, now takes
center stage. It is defined as “the process through which an organization identifies, prevents, mitigates,
and accounts for how it addresses its actual and potential negative impacts on the economy,
environment, and people.”


• Distinction Between Core And Comprehensive Disappears.
• The distinction between reporting only the core disclosures and reporting comprehensively
disappears.
• Either a reporting organization complies with nine reporting requirements (see GRI 1:
Foundation 2021) to claim that it has prepared the report in accordance with the GRI
Standards 2021 OR it can claim that the report has been prepared with reference to the GRI
Standards.
• This means that for all topics that are judged to be material, reporting organizations will need
to include all disclosures, rather than only selected ones.


• Value Chain
• Focus is on the whole value chain, including business relationships, and thus
requires a comprehensive understanding and assessment of the supply chain
performance of a reporting organization.
• Emphases on human right issue
• Impacts on human rights are now expressly included as a General Disclosure

topic in the Universal Standards.
• Previously, human rights-related disclosures were addressed largely in the

GRI 400 series on Social Topics, which a company is only required to report
on if it determines that topic to be material.
• Increasing expectations on companies to be transparent around how they

manage and mitigate human rights risks, and enabling stakeholders such as
investors and asset managers to better identify human rights risks in their
portfolio companies.
TOPIC SPECIFIC STANDARD

(ECONOMIC) (GRI 200)
Number Title of disclosure (Economic)

201-1 Direct economic value generated and distributed
Financial implications and other risks and opportunities due to climate
201-2
change
201-3 Defined benefit plan obligations and other retirement plans
201-4 Financial assistance received from government
Ratios of standard entry level wage by gender compared to local minimum

202-1
wage
202-2 Proportion of senior management hired from the local community
203-1 Infrastructure investments and services supported
Number Title of disclosure (Economic)

203-2 Significant indirect economic impacts
204-1 Proportion of spending on local suppliers
205-1 Operations assessed for risks related to corruption
205-2 Communication and training about anti-corruption policies and procedures
205-3 Confirmed incidents of corruption and actions taken
Legal actions for anti-competitive behavior, anti-trust, and monopoly

206-1
practices


(ENVIRONMENTAL) (GRI 300)
Number Title of disclosure (Environment)

301-1 Materials used by weight or volume
301-2 Recycled input materials used
301-3 Reclaimed products and their packaging materials
302-1 Energy consumption within the organization
302-2 Energy consumption outside of the organization
302-3 Energy intensity
302-4 Reduction of energy consumption
302-5 Reductions in energy requirements of products and services

303-1 Water withdrawal by source
303-2 Water sources significantly affected by withdrawal of water
303-3 Water recycled and reused
Operational sites owned, leased, managed in, or adjacent to, protected

304-1
areas and areas of high biodiversity value outside protected areas
304-2 Significant impacts of activities, products, and services on biodiversity

304-3 Habitats protected or restored
IUCN Red List species and national conservation list species with habitats in
304-4
© SGS ID 2019 ALL RIGHTS RESERVED areas affected by operations 69

(ENVIRONMENTAL) (GRI 300)
Number Title of disclosure (Environment)

305-1 Direct (Scope 1) GHG emissions
305-2 Energy indirect (Scope 2) GHG emissions
305-3 Other indirect (Scope 3) GHG emissions
305-4 GHG emissions intensity
305-5 Reduction of GHG emissions
305-6 Emissions of ozone-depleting substances (ODS)
Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air
305-7
emissions
306-1 Water discharge by quality and destination
306-2 Waste by type and disposal method
306-3 Significant spills
306-4 Transport of hazardous waste
306-5 Water bodies affected by water discharges and/or runoff
307-1 Non-compliance with environmental laws and regulations

308-1 New suppliers that were screened using environmental criteria
308-2 Negative environmental impacts in the supply chain and actions taken


Number Title of disclosure (social)
401-1 New employee hires and employee turnover
Benefits provided to full-time employees that are not provided to
401-2
temporary or part-time employees
401-3 Parental leave
402-1 Minimum notice periods regarding operational changes

TOPIC SPECIFIC 403-1
Workers representation in formal joint management–worker health and
safety committees
STANDARD Types of injury and rates of injury, occupational diseases, lost days, and
403-2
(SOCIAL) (GRI 400) absenteeism, and number of work-related fatalities
Workers with high incidence or high risk of diseases related to their
403-3
occupation
403-4 Health and safety topics covered in formal agreements with trade unions
404-1 Average hours of training per year per employee
404-2 Programs for upgrading employee skills and transition assistance programs
Percentage of employees receiving regular performance and career

404-3
development reviews
405-1 Diversity of governance bodies and employees
405-2 Ratio of basic salary and remuneration of women to men
406-1 Incidents of discrimination and corrective actions taken
Operations and suppliers in which the right to freedom of association and

407-1
collective bargaining may be at risk
408-1 Operations and suppliers at significant risk for incidents of child labor
Operations and suppliers at significant risk for incidents of forced or

409-1
compulsory labor
Number Title of disclosure (social)

410-1 Security personnel trained in human rights policies or procedures
411-1 Incidents of violations involving rights of indigenous peoples
Operations that have been subject to human rights reviews or impact

412-1
assessments
TOPIC SPECIFIC 412-2 Employee training on human rights policies or procedures
Significant investment agreements and contracts that include human
STANDARD 412-3
rights clauses or that underwent human rights screening
(SOCIAL) (GRI 400) 413-1

Operations with local community engagement, impact assessments, and
development programs
Operations with significant actual and potential negative impacts on local
413-2
communities
414-1 New suppliers that were screened using social criteria
414-2 Negative social impacts in the supply chain and actions taken
415-1 Political contributions
Assessment of the health and safety impacts of product and service

416-1
categories
Incidents of non-compliance concerning the health and safety impacts of
416-2
products and services
417-1 Requirements for product and service information and labeling
Incidents of non-compliance concerning product and service information
417-2
and labeling
417-3 Incidents of non-compliance concerning marketing communications
Substantiated complaints concerning breaches of customer privacy and

418-1
losses of customer data
Non-compliance with laws and regulations in the social and economic
419-1
area

SUSTAINABILITY HIGHLIGHTS




TOPICS OF REPORTING


WORKSHOP 2
ESG REPORTING

WORKSHOP 2 (ESG REPORTING)
1. Read the provided sample of Sustainability Report
2. Verify conformance topics of environmental, social and

economic.
3. Identify any finding against GRI requirements on the relevant

topics.


WORKSHOP 2 (ESG REPORTING)
No. Topics Numbers Finding Corrective Action

SESSION 5
ESG AUDIT / DUE DILIGENCE

ESG CORE SERVICES IN INVESTMENT LIFE CYCLE
Invest Operate
- ESG DD (on behalf buyer) - Monitoring ESAP
- Various SGS existing services that
relevant to ESAP (e.g. internal
audit training, compliance audit
etc.)
Identify Integrate Exit

- Initial / Preliminary ESG - Development ESG MS - ESG DD (on
DD (on behalf buyer) - Capacity Building / Training behalf seller)
on ESG MS
- Monitoring ESAP

ESG CORE SERVICES IN PROJECT FINANCE LIFE

CYCLE • Final Monitoring ESAP (on
behalf lender)
• Various SGS existing services
• ESG DD (on behalf that relevant to ESAP (e.g.
lender) • Monitoring ESAP (on
internal audit training,
behalf lender)
compliance audit etc.)
Project
Finance Project Project
Application Approval Operational
Sustainable Project End of life

Finance Construction of loan
Secured
• Development ESG MS • Monitoring ESAP (on behalf
(on behalf borrower) lender)
• Capacity Building / • Various SGS existing services
Training on ESG MS (on that relevant to ESAP (e.g.
behalf borrower) internal audit training,
compliance audit etc.)


ESG STANDARD & GUIDELINES
 Equator Principles
 IFC Performance Standards and Guidelines
 World Bank Safeguard Policies  The International Council on Mining and
Metals (ICMM) Sustainability in the
 ADB Safeguard Policies
Mining Sector
 EBRD Performance Requirements
 CDC Toolkit on ESG for fund managers
 UN Principles for Responsible Investment  Indonesia Infrastructure
 IPIECA The global oil and gas industry
(UNPRI) Finance (IIF) Principles
association for E&S issues
 The UN Global Compact
 World Business Council for Sustainable
 US Private Equity Council Responsible Development (WBCSD)
Investment Guidelines
 ASTM International (ASTM)
 The EDFI Principles for Responsible
Financing and Guidelines for Fund
Investments
Sector Standards and Associations

International Standards National Standards

PROJECT ACTIVITY FLOWCHART
Kick Off Site Visit Key Findings

Meeting
2. Bibliography Study Report

[Project Profile, CLIENT Preparation
AMDAL, H&S,
Document
Request List, etc.]
Final
Presentation
For SGS Academy training purpose only. 84

OBJECTIVES AND SCOPE OF THE
PROJECT
Objectives:
1. Review and Assess
• Adequacy environmental, health, safety, labor and social
management systems
• Ability of the Company to manage Social and Environmental risks and
their business activities
2. Summarize the relevant characteristics of the project related to
S & E aspects.
3. Evaluate the adequacy of the available documentation related
to to S & E aspects.
Scope:
 Operation of PT. XYZ in fabrication yard facility in ABC, on-going
projects and on-hand projects in Indonesia.
METHODOLOGY OF THE SEDD

PROJECT
 Documents Review : Permits, Licenses, Supporting

Documents, etc.
 Interview : Management Personnel,

Employee & Stakeholders
 Walkthrough : Site Observation


PROJECT TIME LINE
Proposal Desktop Study Summary Final Report

acceptance Review Report Report
Day 13-
Day 1 14 Day ?
Day 4-9
• Steps duration
may vary
• Final report
submission
depends on
Site Visit client
Data Request Draft Report
comment
Day 10- Day15-
Day 3 12 23

DELIVERABLES OF THE PROJECT
 ESDD Methodology Plan (prior to site visit)

 Key Finding after Site Visit
 ESDD Report (that covers Executive Summary, key issues
against IFC PS, conclusion and recommendation);
 Recommendation for Corrective Actions Plan (CAP);
 Final presentation
 Final ESDD report based on the final presentation and Lender’s
review.


PERSONNEL WILL BE INTERVIEWED (ENVIRONMENTAL
PART)
 CEO / Top Management

 HSE Department
 HR & GA Department
 Procurement/Purchase Department
 Warehouse / Logistic Department
 Production / Operation Department
 Maintenance / Utility Department
PERSONNEL WILL BE INTERVIEWED (SOCIAL

PART)
 CEO / Top Management

 HR & GA Department
 Procurement/Purchase Department
 CSR Function / Department
 Head of Labour Union [if any]
 Local Workers [male & female]
 Head of Security
 Community Leader/Head of Village
 Governmental Agencies


ADDITIONAL INFORMATION
 Any Authorization to take pictures ?

 Any Limited Area?
 Any Special EHS instructions to know before starting the
site tour ?

 QUESTIONS


WORKSHOP 3
ESG AUDIT / DUE DILIGENCE

WORKSHOP 3 (ESG DUE DILIGENCE)
1. Read the provided project scenario
2. Identify any relevant issues as per IFC PS 1 - 8.
3. For each identified issues, determined any appropriate

recommendation.


WORKSHOP 3 (ESG DUE DILIGENCE)
No. Issues IFC PS Recommendation

THANK YOU


WWW.SGS.COM


HK - ESG Implementation & Reporting Training - Rev0

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ESG IMPLEMENTING &

Short Story about

Randy is Principal Consultant and he has twenty four years’ experience

This material only for SGS Academy training purpose only.

09.00 – 09.15 Opening & Introduction

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09.00 – 10.15 Session 4 : ESG Reporting

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• ESG stands for Environmental Social and Governance;

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SOURCE: INDONESIA SUPREME COURT VERDICT NO. 460 K/PDT/2016

COAL COMPANY (PT. INDOMINCO MANDIRI) CAUGHT DUMPING TONS

WHEN ESG PERFORMANCE FAILED…

They got black proper rating by KLH (ministry of environmental)

SOURCE: KLH WEBSITE

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AKIBAT INSIDEN-INSIDEN TERSEBUT, PEMERINTAH MEMUTUSKAN UNTUK MENUTUP DAN MENGHENTIKAN

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MOST FREQUENT AND RELEVANT RISK,

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ESMS Prevent potential risks

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 Conserving and using energy and materials more efficient

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