20 Jul 2018
The 2018 Sustainable and Responsible Investment (SRI)-KEHATI Award has been awarded to three public companies – PT Bank Negara Indonesia (Persero) Tbk, PT Bank Rakyat Indonesia (Persero) Tbk, and PT Perusahaan Gas Negara (Persero) Tbk.
Riki Frindos, the Executive Director of the Indonesian Biodiversity Foundation (KEHATI), announced the winners on Wednesday (11/7). Based on the results obtained from the judging panel, these three state-owned corporations stood out due to their exceptional level of environmental awareness and commitment to investing sustainably.
These winners were among 25 companies shortlisted for this prestigious award. All were listed as constituents of the SRI-KEHATI Stock Index.
Riki expressed optimism that the winning companies would inspire others within the SRI-KEHATI Index, setting an example in managing their investments in an environmentally conscious manner.
The SRI-KEHATI Award ceremony for 2018 took place at the Ayana Mid Plaza Hotel, Jakarta, on the evening of Wednesday, July 11, 2018, from 18.00 to 21.00 WIB. The event coincided with the 2018 Indonesia Green Company Award. The KEHATI Foundation, which handles the management of the SRI-KEHATI Index, has conducted the SRI-KEHATI Award four times since its commencement in 2014.
The panel responsible for the determination of the 2018 SRI-KEHATI Award on May 15, 2018, included:
- Prof. Emil Salim, Professor Emeritus of FEB University of Indonesia
- Darwina Wijayanti, who works in Sustainability & Capacity Building at DW Consultant
- Eniya Listiani Dewi, holding the role of Deputy for Agro-Industrial Technology and Biotechnology at BPPT
- Mesnellyarti Hilman, who is an Environmental Observer, and
- Mas Achmad Daniri, a Supervisory Member at KEHATI.
The SRI-KEHATI Stock Index relies on six key indicators for evaluation. These indicators encompass: respect for environment, community advancement, effective governance, ethical business conduct, fair labor practices, and respect for human rights. These six determinants serve as fundamental values that have consistently shaped the underlying principles of the SRI-KEHATI Stock Index.
According to Prof. Emil Salim, the Chair of the Jury Team for the 2018 SRI KEHATI Award, the focus of development up to now has primarily been on economic aspects. Regrettably, critical elements outside this sector are being overlooked, with climate change being the biggest and most apparent consequence. If not effectively addressed, we could face serious impacts such as rising sea levels reaching mainland Jakarta.
Prof. Salim points out that SRI KEHATI’s objective is to promote sustainable and responsible development. The annual awards are part of a broader effort aimed at motivating more corporations to take greater responsibility for the environment and society.
In his words, “The pursuit of profit should not be the only goal. We all, including the business sector, have an obligation to safeguard our environment”. He is also one of the founders of the KEHATI Foundation.
Investing in an Eco-friendly Manner
KEHATI, as cited by Riki, is an Indonesian organization actively participating in the UNPRI (United Nations Principles for Responsible Investment). The key investment principles governed by this agreement cater to environmental, social, and corporate governance (ESG) matters.
To implement these principles effectively, KEHATI collaborated with the Indonesia Stock Exchange (BEI). This alliance bore fruit in June 2009 with the initiation and launch of a stock index. This index, founded on responsible and sustainable investment principles, came to be known as the SRI-KEHATI Index.
The SRI-KEHATI Index comprises 25 companies, chosen bi-annually. The selection process is rigorous and conducted carefully by the SRI-KEHATI Board Committee for inclusion in the SRI-KEHATI constituent list.
Riki elaborated that the given index provides a standard for investors or investment portfolio managers when deciding which public companies perform well in managing their businesses sustainably, considering financial, social, and environmental aspects.
Since being introduced nine years ago, the SRI-KEHATI Index has demonstrated a notably steady performance, with an average value around 10 percent higher than the LQ45 Index and the Composite Stock Price Index (IHSG). Such results indicate a positive reception from investors prepared to pay an elevated price for shares in companies that fall into the sustainable and responsible category.
Investing in instruments based on the SRI-KEHATI Index allows investors to directly contribute to biodiversity conservation. These tools are supervised by an investment manager in partnership with KEHATI.
KEHATI will utilize the entirety of the earnings from the investment manager fee allowances to fund initiatives for the sustainable use of Indonesia’s biodiversity. Importantly, this will not dilute the returns (yield) and function of these investment tools, as confirmed by Riki.