Sustainable Finance in Financing Plantation Companies by Banking Case Study of Palm Oil Corporation in Donggala Central Sulawesi Tengah
Abstract
Sustainable finance is a form of financing provided by Financial Institutions (FIs) to debtors by considering sustainability aspects into their decisions. Sustainable finance has not become a serious concern and orientation of FIs in providing credit or financing to debtors. Problem financing reflects the problem of two conflicting economic actors (agency). By conducting an analysis of sustainable financial performance and agency relationship analysis, this study shows that assessing the sustainability performance of a company (the debtor) required detail criteria and indicators of sustainable finance. When disbursing credit, banks cannot only look at the financial health and stability of a company. This is because companies that already have sustainability certification and fulfill administrative aspects still have unresolved Environmental, Social and Governance (ESG) issues. The involvement of the parties in building an “Information Hub” (coordination forum) related to ESG practices centered in the regions is important.
References
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AALI. 2021. Sertifikasi Astra Agro Lestari.
Abood SA, Lee JSH, Burivalova Z, Garcia-Ulloa J, Koh LP. 2015. Relative Contributions of the Logging, Fiber, Oil Palm, and Mining Industries to Forest Loss in Indonesia. Conservation Letters. 8(1):58–67.doi:10.1111/conl.12103.
AI. 2020. Annual Report PT Astra International Tbk 2020. Jakarta.
Bardhan P. 1989. The new institutional economics and development theory: A brief critical assessment. World Development. 17(9):1389–1395.doi:10.1016/0305-750X(89)90080-6.
Brook J. 2022. Palm oil policies succeed on sustainability but fail to resolve Indonesia’s land disputes.
Cazzolla Gatti R, Liang J, Velichevskaya A, Zhou M. 2019. Sustainable palm oil may not be so sustainable. Science of the Total Environment. 652:48–51.doi:10.1016/j.scitotenv.2018.10.222.
Cazzolla Gatti R, Velichevskaya A. 2020. Certified “sustainable” palm oil took the place of endangered Bornean and Sumatran large mammals habitat and tropical forests in the last 30 years. Science of the Total Environment. 742.doi:10.1016/j.scitotenv.2020.140712.
Chitra DSSL, Heenetigala K. 2016. Integrating Environmental, Social and Governance (ESG) Disclosure for a Sustainable Development: An Australian Study. Business Strategy and the Environment.(2008).doi:10.1002/bse.1927.
Creswell JW. 2016. Research Design: Pendekatan Metode Kualitatif, Kuantitatif, dan Campuran. Yogyakarta: Pustaka Pelajar.
Dinas Lingkungan Hidup Sulteng. 2020. Hasil Uji Kualitas Air Desa Towiora. Volume ke-d. Palu.
Dinas Perkebunan dan Peternakan Sulteng. 2021. Daftar Rekapitulasi Perusahaan Perkebunan Besar Swasta Sulawesi Tengah Tahun 2021.
Ditjen AHU. 2021. Profile Terakhir PT Lestari Tani Teladan.
Edwards DP, Laurance SG. 2012. Green labelling, sustainability and the expansion of tropical agriculture: Critical issues for certification schemes. Biological Conservation. 151(1):60–64.doi:10.1016/j.biocon.2012.01.017.
Elly FH, Umboh SJK. 2017. Teori Ekonomi Produksi. Manado: Lembaga Pembinaan dan Pengembangan Pembelajaran Universitas Sam Ratulangi.
Forestsandfinance.org. 2021. Is Your Money Destroying Rainforests or Violating Rights?
Global Witness. 2019. Taxing Times For Adaro. London.
Guild J. 2020. The political and institutional constraints on green finance in Indonesia. Journal of Sustainable Finance and Investment. 10(2):157–170.doi:10.1080/20430795.2019.1706312.
Haddad MD, Maftuchah I. 2015. Sustainable Financing Industri Jasa Keuangan Dalam Pembiayaan Berkelanjutan. Jakarta: Kompas Gramedia.
Höck A, Klein C, Landau A, Zwergel B. 2020. The effect of environmental sustainability on credit risk. Journal of Asset Management. 21(2):85–93.doi:10.1057/s41260-020-00155-4.
INFID, IWGFF. 2014. Studi Landskap Pendanaan Industri Kehutanan dan Perkebunan. Jakarta: INFID-IWGFF.
JC&C. 2020. Jardine Cycle & Carriage Annual Report 2020: Creating Growth for Southeast.
Jensen CM, Meckling HW. 1976. Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics. 3(4):305–360.doi:https://doi.org/10.1016/0304-405X(76)90026-X.
Kemensetneg. 2022. Pemerintah Cabut Ribuan Izin Usaha Tambang, Kehutanan, dan HGU Perkebunan. [diunduh 2022 Jan 17]. Tersedia pada: https://www.setneg.go.id/baca/index/pemerintah_cabut_ribuan_izin_usaha_tambang_kehutanan_dan_hgu_perkebunan
Kementerian Pertanian. 2020. Peraturan Menteri Pertanian Republik Indonesia Nomor 38 Tahun 2020 Tentang Penyelenggaran Sertifikasi Perkebunan Kelapa Sawit.
Keraf AS. 2021. Etika Perbankan. Jakarta: Kanisius.
Leavy P. 2017. Research Design: Quantitative, Qualitative, Mixed Methods, Arts-based, and Community-based Participatory Research Approaches. London: The Guilford Press.
Leins S. 2020. ‘Responsible investment’: ESG and the post-crisis ethical order. Economy and Society..doi:10.1080/03085147.2020.1702414.
Li TM. 2017. After the land grab: Infrastructural violence and the “Mafia System” in Indonesia’s oil palm plantation zones. Geoforum. 96:328–337.doi:10.1016/j.geoforum.2017.10.012.
LTT. 2020. Penilaian Usaha Perkebunan Tahap Operasional (Semseter II Tahun 2020). Donggala.
Market Forces. 2021. Adaro, Indonesia’s coal giant, is seeking to refinance its debt. [diunduh 2022 Jan 11]. Tersedia pada: https://www.marketforces.org.au/research/indonesia/adaro/
Murthy DNP. 2007. Confiabilidade e garantia de produto: visão geral e pesquisas futuras Product reliability and warranty: an overview and future research. 17(3):426–434.
Nugroho B. 2016. Kelembagaan, Karakteristik SUmberdaya, dan Perilaku Aktor: Analisis Kritis Kebijakan Pengelolaan Hutan Indonesia. Bogor: IPB University.
Nurhuda Y. 2019. Lesson Learned From Law Enforcement In Combating Forest Fires And Other Environment & Forestry Related Crimes In Indonesia. Jakarta.
OECD. 2014. ANZ Banking Group, and Inclusive Development International and Equitable Cambodia. oecd.org. [diunduh 2021 Jan 23]. Tersedia pada: http://mneguidelines.oecd.org/database/instances/au0012.htm
OJK. 2019. Kredit/Pembiayaan Perkebunan dan Industri Perkebunan Kelapa Sawit. Jakarta: Departemen Penelitian dan Pengaturan Perbankan OJK.
OJK. 2022. Indonesia Green Taxonomy. Jakarta.
Prakarsa. 2019. Jalan Panjang Keuangan Berkelanjutan.
Responsibank. 2015. Bank Investment on Palm Plantation in PT Wira Mas Permai, Central Sulawesi. 62(8).
Scholtens B, van’t Klooster S. 2019. Sustainability and bank risk. Palgrave Communications. 5(1):1–8.doi:10.1057/s41599-019-0315-9.
Setyowati AB. 2020. Governing sustainable finance: insights from Indonesia. Climate Policy. 0(0):1–14.doi:10.1080/14693062.2020.1858741.
Sugardiman RA. 2021. Live Streaming - Komisi IV DPR RI Rapat Panja Penggunaan, Pelepasan Dan Perusakan Kawasan Hutan.
Sugiyono. 2016. Metode Penelitian : kuantitatif, kualitatif, dan R&D. Bandung: Alfabet.
Syed AM. 2017. Environment, social, and governance (ESG) criteria and preference of managers. Cogent Business and Management. 4(1):1–13.doi:10.1080/23311975.2017.1340820.
The Global Compact. 2004. Who cares wins: connecting financial markets to a changing world, UN; International Finance Corporation (IFC). United Nation.
TuK INDONESIA. 2018. Tycoons in the Indonesian Palm Oil. Jakarta: TuK INDONESIA.
TuK INDONESIA. 2019. A Review of Sustainable Finance Reforms in Indonesia. Jakarta.
Utami K, Purwanto B, Maulana TNA. 2019. Masalah Keagenan dalam Kontrak Bagi Hasil Perbankan Syariah di Indonesia. Jurnal Manajemen dan Organisasi. 9(3):137–149.doi:10.29244/jmo.v9i3.28225.
Weber M. 2009. From Max Weber: Essays in Sociology. London & New York: Routledge.
Wibowo LR, Hakim I, Komarudin H, Kurniasari DR, Wicaksono D, Okarda B. 2019. Penyelesaian Tenurial Perkebunan Kelapa Sawit di Kawasan Hutan untuk Kepastian Investasi dan Keadilan. Bogor Report No.: 247.
Williams C. 1996. Part One An Environmental Victimology. 23(4):16–40.
Williamson OE. 1988. Corporate Finance and Corporate Governance. The Journal of Finance. 43(3):567–591.doi:10.1111/j.1540-6261.1988.tb04592.x.
Wilmar. 2021. Wilmar Grievance List, Astra Agro Lestari. [diunduh 2022 Jan 11]. Tersedia pada: https://www.wilmar-international.com/docs/default-source/default-document-library/sustainability/grievance/grievance-case-report/surat-untuk-pg-letter_walhi_public.pdf?sfvrsn=fc262385_2
Authors
RosalinaL., KartodiharjoH. and SudjitoA. (2023) “Sustainable Finance in Financing Plantation Companies by Banking : Case Study of Palm Oil Corporation in Donggala Central Sulawesi Tengah”, Jurnal Pengelolaan Sumberdaya Alam dan Lingkungan (Journal of Natural Resources and Environmental Management). Bogor, ID, 13(2), pp. 290-304. doi: 10.29244/jpsl.13.2.290-304.
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