Sustainable businesses have become one of the main factors investors consider before investing their capital.
Today, investors are not only focused on profits, but also on how companies manage environmental, social, and governance risks to ensure long-term growth and resilience.
This shift is becoming increasingly visible in Indonesia and across Asia. Investors now understand that financial reports alone are no longer enough to assess a company’s overall health.
Risks such as social conflicts, environmental violations, and poor corporate governance can quickly impact a company’s reputation and valuation.
Investors Are No Longer Focused Only on Profit
In the past, investors mainly focused on profit, cash flow, and business growth. However, many investors today pay close attention to ESG (Environmental, Social, Governance) factors before making investment decisions.
This change has happened because business risks have evolved. Many major risks are not always visible in financial statements, such as:
- Regulatory sanctions
- Supply chain issues
- Community conflicts
- Governance scandals
- Consumer rejection of company products
When these issues arise, stock prices can drop rapidly even before the company has time to recover.
That is why ESG has become an important tool for investors to identify previously hidden risks, such as:
- Environmental factors help assess a company’s readiness for energy transition and emissions regulations.
- Social factors help evaluate relationships with employees, communities, and consumers.
- Governance serves as an important indicator of corporate integrity.
For investors, ESG is not merely about having an “environmentally friendly” image, but rather a long-term risk management strategy.
Why ESG Can Increase Company Value
Many investors believe that companies with strong ESG strategies are more likely to survive and grow in the long term. There are several reasons why ESG is considered capable of increasing company value:
Reducing Business Risks
Companies that pay attention to environmental and social impacts are generally better prepared to face regulatory changes and market pressure.
Strengthening Reputation
In the digital era, a company’s reputation can change very quickly. Businesses with good relationships with communities and consumers tend to gain greater market trust.
Attracting Long-Term Investors
Institutional investors are increasingly seeking companies with strong governance and clear sustainability strategies.
Creating New Business Opportunities
The transition toward a green economy opens major opportunities in clean energy, electric vehicles, and environmentally friendly technologies.
Younger Generations Are Driving Sustainable Investment Trends
Interest in sustainable businesses is also influenced by changing behavior among younger generations.
According to Morgan Stanley’s Sustainable Signals: Individual Investors 2025 report, the majority of global investors are now interested in sustainable investments, especially Gen Z and millennials.
Young investors believe financial returns can go hand in hand with positive environmental and social impact. They tend to choose companies with clear business direction, transparency, and accountability.
As a result, companies are beginning to realize that sustainability is no longer just an additional branding strategy. It has become an essential factor in maintaining investor appeal.
Transparency Determines Investor Trust
Although interest in ESG continues to grow, investors still have concerns about data quality and greenwashing practices.
Greenwashing occurs when companies appear to support sustainability without taking meaningful action. Because of this, investors place greater trust in companies that:
- Have clear sustainability targets
- Publish ESG reports regularly
- Present measurable data
- Use independent verification
Transparent companies are generally more trusted by investors than businesses that rely only on sustainability slogans without concrete evidence.
In Indonesia, this remains a challenge because ESG reporting standards are not yet fully standardized. Investors therefore need to be more careful when comparing companies across industries and countries.
Renewable Energy Becomes a Major Investor Focus
One sector attracting significant investor attention is renewable energy. Many investors view the energy transition as a major long-term growth opportunity.
Today, energy companies are evaluated not only by profitability, but also by their readiness to transition toward clean energy.
Investors increasingly assess whether companies have clear emissions reduction targets and decarbonization plans.
This is important because global pressure to reduce carbon emissions continues to rise. Companies that adapt too slowly risk losing investor interest and facing future regulatory challenges.
In Indonesia, the potential for clean energy remains enormous, ranging from hydropower and solar power to wind energy. This creates major opportunities for companies looking to build sustainable businesses in the energy sector.
TBS Demonstrates Real Action in Sustainable Business
Amid growing investor attention toward ESG, TBS has demonstrated a strong commitment to renewable energy development in Indonesia.
Through its subsidiary, PT Toba Bara Energi (TBAE), TBS continues expanding its clean energy portfolio through various strategic projects.
In 2020, TBS acquired PT Adimitra Energi Hidro (AEH), the developer of a Mini Hydropower Plant (PLTM) with a capacity of 2x3 MW in Lampung.
The project achieved its Commercial Operation Date (COD) on January 22, 2025, and now contributes 6 MW of clean energy to the Southern Sumatra region.
Besides providing stable and sustainable energy, the project also supports infrastructure development and electricity access for nearby communities.
TBS is also developing a 46 MWp Floating Solar PV project in Tembesi, Batam.
Key achievements of the project include:
- Financial Closing completed in 2024
- Targeted full operation by 2026
- Integration with the national electricity grid
The project is expected to reduce carbon emissions, create green jobs, and support the development of clean energy technology in Indonesia.
TBS’s initiatives show that sustainable business is not only about protecting the environment, but also about creating more stable long-term business growth that is attractive to investors.
As market attention toward ESG continues to increase, companies capable of delivering real action like TBS are likely to gain stronger investor appeal while also supporting Indonesia’s energy transition.
