Materiality-based review of esg practices in indonesia’s banking sector

¹ Sustainability Science Program, Postgraduate School, Universitas Padjadjaran, Bandung, Indonesia
² Department of Socio-Economic Agriculture, Faculty of Agriculture, Universitas Padjadjaran, Bandung, Indonesia
³ Department of Management, Faculty of Economics and Business, Universitas Padjadjaran, Bandung, Indonesia

^* Corresponding author: This email address is being protected from spambots. You need JavaScript enabled to view it.

Abstract

ESG practice refers to the integration of environmental, social, and governance considerations into corporate strategy to manage material risks and create long-term value. This article reviews ESG practices among Indonesian banks by using a sector-specific materiality map to structure a narrative synthesis of 2024 public disclosures. The review assesses maturity across nine priority topics, including corporate governance, information security, and climate risk. This study addresses a gap in Indonesia, where the explicit use of an industry-specific materiality framework to evaluate banking practices has been limited. By applying the S&P Global ESG Scores industry materiality map as a conceptual benchmark, the research analyzes the 2024 sustainability reports of eight major banks. The findings indicate established governance structures and advanced information security protocols, as evidenced by ISO certifications, while highlighting that transparency in tax strategy and policy advocacy remains basic. Furthermore, the study presents a maturity matrix showing that while sustainable finance product development is progressing, standardized climate metrics require further harmonization. Overall, Indonesian banks show advancing ESG practices, but future progress will depend on enhanced disclosures on policy advocacy and deeper impact measurement.