ACGS Part B - Sustainability and Resilience
The ASEAN Corporate Governance Scorecard measures corporate governance against ASEAN regional best practice standards.
Table of Sustainability and Resilience
| Part | Corporate Governance Standards | Implementation |
|---|---|---|
| B.1 | Sustainability-related disclosure should be consistent, comparable and reliable, and include retrospective and forward-looking material information that a reasonable investor would consider important in making an investment or voting decision. | |
| Material Sustainability-related information should be specified | ||
| B.1.1 | Does the company identify/report ESG topics that are material to the organization's strategy? | Material Topics and Support for the Sustainable Development Goals are disclosed with stakeholder involvement and are approved by the President Director as the highest sustainability governance officer, in the Sustainability Report. Priority topics: customer service and protection, anti-corruption compliance/support, community development, occupational health and safety, financial impact of climate change, employment, and support for the SDGs (per Bappenas). |
| B.1.2 | Does the company identify climate change as an issue? | Climate change is identified as a material topic (Economic Performance chapter - Climate Change Financial Risk). An energy-transition vulnerability study was carried out using two climate scenarios, RCP 4.5 and RCP 8.5, covering impacts on electricity demand, hydropower water availability, thermal (coal/gas) plant efficiency, and solar panel performance. |
| B.1.3 | Does the company adopt an internationally recognized reporting framework or standard for sustainability (e.g. GRI, Integrated Reporting, SASB, IFRS Sustainability Disclosure Standards)? | The company adopts the GRI 2021 Standards, 'with reference to the GRI Standards'. The 2024 Sustainability Report also refers to OJK Regulation No.51/2017, the Ministry of Finance's ESG Framework, and the SDGs. |
| If a company publicly sets a sustainability-related goal or target, the disclosure framework should provide that reliable metrics are regularly disclosed in an easily accessible form. | ||
| B.1.4 | Does the company disclose quantitative sustainability targets? | Quantitative targets support the Net Zero Emission aspiration: Long-Term Targets (reduce reliance on coal-fired plants, biomass co-firing/CCS, green hydrogen and ammonia fuel, nuclear technology) and Medium/Short-Term Targets (add renewable capacity, gas expansion, clean coal technology). The Energy Transition Pillar and Sustainable Business Pillar are translated into annual KPI targets. |
| B.1.5 | Does the company disclose sustainability-related performance progress against its previously set targets? | Performance progress is disclosed, including annual realization of sustainability KPIs (economic, environmental, social aspects). A three-year Sustainability Performance Overview (2022-2024) is disclosed. |
| B.1.6 | Does the company confirm that its Sustainability Report is reviewed and/or approved by the Board or a Board Committee? | The 2024 Sustainability Report includes a Statement of Responsibility confirming review and approval by the Directors and Commissioners of the accuracy of the data in the report. |
| B.2 | Corporate governance frameworks should allow for dialogue between a company, its shareholders and stakeholders to exchange views on sustainability matters | |
| B.2.1 | Does the company engage internal stakeholders to exchange views and gather feedback on material sustainability matters? | The company engages employees and shareholders/investors to exchange views and gather feedback on sustainability matters material to its business. |
| B.2.2 | Does the company engage external stakeholders to exchange views and gather feedback on material sustainability matters? | The company engages customers, business partners, government/regulators, creditors, and mass media through testing with groups affected or potentially affected by PLN's decisions/activities/projects. |
| B.3 | The corporate governance framework should ensure that boards adequately consider material sustainability risks and opportunities when fulfilling their key functions in reviewing, monitoring and guiding governance practices, disclosure, strategy, risk management and internal control systems, including with respect to climate-related physical and transition risks | |
| Boards should assess whether the company’s capital structure is compatible with its strategic goals and its associated risk appetite to ensure it is resilient to different scenarios | ||
| B.3.1 | Does the company disclose that the board reviews annually whether its capital and debt structure is compatible with its strategic goals and risk appetite? | Directors and Commissioners periodically review the capital structure, taking into account the cost of capital and related risks. |
| B.4 | The corporate governance framework should recognise the rights of stakeholders established by law or through mutual agreements and encourage active co- operation between corporations and stakeholders in creating wealth, jobs, and the sustainability of financially sound enterprises. | |
| Does the company disclose a policy and practices that address: | ||
| B.4.1 | The existence and scope of the company's efforts to address customer welfare? | The 2024 Sustainability Report describes complaint/customer-satisfaction management, digitalization of customer services, customer data privacy/security, and customer safety, along with customer-satisfaction survey results. Based on the Safety, Occupational Health, Security & Environment Policy and the Environmental & Social Management System (ESMS). |
| B.4.2 | Supplier/contractor selection procedures? | Disclosed: commitment to local suppliers/local content (TKDN), supplier categories, EPC contract dataset, 2024 contract value, and TKDN achievement. Environmental and social assessment of suppliers is conducted via the Contractor Safety Management System (CSMS) and Integrity Due Diligence (Green Procurement Policy). |
| B.4.3 | The company's efforts to ensure its value chain is environmentally friendly or consistent with sustainable development? | Policies: Safety/OH/Security/Environment Policy, Respectful Workplace Policy, Biodiversity & Restoration Policy. Covers environmentally friendly materials (biomass, co-firing, rooftop PV - no formal inventory of eco-labelled materials in the procurement supply chain yet), energy management, biodiversity conservation (partnership with WWF), employment practices, and community aspects. |
| B.4.4 | The company's efforts to interact with the communities in which it operates? | Implementation of the ESMS, Community Social Aspect Policy, and Biodiversity & Restoration Policy through CSR programs (Community Involvement & Development/CID, non-CID, and MSE funding for education & environment); realizations cover beneficiaries, shared value creation, and local employment. |
| B.4.5 | The company's anti-corruption programmes and procedures? | Disclosed: corruption risk management, employee anti-corruption training, conflict-of-interest management, Anti-Bribery Management System (SMAP), integrity pacts for partners, Whistleblowing System (WBS), gratuity control, and reporting of State Officials' Wealth Reports (LHKPN). |
| B.4.6 | How are creditors' rights safeguarded? | The Creditor Rights and Interest Protection Policy is set out in the GCG Guidelines. Disclosed in the 2024 Annual Report and Consolidated Financial Statement Notes (bonds/sukuk ijarah payable, unused loan facilities). |
| B.4.7 | Does the company have a separate report/section discussing its environmental/economic/social efforts? | The 2024 Sustainability Report, the 2024 ESG Performance Report, and the 2024 Taskforce on Nature-related Financial Disclosures (TNFD) report are prepared annually. |
| B.5 | Where stakeholder interests are protected by law, stakeholders should have the opportunity to obtain effective redress for violation of their rights. | |
| B.5.1 | Does the company provide contact details for stakeholders to voice concerns and/or complaints regarding possible violations of their rights? | Contacts are provided: general public - Corporate Secretary/Stakeholder Management Division/email investor.relation@pln.co.id/WBS; customers - PLN 123 Contact Center/PLN Mobile app; suppliers/vendors - vendor day; other stakeholders - WBS (website cos.pln.co.id, WhatsApp 08119861901, email wbpln@pln.co.id). |
| B.6 | Mechanisms for employee participation should be permitted to develop. | |
| B.6.1 | Does the company explicitly disclose policies and practices on employee health, safety, and welfare? | The Respectful Workplace Policy and the Safety, Occupational Health, Security & Environment Policy cover zero-accident initiatives, Enterprise Asset Management (EAM), identification and mitigation of OHS risk, minimum regional wage (UMR), occupational health services, training, turnover, and a decent and safe working environment. |
| B.6.2 | Does the company explicitly disclose its policies and practices on employee training and development programmes? | Governed under Implementing Regulation No.0046.E/DIR/2023 on the Employee Development Management System. The 2024 programme covers overseas formal education (energy transition), number and type of training, pre-service education for new employees, and knowledge management. |
| B.6.3 | Does the company have a reward/compensation policy that accounts for company performance beyond short-term financial measures? | PLN does not yet have a performance-based long-term/sustainability compensation policy for management/employees. Provisions on Long Term Incentives (shares and/or cash) refer to SOE Ministerial Regulation PER-3/2023 Art.109-119. |
| B.7 | Stakeholders including individual employee and their representative bodies, should be able to freely communicate their concerns about illegal or unethical practices to the board and their rights should not be compromised for doing this. | |
| B.7.1 | Does the company have a whistleblowing policy covering complaint procedures for employees and other stakeholders regarding alleged illegal/unethical behaviour, with contact details published? | Implementing Regulation No.0018.E/DIR/2024 (26 June 2024) on the Standard Procedure for the Whistleblowing System (WBS) covers complaint procedures for employees and stakeholders regarding alleged violations/fraud/corruption/bribery. Channels: website cos-pln.co.id, email wb@pln.co.id, WhatsApp 08119861901, and letters to the EVP of Compliance. |
| B.7.2 | Does the company have a policy or procedure to protect an employee/person who reports illegal/unethical behaviour from retaliation? | Set out in the 'Whistleblower Protection' section of the WBS Policy, published on the website, in the Annual Report, and in the Sustainability Report. |
