Institutional work in making sustainability reporting mandatory in Indonesia through sustainable finance

Abstract

Purpose This study examines the institutional work that led to mandatory sustainability reporting in Indonesia, focusing on ALPHA’s role in introducing GRI-based standards and influencing regulatory evolution under POJK 51/2017. Design/methodology/approach A qualitative approach involving 35 semi-structured interviews with corporations, regulators, NGOs, industry associations, consultants and academics was employed. Thematic analysis uncovered key patterns in the institutionalisation process. Findings ALPHA’s institutional entrepreneurship, boundary work and normative framing spurred early sustainability reporting adoption. Cultural alignment framed reporting as a societal norm, facilitating regulatory acceptance and embedding transparency as a cornerstone of corporate governance under POJK 51/2017. Research limitations/implications Findings are specific to Indonesia. Future research could explore comparative contexts or investigate how voluntary initiatives evolve into regulatory frameworks in other emerging markets. Practical implications Policymakers can enhance regulatory frameworks by aligning them with cultural values, while corporations may view sustainability practices as strategic assets for legitimacy and reputation. Social implications Aligning sustainability reporting with cultural values fosters corporate transparency and builds public trust. Originality/value This study contributes to the institutional work framework by demonstrating how cultural alignment and agency facilitate the institutionalisation of sustainability reporting in an emerging market.