Eco-Innovation, Reducing Carbon Emission and its Impact on Firm Performance (Case Study in Pt Semen Indonesia)

Abstract

Objective: This research was conducted at PT Semen Indonesia Gresik aims to determine the extent of the application of eco-innovation in the company and the extent of the role of management in implementing eco-innovation. This study wants to find out whether the application of eco-innovation carried out at PT Semen Indonesia is able to reduce carbon emissions which is the government's commitment to reduce carbon emissions to the level of 29% by the end 2030. Theoritical Framework: The impact of environmental degradation and environmental externalities becomes a concentration of attention on social issues that encourage companies to pay attention to their business practices and find solutions to the impacts the environment it causes. Resource-Based View Theory (RBV) is a managerial framework used to define strategic resources with the potential to provide a comparative advantage to company. These resources can be leveraged by companies to achieve sustainable competitive advantage. Innovation theory addresses a number of innovation policies and measurement issues such as why companies innovate, what forces drive innovation and what factors hinder it. Related issues are the internal functioning of the company and the types of business practices used to promote innovation. Method: This research uses a qualitative approach inspired by research of Horbach (2008) and Triguero et al. (2013), which proposes three types of eco-innovation: eco-process, eco-product, and eco-innovation organization, but in this study using four types of eco- Innovations as listed in the Oslo manual developed by the Organization for Economic and Cooperative Development (OECD) are: eco-innovation organizations, eco-innovation products, eco-process innovation, and eco-marketing innovation. Data collection techniques carried out in this study include interviews, observations, documentation studies on emission reports and sustainability reports. The data were analyzed by case study research process stated by Creswel (2007). Findings: PT Semen Indonesia has implemented various programs in the context of efforts to reduce greenhouse gas emissions, namely through several programs, namely: (1) Diversification of blended cement products use of clinker which will reduce the emission of CO2 gas (carbondioxide) produced; (2) Utilization of alternative fuels using biomass products, also processing municipal waste into alternative fuel at the Ngipik Gresik landfill; (3) Utilization of flue heat gas operations as power plants which has been implemented at the Tuban plant and is able to reduce CO2 by 130,000 tons per year; (4) Upgrade/Improve equipment (high efficiency tech) Implications: This research has implications that the application of eco-innovation will be able to reduce carbon emissions, which is the Indonesian Government's commitment to reduce carbon emissions by the end of 2030.