Sustainability Officer in Indonesia’s Palm Oil Companies

Abstract

The purposes of this study are to investigate the role of Sustainability Officer (SO) and to evaluate the effectiveness of SO function in Indonesian palm oil corporations. Using 15 palm oil companies listed in Indonesia Stock Exchange as a sample, this study is conducted using electronic mail survey using Google Forms and then followed by content analysis of companies’ annual reports and sustainability reports. Based on Miller and Serafeim (2014) sustainability categorization, we develop our own framework on sustainability classification to determine the sustainability stage. Since we employ different method, we only used three of their five categories to build our sustainability classification, namely SO’s authority, organizational characteristic-related sustainability and SO’s roles. Using the score we get from previous step, we determine in which sustainability stage Indonesian Palm Oil Company is. Most of Indonesian Palm Oil companies have hired SO. Five of the companies do not have SO or personnel especially given authority to conduct sustainability-related work. The SO can be found in the middle management level to top management level of company’s hierarchy. The educational background and experience of the SO are varied. To sum up, Indonesian palm oil industries are in the stage of compliance. In other words, the majority of them are still in the early stage of sustainability. Most of them engage with SO to fulfil the legal requirement especially the sustainability certification, ISPO (Indonesia Sustainable Palm Oil) and RSPO (Roundtable on Sustainable Palm Oil).