| Title | Preliminary ESG consideration for geothermal development in Indonesia: What relevant environmental, social and governance aspects need to be taken into account? |
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| Authors | D. Permatasari, Suryantini |
| Year | 2023 |
| Conference | New Zealand Geothermal Workshop |
| Keywords | Geothermal energy, Environmental, Social and Corporate Governance (ESG) factors, Sustainable Development Goals (SDGs) |
| Abstract | Indonesia’s islands are abundant with geothermal energy, a sustainable and environmentally-friendly source of energy. Various research studies have supported the environmental advantages of geothermal energy and its potentials to support the global and national mission of carbon emission reduction to decelerate global warming. More specifically, geothermal energy’s potentials can be harnessed in the Carbon Market Exchange, as well as to support the 17 pillars of sustainable development goals (SDGs), and the environmental, social and governance (ESG) business assessment. ESG is a parameter used to manage business operations risks, which are related to environmental and social impact management and corporate governance activities, all of which have currently become trending topics in various discourses about business development and investment. This paper will attempt at presenting some preliminary discussions related to the potentials of geothermal energy development in Indonesia, related to the ESG aspect. This paper uses an empirical study, surveying about 250 respondents, involving both those who are familiar with the geothermal exploration and exploitation and those who are not. Our survey result revealed that at least 32% of all respondents had already been familiar with the geothermal sector and the challenges of developing this sector in Indonesia, with only about 1.6% still unfamiliar with the term and had never heard of it. About 68.8% of the respondents understood the environmental concerns related to geothermal energy development, starting from greenhouse gas emission, biodiversity, the land borrow-touse permit system, concerns about the stench and noise of energy projects, as well as concerns about the management of domestic waste as well as Hazardous and Toxic Waste. It is also important to take into account the implications that these projects will have on the social and corporate governance aspects. Our survey results also revealed that on average, the respondents have the optimistic view that the development of geothermal energy in Indonesia can also contribute to the national renewable energy mix. The survey results also prove that it is highly important to factor ESG risks into the challenges related to geothermal energy development. The importance of understanding geothermal energy development from the ESG perspective then requires practitioners to boost their basic knowledge and awareness related to ESG, while at the same time requiring them to play an active role in educating relevant stakeholders so the latter can have accurate perception about clean and renewable energy management. |