Indonesia’s First Socially Responsible Investment Index

The Indonesian Biodiversity Foundation KEHATI, supported by IDX, the Indonesian Stock Exchange today launched the First SRI Index for Indonesia. The KEHATI-SRI Index will track the performance of Indonesian Corporate Champions with good sustainable business practices and set a reference and benchmark for best practice performance for Investors and Corporations.

The research to set the reference and benchmark of KEHATI-SRI Index is led by OWW Consulting, a leading specialist in Corporate Social Responsibility (CSR) and Socially Responsible Investment (SRI) based in Kuala Lumpur and Singapore.

Socially Responsible Investment is an increasingly important investment style which focuses the environmental, social and governance (ESG) performance of companies as well as their financial performance. Integration of best practices in ESG into the selection of companies for investment portfolios is considered by many investors to reduce the performance risk for their investment.

Indonesian and international investors who focus on SRI now can have a tool to select companies which are in line with their own investment policies. Indonesian companies will also get a clear incentive to be included in the KEHATI-SRI Index to:

• Attract investors who want to invest into sustainable businesses,
• Get the best employees who want to work for the best companies,
• Attract clients who want to mitigate risks in the supply chain.

For many companies, inclusion in the Index will become a strategic management goal.

The KEHATI Biodiversity Foundation, Jakarta, owns the KEHATI-SRI Index and selects the constituents. The Index will be calculated and maintained by the Indonesian Stock Exchange. OWW Consulting provides the underlying ESG methodology and ratings of the companies.

Dr. Damayanti Buchori, CEO KEHATI: “Todays businesses play an important role in the conservation of our natural resources and the protection of biodiversity. In our discussions with Indonesian companies we have seen efforts from companies to implement good “Corporate Citizen” showing responsibility for the environment. We are happy to launch the KEHATI-SRI-Index to promote best practices in Indonesia and to make the efforts transparent to our international network of responsible investors.”

In his welcoming speech, Mr. Erry Firmansyah, the President Director of the Indonesia Stock Exchange stated that, from the point of view of the Indonesia Stock Exchange, the launching of the KEHATI-SRI Index provides additional alternatives for investors. Both Indonesian and foreign investors now have a new a benchmark  that may be useful in accommodating their investing needs. The new index would be especially useful for those investors who are concerned with ESG-based businesses, and also on businesses that prioritize sustainable developments.

James Gifford, Executive Director of the United Nations-backed Principles for Responsible Investment (PRI) stated, “We welcome the development of this index, and congratulate KEHATI – the first PRI signatory in Indonesia – for its leadership in driving it. Investors need to know which Indonesian companies are managing emerging environmental, social and corporate governance issues well, as they now realise these companies are the ones that are best placed to deliver returns over the longer term.”

Dr. Geoffrey Williams, CEO of OWW Consulting, Kuala Lumpur and Singapore: “Best practices in environmental, social and governance processes are essential for businesses hoping to attract investors and maintain the loyalty of other stakeholders such as employees and customers. We are proud that KEHATI has chosen OWW Consulting as the regional specialist for CSR and SRI to provide the necessary methodological frame and data base.”

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