GREEN FINANCE PRACTICES IN FUNDING POLICIES OF LEADING TELECOMMUNICATIONS COMPANIES IN INDONESIA: CASE STUDY OF INFRASTRUCTURE SUBSIDIARIES

• Main Author: Sulthan Rasyid Nazera, Afif
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/83250
• Institution: Institut Teknologi Bandung

This research aims to analyze the green financing policies of the Indonesian Telecommunications Company (ITC) with a focus on integrating Environmental, Social, and Governance (ESG) factors. The study examines funding eligibility criteria, the effectiveness of green financial mechanisms, and their impact on the sustainability practices of ITC's subsidiaries, particularly ITC Property. It also evaluates the alignment of ITC Property's operations with ITC's broader ESG objectives. In the context of increasing global environmental concerns and regulatory pressures, corporations are progressively integrating ESG factors into their business strategies to achieve sustainable growth. The telecommunications industry, with its substantial environmental footprint and extensive supply chain, is particularly under scrutiny. ITC, as a leading telecommunications provider in Indonesia, faces the dual challenge of maintaining financial performance while meeting stringent sustainability standards. The necessity to explore green financing options arises from the need to align with global sustainability trends, enhance corporate reputation, and attract ESG-conscious investors. The specific objectives of this study are: 1) To develop a comprehensive framework for integrating green financing into ITC's funding policies, incorporating ESG aspects; 2) To evaluate the eligibility of ITC Property for green funding based on their contribution to sustainable business practices within ITC; and 3) To identify strategies and best practices for ITC subsidiaries to enhance their alignment with ITC's sustainability objectives. The research is grounded on the hypothesis that integrating ESG criteria into ITC's funding policies will not only improve the company's sustainability performance but also enhance its financial stability and attractiveness to investors. It assumes that ITC Property, with adequate adjustments and strategic alignment, can meet the green financing criteria set forth by ITC and other global standards. This study adopts a mixed-methods approach, combining qualitative and quantitative data collection techniques. Data were gathered through semi-structured interviews with key stakeholders within ITC, including departments involved in financial and sustainability initiatives. Additionally, financial and sustainability reports were analyzed to assess the current performance and identify gaps in ESG integration. Case studies of green financing practices in other telecommunications companies provided comparative insights. The research stages include: 1) Literature Review: An extensive review of existing research on ESG integration in funding policies, green financing mechanisms, and sustainability practices in the telecommunications industry; 2) Data Collection: Conducting stakeholder interviews and collecting financial and ESG performance data of ITC Property; 3) Data Analysis: Utilizing the Analytic Hierarchy Process (AHP) to weigh the importance of different ESG criteria and integrating these into ITC's funding policy framework; 4) Framework Development: Creating a comprehensive green financing framework that aligns with ITC's strategic goals and global sustainability standards; and 5) Strategy Formulation: Identifying actionable strategies for ITC Property to enhance its ESG performance and eligibility for green funding. The findings indicate that ITC can significantly improve its funding policies by developing a comprehensive green financing framework aligned with global sustainability standards. A thorough assessment of each subsidiary's financial health and ESG performance is crucial for determining green funding eligibility. Proposed strategies for ITC's subsidiaries include developing comprehensive ESG policies, conducting regular assessments, enhancing ESG reporting, fostering a sustainability culture, and adopting green financing and investment practices. By implementing these recommendations, ITC can optimize its funding strategy, strengthen its sustainability initiatives, and set a new standard for long-term business excellence in the telecommunications industry. This research contributes to the broader discourse on ESG integration, providing valuable insights for other organizations aiming to enhance their sustainability practices. In conclusion, this study offers a robust framework for integrating ESG criteria into corporate funding policies, demonstrating how telecommunications companies can balance financial performance with sustainability goals. The successful application of this framework at ITC will not only improve its market competitiveness but also contribute positively to global sustainability efforts.