PT Bumi Serpong Damai Tbk (BSDE) has the lowest business risk among the 28 property and real estate issuers listed on the Main Listing Board of the Indonesia Stock Exchange (BEI). BSDE recorded an Environment, Social, and Governance (ESG) Risk score of 14.8, aka low risk.
Joining BSDE in assessing business practices with low risk is PT Ciputra Development Tbk (CTRA) which recorded a score of 18.9. Among the 28 infrastructure issuers listed on the IDX Main Listing Board, only eight have ESG reports. And among these eight issuers, only two are listed as doing business with low risk (BSDE and CTRA). Meanwhile, the other six issuers run their business with medium risk.
ESG Risk Ratings become important when investors analyze their investment potential in the future, and therefore this should not be ignored by companies. Most ESG Risk Ratings ratings, including Morningstar Sustainalytics which is Kompas.com’s reference, measure a company’s exposure to risks and opportunities related to E=environment, S=social and G=governance.
Morningstar Sustainalytics, a 30-year-old ESG research, ratings and analysis agency, calculates ESG risk scores based on two approaches, namely exposure and management. The exposure approach is how they look at the company’s exposure to specific issues and material ESG risks in an industry and how well the company manages these risks according to its business model.
Meanwhile, management approach refers to how well a company manages relevant ESG issues. The Morningstar Sustainalytics management score assesses the robustness of a company’s ESG programs, practices and policies.
The following is a complete list of eight issuers with low to medium ESG Risk Ratings scores:
PT Bumi Serpong Damai Tbk (BSDE) with a score of 14.8 (low risk)
PT Ciputra Development Tbk (CTRA) with a score of 18.9 (low risk)
PT Pakuwon Jati Tbk (PWON) with a score of 20.4 (medium risk)
PT Kawasan Industri Jababeka (KIJA) with a score of 23 (medium risk)
PT Alam Sutera Realty Tbk (ASRI) with a score of 23.2 (medium risk)
PT Lippo Karawaci Tbk (LPKR) with a score of 24.0 (medium risk)
PT Summarecon Agung Tbk (SMRA) with a score of 25.7 (medium risk)
PT Agung Podomoro Land Tbk (APLN) with a score of 26.7 (medium risk)