Companies in Indonesia today navigate two environmental reporting systems with different origins but complementary purposes: PROPER, run by the Indonesian government, and GRI (Global Reporting Initiative), the globally recognized sustainability reporting framework. Understanding how the two work together goes beyond corporate technicality.
It touches on how the public, investors, and local communities get an honest picture of an organization’s environmental performance.
Table of Charts:
- What Are PROPER and GRI?
- Where They Meet and How It Works
- Benefits for Stakeholders
- Challenges and the Road Ahead
What Are PROPER and GRI?
PROPER is Indonesia’s Corporate Performance Assessment Program in Environmental Management, administered by the Ministry of Environment and Forestry (KLHK). The program assigns color-coded ratings to companies, ranging from gold (best) to black (worst), based on their environmental compliance and innovation.
Results are announced publicly, creating real accountability pressure for companies to continuously improve their environmental practices. GRI, on the other hand, is a globally recognized sustainability reporting standard.
It allows organizations to report their most significant impacts on the economy, environment, and society in a consistent and comparable way.
Where They Meet and How It Works
Despite PROPER being national and GRI being international, both rest on the same foundation: transparency about environmental impact. The clearest point of convergence lies in GRI’s concept of “material topics.” GRI defines material topics as those reflecting an organization’s most significant impacts on the economy, environment, and society.
Issues assessed under PROPER, such as wastewater management, air emissions, and hazardous waste handling, naturally fall into the category of material topics that must be disclosed in a GRI report. In practice, data collected for PROPER assessments, covering waste volumes, compliance levels against quality standards, and environmental management programs, can be used directly as input for GRI disclosures.
GRI outlines a four-step process for determining material topics. For companies participating in PROPER, most of these steps are already carried out during the assessment documentation process. GRI also requires disclosure on compliance with applicable laws and regulations. A PROPER rating is a direct reflection of that compliance.
Companies that achieve a green or gold rating hold concrete evidence that can be disclosed in their GRI report as part of their governance and sustainability strategy disclosures.
Benefits for Stakeholders
GRI emphasizes stakeholder engagement as the basis for meaningful reporting. Stakeholders, from investors and local communities to government bodies, have a legitimate interest in an organization’s impacts and deserve accurate information. The integration of PROPER and GRI creates a double layer of transparency: PROPER validates regulatory compliance at the national level, while GRI provides a reporting framework trusted at the global level.
For international investors and business partners, GRI reporting backed by PROPER data carries greater credibility. They receive a complete picture grounded not just in the company’s own claims, but in government-verified data presented within an internationally recognized standard.
Challenges and the Road Ahead
This integration is not without its difficulties. PROPER’s scope is focused on environmental compliance, while GRI covers a far broader range of dimensions, including social issues, labor practices, human rights, and governance. Companies that rely solely on PROPER data for GRI reporting need to recognize that many other material topics still require identification and disclosure.
GRI also reminds organizations that information quality matters. Principles such as accuracy, completeness, consistency, and verifiability must be met. Government-verified PROPER data helps, but companies still need to ensure the way they present that information in a GRI report meets the quality standards required.
That said, the global trend is moving toward increasingly integrated sustainability reporting. Indonesia, through PROPER, already has a robust environmental assessment infrastructure in place. By connecting it systematically to the GRI framework, Indonesian companies can demonstrate their performance to the world in a way that is easier to understand and more credible.
Integrating the two is not about choosing one over the other, but about using both as a mutually reinforcing reporting ecosystem.
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Author: Ainur
Editor: Lina
References
Global Reporting Initiative. (2021). GRI 1: Foundation 2021. Global Sustainability Standards Board.
Global Reporting Initiative. (2021). GRI 2: General Disclosures 2021. Global Sustainability Standards Board.
Global Reporting Initiative. (2021). GRI 3: Material Topics 2021. Global Sustainability Standards Board.