ESG Governance, Stakeholder Engagement, and Sustainable Resource Management in Indonesia's Extractive Sector: The Mediating Roles of Corporate Environmental and Social Performance
DOI:
https://doi.org/10.1229/tecempresarialjournal.v21i2.376Keywords:
ESG governance, Stakeholder Engagement, Sustainable Resource Management, Corporate Environmental Performance, Corporate Social Performance, Extractive Industry, Indonesia.Abstract
Extractive companies in emerging economies are under growing pressure to demonstrate that Environmental, Social, and Governance (ESG) commitments translate into responsible resource use. This study examines whether internal ESG governance mechanisms ESG policy implementation (ESG_PI), stakeholder engagement (SE), corporate governance quality (CGQ), environmental management systems (EMS), and social responsibility initiatives (SRI) are associated with sustainable resource management (SRM) in Indonesia's extractive sector, and whether corporate environmental performance (CEP) and corporate social performance (CSP) mediate these associations. A cross-sectional survey was administered to 415 managerial and technical professionals responsible for ESG, sustainability, environmental management, or governance functions in mining, oil, and gas companies located in Indonesia's extractive economic hubs, selected through purposive sampling. Data were analysed with SPSS and covariance-based structural equation modelling (AMOS). All five direct paths to SRM were positive and significant, with the strongest association for SRI (β = 0.184) and the weakest for CGQ (β = 0.072). The largest indirect association ran from ESG_PI through CEP to SRM (indirect effect = 0.203), whereas the indirect associations through CSP were smaller (CGQ: 0.044; SRI: 0.064), indicating partial mediation. Because all constructs reflect the perceptions of company employees, the findings describe the corporate side of ESG governance; they do not measure community experiences, greenwashing, or social justice. The study contributes evidence on how ESG governance mechanisms relate to resource-management outcomes in an under-researched emerging-market setting and outlines how community-level constructs could be operationalised in future research.
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