© Kemal Jufri / Greenpeace
There is a harsh paradox in today’s sustainability debate. The tools for understanding environmental risk are becoming more sophisticated: financed emissions, climate risk models, taxonomies, transition plans and carbon pricing are increasingly part of the language of business and finance.
This is all important progress. But as the conversation becomes more technical, one question is still too often asked late: what happens to people inside the transition?
For Indonesia, this is not a secondary concern. The country is not only trying to decarbonise a large emerging economy.
It is also undertaking a development transformation: creating better jobs, raising productivity, expanding social protection, building skills and widening the opportunities through which people can improve their lives. The social dimension is not an extension of sustainability. It is where sustainability becomes development.
Indonesia’s labor market structure makes this especially clear. In May 2026, Statistics Indonesia recorded 148.19 million people in employment, of whom 87.88 million — 59.3% — worked in informal activities. For millions of households, therefore, the quality of a transition will not first be experienced through an ESG score or sustainability report.
Rather, it will be experienced through work: whether income is adequate, jobs are safe, skills remain valuable, social protection is available and families can see a credible path to a better future. This changes how sustainability should be judged.
A coal phase-down may reduce emissions while imposing concentrated adjustment costs on regions whose jobs and local economies depend on mining. A new electric-vehicle or mineral-processing value chain may generate investment and export value while raising questions about contractor conditions, occupational safety, community impacts and who captures the gains from industrial upgrading.
This page was last updated August 31, 2026
Written by
Setyo Budiantoro is senior advisor at The PRAKARSA and Fair Finance Asia Advisorty Committee and SDGs ESG expert at the Indonesian ESG Professional Association (IEPA)
