Global Investors are More Selective, Transparency is the Key to Attracting Investment

JAKARTA - The National Committee for Governance Policy (KNKG) emphasized the importance of strengthening transparency and sustainable governance as the main foundation in building investor confidence amid global economic uncertainty.

KNKG Chairman Mardiasmo said that sustainability is no longer just a corporate social responsibility (CSR) program, but has become a key strategy that determines corporate competitiveness.

According to him, companies are required to present annual reports and sustainability reports that are more measurable, transparent, and accountable in line with the implementation of the latest sustainability disclosure standards SPK 1 and SPK 2.

"Public trust must be built on the foundation of openness and integrity," said Mardiasmo in the socialization of the Annual Report Award (ARA) 2025, Monday, May 11.

Mardiasmo emphasized that sustainability reports should no longer be seen as an administrative burden, but as a strategic instrument to mitigate the risk of greenwashing and increase investor confidence.

He added that so far 59 companies have registered in ARA 2025 and KNKG is also encouraging greater participation from Regional Owned Enterprises (BUMD), which has only been followed by six companies.

Meanwhile, the Deputy for Coordination of Management and Business Development of SOEs, Ferry Irawan, assessed that strengthening corporate governance was an important factor in maintaining the attractiveness of Indonesian investment in the midst of global economic dynamics that were full of uncertainty.

According to Ferry, global investors are now more selective in choosing investment destination countries and prioritize countries with strong economic fundamentals, credible regulators, and companies that consistently implement good governance.

"This is an opportunity for Indonesia to continue to strengthen the foundation of its governance both at the macro level and at the corporate level. As a sustainable structural resource," he said.

Ferry said Indonesia's economy still showed strong resilience with economic growth reaching 5.61 percent in the first quarter of 2026, the highest among G20 countries that have released the latest growth data.

He added that this growth was supported by solid domestic consumption, low and stable inflation at the level of 2.4 percent, and the addition of 1.9 million new workers per February 2026.

"The government certainly has a high growth target but is measured by a medium-term target that certainly requires acceleration of investment, productivity improvement, and strengthening of quality sectors ranging from agriculture, manufacturing, downstream, digital economy, and energy resilience," he explained.

Ferry said the government continues to encourage structural reforms through licensing simplification, strengthening the financial sector, and developing local currency transactions to increase investor confidence in the national economy.

"In the financial sector, various reforms are also being carried out, both in the capital market and also how to manage the rupiah exchange rate, for example by strengthening the framework of transactions in local currency or local currency transactions," he explained.

He explained that good corporate governance is not just an internal aspect of the company.

"If there are weaknesses in governance, at the corporate level in the form of inadequate disclosure, weaknesses in internal supervision and unaccountable business practices, this also has the potential to create various risks that we must face together," he said.