Leading for Sustainability: ESG Implementation and Performance in Indonesian Forestry Firms

DOI

10.2991/978-94-6239-709-5_178How to use a DOI?

Keywords

Strategic Environmental Leadership; ESG Implementation; Sustainability Performance; Forestry Industry; South Sulawesi; Dynamic Capabilities; PLS-SEM

Abstract

Forestry and wood-based firms face intensifying expectations to demonstrate credible environmental, social, and governance (ESG) performance while sustaining competitiveness. Building on the natural-resource-based view, dynamic capabilities, and upper-echelons logic, this study tests a parsimonious leadership-to-practice-to-performance mechanism in South Sulawesi, Indonesia. We model strategic environmental leadership (SEL) as the independent variable, ESG implementation as the mediator, and sustainability performance (SP) as the outcome. Using a cross-sectional survey of 212 firms selected via proportional stratification by subsector and district cluster, we estimate a variance-based structural equation model. The measurement model meets accepted quality criteria. Structurally, SEL strongly predicts ESG (β = 0.62, p < .001), ESG predicts SP (β = 0.52, p < .001), and a smaller direct path from SEL to SP remains (β = 0.20, p = .002), yielding partial complementary mediation (indirect = 0.32; VAF ≈ 61.5%). Explanatory power is moderate to substantial (R² = 0.39 for ESG; 0.54 for SP) with positive predictive relevance. The findings clarify how leadership, when translated into auditable ESG routines, is associated with improved environmental, stakeholder, and efficiency outcomes. Managerially, prioritising practice depth alongside visible leadership behaviours appears most effective. Policy implications include capability support, targeted incentives, regulatory coherence, and cluster-based platforms to accelerate ESG institutionalisation.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Download article (PDF)

TY  - CONF
AU  - Maria Klara Dhika Ayu Utaminingtyas
PY  - 2026
DA  - 2026/06/20
TI  - Leading for Sustainability: ESG Implementation and Performance in Indonesian Forestry Firms
BT  - Proceedings of the 10th International Conference on Accounting, Management, and Economics (10th ICAME 2025)
PB  - Atlantis Press
SP  - 2556
EP  - 2574
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-709-5_178
DO  - 10.2991/978-94-6239-709-5_178
ID  - Utaminingtyas2026
ER  -