Impact of ESG on Value Creation for Energy Company: A Case Study on INPEX Corporation

Abstract

Abstract The concept of Environmental, Social, and Governance (ESG) has gained significant attention in recent years, particularly in the business world (Henisz et al., 2019). ESG factors are the criteria used to evaluate the sustainability and ethical impact of a company's operations, and they include aspects such as environmental impact, social responsibility, and corporate governance (Henisz et al., 2019). This paper aims to investigate the value creation concerning the implementation of Sustainability, particularly ESG (Environment, Social Governance) and SDG (Sustainability Development Goals) during the pandemic, COVID-19. This paper also provides insights on how companies can create value from a business ecosystem perspective based on a detailed analysis of a mid-sized energy company, INPEX Corporation. The primary study objective is to investigate ESG and SDG components integration in a company's business development strategy that can influence a company's performance. The study involves a qualitative approach, utilizing the company's annual report (INPEX Corporation, Financial Statement, 2022), the company's business development strategy, 2021 (INPEX Corporation, Business Development Strategy, 2021), and sustainability report (INPEX Corporation, Sustainability Report, 2021). The study finds that ESG and SDG components positively impact INPEX Corporation's financial performance. The findings justify ESG and SDG inclusion in energy companies’ business development strategy, which can increase maximum value to shareholders and stakeholders; for future researchers, we suggest a detailed study on activities that can trigger the impact of ESG on the company's performance. This includes enablers such as technology in emission reduction, energy management, and renewable energies.