Evaluation of PROPER (business performance rating on environmental management) in Indonesia

Department of Business Administration, Faculty of Social and Political Sciences, Diponegoro University

^* Corresponding author: sudhartophadi@yahoo.co.id

Abstract

Proper or Business Performance Rating on Environmental Management is a program promoted by Ministry of Environment, Republic of Indonesia since 1997. Since 2013, innovation was the framework of proper in which participating companies pursue green and gold rank or beyond compliance must adopt eco-innovation and social innovation. In 2023 the number of participating companies reach to 3694 industries. The benefits of achieving gold rank of proper include access to financial institution and investors, and create a good relation with stakeholders. This paper observes the development of proper and analyses the issues arise. The type of research is descriptive analysis relying on secondary data from Proper Secretariat and observation during the presentation of candidate gold rank. The research shows that the number of participants of Proper have been growing, however the level of compliance is declined. With the large number of gold candidate rank, there was no opportunity for the evaluator to do site visit confirming the report with the actual performance. The decentralization and the involvement of more experts in evaluating Proper is required to maintain and to improve Proper as an instrument for achieving business sustainability.