Company Commitments to Environmental Protection Through Contractual Agreements

Faculty of Law, Universitas Muhammadiyah Yogyakarta, Yogyakarta, Indonesia

^* Corresponding author: renianggriani@umy.ac.id

Abstract

This study examines the legal significance of contractual agreements as instruments for reinforcing corporate commitments to environmental protection within the framework of Corporate Social Responsibility (CSR). In the context of increasing global environmental concerns, corporations are progressively required to incorporate sustainable development principles into their operational strategies. Indonesian legal instruments, particularly Law No. 40 of 2007 on Limited Liability Companies and Law No. 32 of 2009 on Environmental Protection and Management, provide a normative foundation for the integration of environmental obligations into corporate responsibilities. Employing a normative juridical method, this research analyzes primary legal materials and secondary sources, including scholarly literature, to assess the effectiveness of environmental clauses in business contracts. The case of Danone Aqua in Klaten is critically analyzed to demonstrate the implications of omitting binding environmental commitments in contractual arrangements. The findings underscore the necessity of embedding environmental provisions within corporate agreements to mitigate conflict and enhance sustainability outcomes. This paper concludes that a synergistic approach involving legal enforceability, community participation, and government oversight is essential to advance corporate environmental accountability and ensure alignment with national and international sustainability frameworks.