Business Chemical Industry on the Environment and Green Investment

Indonesia is the developing country that is actively increasing investment to pursue economic growth. In the middle of the economic growth, various aspects are taken to organise economic growth properly. The arrangement of all aspects will obtain maximum economic growth. One aspect that is the main focus of growing economics is industry. As a large country, Indonesia has a large area to develop industry in every single city. The data released by Trading Economics, Industry sector in Indonesia growth in the quarter IV of 2023 reached for 5,05%. This value can happen by Indonesian government’s that make afficiency regulation for operational and legal for each industry. This growth also occurred because the Indonesian government’s active for engagement in diplomatic relation with various countries. Culminating in foreign investment pacts that have served as catalysts for Indonesian economic growth. The increase in forign investment has trigged for foreign industries to opening their factory in Indonesia. One of the industries that is receiving significant attention is the chemical industry. The chemical industry is the downstream of various raw materials to be turned into intermediate goods and product. Therefore, the chemical Industry is an important aspect in the creation of a good and sustainable economic cycle. This good economic cycle is illustrated by data form 2022, chemical industry contributed 10,5% to Indonesia’s gross domestic bruto and the was third largest industrial contributor. The Ministry of National Development Planning/National Development Planning Agency has developed a roadmap to support the development of the chemical industry by integrating a master plan for policy development.

https://img.freepik.com/free-vector/green-energy-generated-by-wind-turbine_1308-78303.jpg?t=st=1729749426~exp=1729753026~hmac=a3d2c27c40809a19c3d5d5c4af70a731962981582e67ef2dc4c5ea47c0d4f350&w=2000

However, the increase of chemical industry creates a boomerang and a domino effect that distrimental to the environment and community life. This can be proven from the research conducted by Syefli Ewimia Darza from the Samudra Padang Maritime Academy, there is chemical pollution from an Indonesian shipping company. Starting from the year 2017 – 2020, there were 76 in the Bintan area and 91 tons in the Batam area. In addition, there was chemical pollution in the form of an oil spill from a tanker ship off the coast of Cilangkap Port. This is what causes environmental damage around the beach. In addition, air pollution also occurs based on research conducted by Devi Anggar Oktaviani and Corie Indria Prasasti based on PM2.5 levels, which state that there are threshold limits that exceed PM2.5 and affect the respiratory health of its workers. Pollution also occurs in river streams. Based on a report by Neffi Erdiana through kompasiana, there has been river pollution by chemicals sourced from PT. Tjiwi Kimia. The company caused the pollution by discharging hazardous liquid waste from its production, as the substance content exceeds the water quality standards. This has created pollution that impacts the surrounding environment and harms the community. This pollution occurs because many chemical industries do not consider pollution based on environmental impact analysis and do not comply with regulations set by the government. In fact, industries that have been granted operating permits should comply with and implement the regulations issued by the government. The government's role must also be proactive in overseeing every chemical industry based on strict criteria and involving various agencies to collaborate in creating a chemical industry circulation that does not pollute the environment.

Due to this environmental impact, investment will be needed to lower pollution and enhance community life through social events and environmental reforestation, which will help rejuvenate the damaged environment, while social interaction between the chemical industry and community life is increased. Such investment is therefore called a green investment. Green investing is a channeling of investment funds from industry into projects and initiatives intending to reduce negative environmental impacts, with assurance in resource efficiency and a low-carbon economy. The areas for consideration in green investment include renewable energies, energy efficiency, sustainable transportation, and efficient natural resource management. In an era where climate change and environmental degradation have become pressing global concerns, green investment is increasingly important as a strategy to reach the goals of sustainable development. It is not just about taking care of environmental perspectives, but also offering considerable social and economic benefits. Companies can help lower emissions of greenhouse gases, reduce pollution, and protect biodiversity by shifting investments away from projects that harm the environment toward those that are more friendly to the environment. Moreover, green investments can create more jobs, improve the lifestyles of communities, and promote sustainable technology development. In the context of the Indonesian chemical industry, which is one of the major sectors in contributing to the country's economic prosperity, green investment could help companies abide by the increasingly stringent environmental regulations while improving their brand image in the eyes of consumers and other stakeholders. Companies can do green investment through a Corporate Social Responsibility program in ways such as environmental-related activities: planting trees, managing waste, and reducing emissions that try to reduce the company's carbon footprint and improve the quality of the environment around the area. Then support the local community through education programs, skills training, and infrastructure development. Companies can provide scholarships, support schools, or train the community with skills that can help in finding better employment. Industry can also invest in health programs for employees and surrounding communities by providing health education, free health check-ups, and awareness campaigns regarding specific diseases. This also includes implementation of high standards for workplace safety in order to protect employees.

When done properly, results from green investments by chemical firms are very significant and trickle down to the benefit of the company and society, as well as the environment. First of all, there would be an increase in operational efficiency for the company and, therefore, a reduction in production costs. In light of adopting eco-friendly technologies and sustainable methods of production, companies will be able to attain a decrease in the consumption of energy and raw materials, waste, and emissions. This contributes to cost savings, as well as adding a layer of competitiveness in a market where sustainability is a factor that increasingly calls into question development.

Thirdly, successful green investment may enhance the reputation of the firm among both consumers and stakeholders. In the context of ecologically conscious consumers, firms showing strategic interest in sustainability would be more ecologically appealing for those customers who are concerned about the ecological consequences of the products consumed. Consequently, this can only lead to increased sales and customer loyalty, which in turn contributes to more revenue growth for the company. On a social level, successful green investments also provide social benefits to local communities. An industry investing in a sustainable project often generates additional, direct and indirect, employment opportunities and develops the local economy. These projects on renewable energy, for example, can provide some kind of job opportunities in the sphere of installation and maintenance; education and training can contribute to enhancing the local labor's skills. Contributions towards the wider SDGs form the final positive impact of green investments. Through contributing to carbon footprint reduction and responsible business practices, Chemical Industries can make valuable contributions to climate protection and environmental care, while at the same time enhancing the lifestyles of all communities. These results really confirm that green investments represent not only a moral duty but also a smart business strategy that can ensure long-term profits and create value for all stakeholders.

The government's role in the regulation of green investments provides an enabling environment for the fostering and promotion of green practices in industrial sectors, such as the chemical industry. First, the government can develop a clear and comprehensive regulatory framework that governs green investments. This would include setting environmental standards to be followed by companies and guidance on best practices concerning green investment. Clearly set rules and regulations will drive companies to invest in environmentally friendly technologies and practices, for they will be aware of what is expected of them. Besides setting standards, incentives offered by the government can also attract green investments. These may include things like tax reductions or subsidies and other forms of financial assistance for projects related to sustainability. In this way, the government is acting not only to reduce the cost burden for companies but also to create an attraction for investors to invest in sustainable projects that accelerate the low-carbon economy and improve the competitiveness of local industries within the global market. The Government can also act as a forerunner in raising awareness and a call for knowledge on green investments for stakeholders. Through education and training programs, the government would allow firms and communities to recognize and realize the benefits of green investments and how these can be implemented. The government should deliver information on the state-of-the-art technologies, best practices, and funding opportunities available for sustainable projects. In addition, the government can play a supervisory role in ensuring that companies comply with existing regulations. It is in this regard that the government could ensure that any practice which may be deterrent to the environment can be avoided through strict supervision and enforcement of laws, so as to guarantee that green investments will actually produce expected outcomes. In addition to the above, strong law enforcement would build confidence in investors that they are investing in a secure and stable environment. This also provides an enabling platform for the government, private sector, and civil society to come together and establish an environment that would be conducive for these green investments. It helps the government facilitate dialogue among all relevant stakeholders, both in the identification of challenges and opportunities for green investment and in better policy formulation. The government can ensure, through this consultative approach, that the regulations applied are effective and related to actual local needs and conditions.