Published in the Journal of Digital Economics and Business (MINISTAL) in 2026, the study arrives at a time when governments worldwide face growing demands for transparency, environmental responsibility, and social accountability. Citizens, policymakers, and civil society organizations increasingly expect public institutions to demonstrate not only how public funds are spent but also how government actions affect communities, social welfare, and the environment.
The research suggests that ESG reporting provides a framework capable of meeting these expectations while helping public organizations align with broader sustainability goals.
Why ESG Reporting Matters in the Public Sector
ESG reporting was originally developed in the corporate sector to evaluate environmental performance, social responsibility, and governance quality. In recent years, however, public institutions have begun adopting ESG principles as part of broader efforts to achieve sustainable development and strengthen public trust.
Unlike private companies, which primarily focus on shareholder value, government organizations serve citizens and broader society. As a result, ESG reporting in the public sector emphasizes public value creation, environmental stewardship, social welfare, and democratic governance.
The study notes that public expectations have evolved significantly. Citizens increasingly want governments to demonstrate measurable contributions to sustainability, climate action, social inclusion, and responsible governance. ESG reporting has emerged as a mechanism that allows public organizations to communicate these efforts in a structured and transparent manner.
Understanding ESG Through Values, Ethics, and Accountability
Rather than focusing solely on numerical indicators, the researchers examined ESG reporting from an interpretive perspective. They analyzed academic literature, sustainability reports, public accountability reports, policy documents, and institutional publications related to ESG implementation in public organizations.
This approach allowed the researchers to explore how government institutions understand and communicate sustainability, responsibility, and accountability.
Their analysis revealed that ESG reporting is not simply a technical reporting exercise. Instead, it functions as a narrative through which organizations express their institutional identity, values, and commitments to society.
Four Major Findings
The study identified four key themes shaping ESG reporting practices in public sector organizations.
1. Sustainability-Oriented Values
Government organizations increasingly use ESG reporting to demonstrate commitments to:
- Environmental protection
- Social welfare
- Inclusive development
- Long-term public value creation
- Sustainable resource management
The findings indicate that organizational performance is no longer viewed solely through financial outcomes. Environmental and social contributions are becoming equally important measures of success.
2. Ethical Responsibility
ESG reporting reflects ethical principles such as:
- Transparency
- Fairness
- Integrity
- Responsibility
- Stakeholder inclusion
Public institutions use ESG disclosures to demonstrate responsible management of public resources and responsiveness to citizen expectations.
3. Expanded Public Accountability
Traditionally, accountability in government focused on financial management and regulatory compliance. ESG reporting broadens that framework by incorporating:
- Environmental impacts
- Social outcomes
- Governance quality
- Stakeholder engagement
- Long-term sustainability performance
This expanded approach enables citizens and stakeholders to evaluate government effectiveness more comprehensively.
4. Building Legitimacy and Public Trust
The research found that ESG disclosures help strengthen institutional credibility. By communicating sustainability commitments and governance practices, public organizations can reinforce public confidence and demonstrate alignment with societal values and sustainable development objectives.
Challenges Remain
Despite the benefits, the researchers identified several challenges in current ESG reporting practices.
One of the most significant concerns involves what researchers describe as "symbolic reporting." In some cases, organizations emphasize successful sustainability initiatives while providing limited information about implementation difficulties, setbacks, or unmet goals.
Such practices may create an overly positive image without fully reflecting organizational performance.
The study argues that effective ESG reporting requires balanced disclosures that include both achievements and challenges. Transparency depends not only on the amount of information reported but also on the credibility and authenticity of that information.
As the authors explain, ESG reporting should function as a genuine accountability mechanism rather than merely a tool for enhancing organizational image.
Implications for Policymakers and Public Institutions
The findings carry important implications for governments and public administrators seeking to improve governance and sustainability performance.
According to Batkunde and Radjawane of Pattimura University, ESG principles should be integrated directly into governance processes rather than treated solely as reporting requirements. Public institutions that embed sustainability into decision-making processes are more likely to achieve meaningful improvements in transparency and accountability.
The researchers also recommend:
- Developing public-sector-specific ESG reporting guidelines
- Improving sustainability data quality and reporting systems
- Increasing stakeholder participation in reporting processes
- Strengthening institutional capacity through ESG training programs
- Integrating sustainability metrics into organizational performance evaluation
These measures could help create more transparent, accountable, and sustainable governance systems capable of addressing contemporary environmental and social challenges.
As governments face increasing scrutiny over sustainability performance, ESG reporting may become an essential tool for maintaining public trust and demonstrating responsible governance.
Author Profiles
Adonia Anita Batkunde is an academic and researcher in the Department of Accounting, Faculty of Economics and Business, Pattimura University, Indonesia. Her research interests include public sector accounting, sustainability reporting, governance, and public accountability.
Erik Piterson Radjawane is a lecturer and researcher at the Faculty of Economics and Business, Pattimura University, Indonesia. His areas of expertise include public governance, accountability systems, sustainability management, and public sector administration.
Source
Article Title: ESG Disclosure Based Reporting Practices in the Public Sector: An Interpretive Study of Values, Ethics, and Accountability
Authors: Adonia Anita Batkunde & Erik Piterson Radjawane
Journal: Jurnal Ekonomi dan Bisnis Digital (MINISTAL)
Year: 2026
Volume/Issue: Vol. 5, No. 2, pp. 145–158
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