Lecturer, STIE YPUP Makassar
Keywords: digital business, green innovation, innovation management, sustainability.
WIN Media, Opinion – The world is entering a new phase where climate regulation is no longer merely a recommendation, but a legal instrument that restricts market access. The European Union, for instance, has implemented the Carbon Border Adjustment Mechanism (CBAM), which requires imported products to account for their carbon footprint—a policy that will eventually touch various sectors, including the digital economy (European Commission, 2023).
Amidst the pressure, a fundamental question arises: has Indonesia’s digital business sector, which has long prided itself on exponential growth, considered the environmental consequences of its business models, or does it remain indifferent, feeling “untouched” by carbon regulations?
On the other hand, global capital flows show a shift in preference that is hard to ignore. The Global Sustainable Investment Review reports that global sustainable assets have exceeded USD 30 trillion, while in Southeast Asia, ESG-based investment flows have increased significantly over the past three years (GSIA, 2024). A survey from Morgan Stanley also found that 77% of millennial and Gen Z investors consider a commitment to sustainability a determining factor in their investment decisions (Stanley, 2023). If young investors are already so selective, then why are there still so many digital companies in Indonesia treating sustainability merely as a tool for image-building?
This phenomenon feels paradoxical amidst the rapid growth of the domestic digital business sector. E-commerce, fintech, and edtech continue to achieve high user penetration, yet sustainability narratives often only appear as a “complement” in annual reports or seasonal CSR campaigns, not as the core of corporate innovation strategy (Prasetyo & Hidayat, 2024). Greenwashing practices—environmentally friendly claims without measurable evidence—are still common, while innovations that genuinely reduce ecological impact receive minimal attention in product and technology roadmaps. Is this a sign that innovation management in Indonesian digital companies remains trapped in short-term logic that sacrifices future competitiveness?
This article will critically examine whether innovation management in Indonesian digital companies is truly ready to shift the paradigm from mere greenwashing towards green innovation integrated as a core business. Not to blame, but to invite readers to reflect: have we built an innovation foundation that is not only digital but also responsible for the earth we stand on?
When “Green” Remains a Tagline, Not a Strategy
The phenomenon of greenwashing is palpable when we observe how many Indonesian digital companies claim to be environmentally friendly entities. These claims typically focus on surface-level matters: reduced paper usage, LED lights in offices, or the installation of solar panels in operational buildings—as if green innovation is measured solely by administrative efficiency (Prasetyo & Hidayat, 2024). However, is it true that the greatest environmental impact of digital businesses lies in office paper consumption, or rather in digital infrastructure and supply chains that have far more massive effects?
Let us look at the e-commerce sector, the backbone of Indonesia’s digital economy. Behind the convenience of online shopping lies a mountain of plastic packaging that ends up as waste, delivery logistics contributing significant carbon emissions, and an ecosystem that actually encourages impulsive consumption and fast fashion—all of which are rarely included in corporate sustainability narratives (Hadi & Suryono, 2025). Similarly, data centers that form the foundation of all digital services have enormous electricity consumption, yet transparency regarding the energy sources used remains a rarity among data center operators in Indonesia (Wibowo & Lestari, 2024). Is it not ironic when a company proudly claims to be carbon neutral merely because it purchased carbon credits, while its core operational emission footprint continues to grow without any real reduction efforts?
A more fundamental critique is that the innovations undertaken so far remain limited to operational efficiency to cut costs, rather than to measurably reduce the carbon footprint. When energy efficiency is implemented, the goal is more often to save on electricity bills rather than to meet ambitious emission reduction targets (Santoso & Ramadhani, 2024). Product innovation also has yet to show a paradigm shift: new features are still driven by the logic of increasing engagement and transactions, not by the logic of reducing the ecological impact of each facilitated transaction. Yet, should true innovation not be capable of solving problems, rather than merely optimizing profits?
The consequence of this approach is precarious: when sustainability is only placed within the domain of the “CSR department,” all green initiatives become the first to be cut when short-term profit pressures arise. Studies show that companies that do not integrate sustainability into their core business strategy tend to have environmental initiatives that are reactive and organizationally unsustainable (Fernando & Wahyuni, 2024). In times of economic crisis or intense competition, the CSR budget is the easiest to reduce, while genuinely green innovation requires long-term commitment and consistent resource allocation. So, what does the claim of being “environmentally friendly” mean if it only persists as long as profits are growing in double digits?
Challenges of Innovation Management in Adopting Sustainability
The most fundamental challenge lies in the short-term mindset that still dominates Indonesia’s digital ecosystem. Most startups and digital companies remain trapped in the growth at all costs paradigm, where every investment is measured by quick returns visible within quarters (Hidayat & Prasetyo, 2024). Within such a framework, green innovation—which often takes longer to show financial impact—is easily labeled as an “additional cost” that disrupts capital efficiency. Yet, should not innovation capable of creating long-term resource efficiency and brand differentiation be the most sustainable competitive advantage?
Regulatory limitations further reinforce these structural barriers. Although the Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX) have mandated sustainability reporting for issuers and public companies, these provisions have not been matched with strict sanctions for violators nor attractive incentives for pioneers of green innovation (Kusuma & Wijaya, 2025). Furthermore, the absence of instruments like a “carbon tax” specifically targeting the digital sector means the cost of environmental externalities never enters business calculations. Without a regulatory framework that genuinely drives environmental accountability, can we still expect companies to voluntarily take steps that would burden their short-term profits?
On the other hand, human resource readiness is a critical factor often overlooked. Innovation managers and product teams in Indonesian digital companies rarely possess competencies in life cycle assessment or circular design—two essential skills for creating truly sustainable products and services (Sari & Nugroho, 2024). Formal education curricula and professional training programs have yet to prioritize green digital, creating a significant talent gap. So, how can green innovation flourish if its knowledge foundation has not even been systematically built?
Equally important is the misconception about market perception. Some business actors still assume that Indonesian consumers—especially outside the premium segment—do not care about environmental issues, thus green innovation is considered not to add significant value. However, recent surveys indicate that Gen Z and millennials in urban Indonesia are beginning to consider environmental impact in their transaction decisions, even willing to pay more for products and services proven to be environmentally friendly (Putri & Anwar, 2025). Is not the assumption that consumers do not care precisely the reason they have not been offered responsible choices all along?
From CSR to Core Business – Sustainable Innovation Models
The transformation from mere CSR to core business requires the courage to redefine what is measured and valued within an organization. Making sustainability the core of business means embedding environmental metrics into key performance indicators (KPIs) across all lines, from product teams that must consider the carbon footprint of every feature launched, to supply chains evaluated based on the environmental practices of their partners (Fernando & Wahyuni, 2024). Without measurements embedded in daily performance, will sustainability not merely remain a beautiful dream on paper?
So, what does genuinely integrated green innovation look like? In the realm of the circular economy, marketplaces can go beyond being mere transaction platforms by offering integrated pre-loved features, take-back programs for used goods, or incentive systems for sellers using eco-friendly packaging—steps that several platforms in Indonesia have begun initiating, although still on a limited scale (Hadi & Suryono, 2025). In the digital infrastructure sector, data centers can adopt far more efficient liquid cooling technologies, utilize solar energy for operations, and implement modular designs that allow power usage to scale according to needs, ensuring electricity consumption is no longer a blind spot in corporate sustainability strategies (Wibowo & Lestari, 2024).
Meanwhile, innovation at the digital product layer itself can be directed towards encouraging more responsible consumption behavior, for instance through personal carbon footprint calculator features that help users understand the impact of each transaction they make (Santoso & Ramadhani, 2024). Is it not intriguing to imagine if a shopping app actually reminded us before making an impulsive purchase?
The strategic benefits of this approach extend far beyond merely a positive image in the public eye. Authentic green innovation not only reduces reputational risk and potential future regulatory sanctions but also opens access to funding from ESG-based investors who increasingly dominate the global capital landscape (Kusuma & Wijaya, 2025). In the long term, the resource efficiency generated by this innovation will significantly lower operational costs, while consistent environmental commitment builds much stronger customer loyalty—especially among younger generations who are becoming selective in choosing brands that align with their values (Putri & Anwar, 2025). If all these benefits can be achieved simultaneously, why are some still hesitant to make sustainability the heart of their business strategy, rather than just an appendix in the annual report?
Is Indonesia Ready? Assessing Readiness & Real Steps
Reportedly, there are glimmers of hope beginning to appear amidst a picture that is not yet entirely encouraging. Several logistics startups, for example, have started switching to electric vehicles for last-mile delivery operations—a step that not only reduces emissions but also lowers long-term operational costs (Hadi & Suryono, 2025). Moreover, a number of e-commerce players are beginning to openly report their Scope 1, 2, and 3 emissions in their sustainability reports, demonstrating a level of transparency previously rare in Indonesia’s digital ecosystem. Is this a sign that awareness is shifting from mere rhetoric towards genuine accountability?
At the institutional level, industry associations such as idEA (Indonesian E-Commerce Association) and AFI (Indonesian Fintech Association) have begun incorporating sustainability pillars into their work programs and collective initiatives. This sectoral collaboration is crucial because environmental challenges—such as plastic packaging or logistics carbon footprints—cannot be solved by a single company alone (Prasetyo & Hidayat, 2024). However, have these initiatives been sufficient to drive systemic change, or do they remain merely platforms for sharing best practices without binding compliance mechanisms?
Yet, the biggest gap lies in the minimal cross-stakeholder collaboration involving the government, technology providers, academics, and communities simultaneously. Without an integrated incentive ecosystem—for example, a carbon tax scheme balanced with subsidies for green technology adoption—sustainable innovation will continue to operate in silos without achieving a scale that makes a significant impact (Kusuma & Wijaya, 2025). Is it not ironic if we let each company find its own path, while the root problems—such as non-renewable energy systems or inadequate recycling infrastructure—actually require collective solutions?
Time to Choose
We have seen together that as long as sustainability is treated as an activity outside the core business strategy, green innovation in Indonesia’s digital sector will never reach its full potential (Fernando & Wahyuni, 2024). Is it not time we stopped treating the environment as a separate “social responsibility” and began seeing it as the foundation that determines business resilience itself?
Innovation management must dare to take radical steps: integrating environmental targets into product roadmaps, employee incentive systems, and overall corporate performance evaluations. Without the courage to change what is measured and rewarded, will we only continue to witness sustainability become mere beautiful rhetoric without real execution?
It is time to make green digital a competitive advantage, not just a neatly filed annual CSR report. Companies that transform the fastest—with measurable, transparent, and integrated innovation—will become market leaders in the inevitable low-carbon economy era (Kusuma & Wijaya, 2025).
The question in the title is no longer “are we ready,” but “how fast can we change”—because time is not on the side of those who are only good at storytelling without real action (Putri & Anwar, 2025). So, on which side will we choose to be?