Harmonizing ESG in a local context; integrating social dimension and Kekeluargaan values in the context of Indonesia culture

The increasing emphasis on sustainability in the globalized era has made it a crucial focus for the business sector, which is progressively adopting sustainable practices. Sustainability reporting, particularly in the context of environmental, social, and governance (ESG) criteria, has become vital for companies to disclose their performance and commitment to sustainability. Drawing on existing literature in ESG and sustainability reporting, the research highlights the gap in current practices that overlook social dimensions embedded in local cultures. Kekeluargaan, a term rooted in Indonesian culture, refers to familialism that emphasizes mutual respect, collective responsibility, and harmony within a community or organization. This value is central to organizational behavior in Indonesia and is crucial for understanding local social dimensions of ESG reporting. The study employs a phenomenological approach, involving document analysis and semi‐structured interviews with key stakeholders to understand how Kekeluargaan values can be harmonized with sustainability reporting. Findings reveal that enhancement of Kekeluargaan into sustainability practices enhances organizational cohesion and social responsibility, improving overall ESG performance. The study recommends that companies incorporate local cultural values into their sustainability frameworks to create more holistic and culturally relevant reporting. This approach aligns with global sustainability goals and strengthens the internal organizational culture, leading to long‐term benefits in both social and corporate governance domains.