Motivations for Implementing Environmental, Social, and Governance (ESG) Practices in Unlisted Family Firms: A Phenomenological Study
Abstract
The increasing emphasis on sustainability in Indonesia has stimulated the adoption of Environmental, Social, and Governance (ESG) practices, particularly within the automotive sector, which entails substantial environmental and social risk exposure. However, extant literature has predominantly focused on publicly listed firms, leaving the motivational foundations of ESG implementation in non-listed family firms-typically characterized by long-term orientation and strong socioemotional ties-insufficiently examined. This study investigates the motivational drivers of ESG adoption in a non-listed family firm through a qualitative phenomenological approach, using PT Agung Automall as a case study.Data were obtained from in-depth interviews with 20 key informants across managerial levels, complemented by observation and document analysis. Data analysis followed the procedures of epoché, horizontalization, meaning clustering, and thematic development, with rigor ensured through triangulation and member checking. Grounded in Stakeholder Theory, Socioemotional Wealth Theory, the Resource-Based View, and Legitimacy Theory, and guided by sector-specific SASB standards for the automotive industry, the findings reveal four dominant motivational mechanisms: internalized family values and long-term commitment, regulatory compliance, owner-driven strategic direction, and external stakeholder pressures.The results further indicate that substantive ESG implementation enhances corporate reputation, reinforces customer loyalty, strengthens governmental relations, and improves organizational resilience during periods of crisis. Notwithstanding these benefits, firms face significant challenges related to organizational culture transformation, infrastructural constraints in regional operations, and high initial investment requirements for environmentally sustainable technologies. This study contributes to the ESG and family business literature by elucidating the motivational logics underpinning ESG engagement in non-listed family firms within emerging market contexts.