Implementation of ESG Principles in Empowering a Local Community-Based Green Economy: A Case Study of Sidan Kapuas Hulu Woven Bag Charm MSMEs

Abstract

This study examines the implementation of Environmental, Social, and Governance (ESG) principles in community-based green economic empowerment with a case study of the Bag Charm Tenun Sidan MSME in Kapuas Hulu Regency, West Kalimantan. The main objective of this study is to analyse how the application of ESG principles can strengthen local economic resilience while maintaining environmental sustainability and cultural preservation. This study uses a qualitative descriptive approach with a case study method through direct observation and semi-structured interviews with business owners, craftsmen, and local stakeholders. The results show that ESG principles have been contextually integrated into daily business activities. From an environmental perspective, this MSME implements eco-efficiency practices through the use of natural materials, fabric waste recycling, and the application of the circular economy concept. From a social perspective, these MSMEs play an important role in women's empowerment through training and employment, while also preserving the traditional Sidan weaving culture, in line with Sustainable Development Goals (SDGs) points 5 and 8. From a governance perspective, business management is conducted transparently based on the principles of Islamic business ethics of adl (justice), amanah (responsibility), and sidq (honesty) and is supported by digital transformation through social media and marketplaces to improve efficiency and transparency. The novelty of this research lies in how ESG principles can be implemented contextually at the rural SME level through local wisdom and collective awareness, thereby making a real contribution to strengthening the sustainable green economy model in Indonesia.