Indonesia faces social challenges in green transition

Indonesia faces a significant challenge in balancing its green energy transition with social development. While technical tools like carbon pricing and climate-risk models are advancing, the social consequences for the workforce are often overlooked.

As of May 2026, Statistics Indonesia reported that of the 148.19 million people in employment, 87.88 million—approximately 59.3%—work in informal activities. For these millions of households, the success of a sustainability transition is measured by job security, adequate income, and social protection rather than ESG scores.

Specific risks include the economic impact on regions dependent on coal mining during a phase-down, and concerns regarding occupational safety and community impacts within new electric-vehicle or mineral-processing value chains.