ESG as a Corporate Innovation Strategy: Evidence from Kalla Group

Abstract

This study examines Environmental, Social, and Governance (ESG) as a corporate innovation strategy in Kalla Group. The research is motivated by the increasing importance of sustainability in business practices and the need to evaluate whether ESG implementation is integrated into core business models or remains symbolic. The research problem focuses on how ESG is applied across environmental, social, and governance dimensions and its role as a strategic innovation. This study aims to analyze ESG practices using classical and contemporary innovation theories, including Schumpeter’s creative destruction, Christensen’s disruptive innovation, and Chesbrough’s open innovation. A qualitative descriptive approach is employed using secondary data from reports, publications, and relevant literature. The findings indicate that Kalla Group has implemented ESG through clean energy adoption, structured CSR programs, and governance mechanisms such as whistleblowing systems. However, challenges remain in terms of emission measurement, integration across business units, and transparency in ESG reporting. The study concludes that ESG in Kalla Group reflects a form of sustainable innovation but requires stronger system integration and measurable indicators to ensure long-term impact.