The ESG Paradox: A Critique of the Sustainability Narrative Hegemony in the Indonesian Palm Oil Industry

Abstract

This study comprehensively examines Environmental, Social, and Governance (ESG) reporting practices in the Indonesian palm oil industry to uncover the fundamental discrepancy between administrative sustainability narratives and operational realities. The main objective of this research is to dismantle how ESG reporting functions as a hegemonic system that legitimizes corporate dominance without resolving socio-ecological issues at the grassroots level. The method used is interpretative qualitative with a Critical Discourse Analysis (CDA) approach based on Norman Fairclough's model applied to the sustainability reports of large-scale public palm oil companies. The novelty of this research lies in the introduction of the Relational Ambiguity concept to explain the paradoxical gap between document representations that meet compliance standards and the reality of exploitation in the field. The analysis results from various reports show that corporate narratives contain absolute performative claims (such as zero deforestation and one hundred percent traceability) without methodological transparency, systematically suppressing counter-discourses regarding histories of preservation sanctions, certification revocations, and agrarian conflicts. Furthermore, a significant evaluation gap was found among global ESG rating agencies, proving that sustainability metrics are highly susceptible to administrative compliance bias. In conclusion, ESG practices in this industry function more as instruments of symbolic power to maintain capital market legitimacy rather than true accountability mechanisms. Therefore, it is recommended that regulators mandate independent third-party audits and provide inclusion spaces for counter-discourses within ESG reporting standards