Journal on Education

Volume 05, No. 03, Maret-April 2023, pp. 9637-9645

E-ISSN: 2654-5497, P-ISSN: 2655-1365
Website: http://jonedu.org/index.php/joe

Scenario Planning for Esg Implementation at PT Kereta Api Indonesia

(Persero)

Jehan Nurbani1, Santi Novani2

1,2
Institut Teknologi Bandung, Jl. Ganesa No.10, Lb. Siliwangi, Kecamatan Coblong, Kota Bandung, Jawa Barat
jehan_nurbani@sbm-itb.ac.id

Abstract
Sustainable business is currently become an important issue, because it can give added value beside the
economic value, that is beneficial for environmental, social, and governance. Therefore, ESG (Environmental,
Social, and Governance) concept is implemented to achieve this target. PT Kereta Api Indonesia (Persero)
currently have a plan for ESG implementation, that is also having a challenge in the process. The objective of
this study is to analyze the possible scenarios for ESG implementation. This study used qualitative method,
where the data is obtained with primary data and secondary data. Data obtained is analyzed using tools such as
PESTEL, Porter's Five Forces, and Resource-Based View. Then, it was continued with scenario planning
analysis, using 5 stages, including 1) orientation, 2) exploration, 3) scenario creation, 4) option creation, and 5)
integration. The study resulted 4 scenarios, 1) High-speed Railway, 2) Commuter Line, 3) Steam Locomotive,
and 4) Diesel Locomotive. These scenarios were created by considering the two critical uncertainties from
identified driving forces which are government’s regulation and funding policy. Through these four scenarios
generated, the company is expected to be able to deal with uncertainties in the future well, so that ESG
implementation plan can run effectively and efficiently.
Keywords: Scenario Planning, Strategic Planning, ESG, Sustainability.

Abstrak
Bisnis yang berkelanjutan saat ini menjadi isu penting, karena hal itu dapat memberikan peluang untuk meraih
nilai tambah yang bermanfaat bagi lingkungan, sosial, dan tata kelola. Oleh karena itu, konsep LST
(Lingkungan, Sosial, dan Tata Kelola) diimplementasikan untuk meraih target tersebut. PT Kereta Api
Indonesia (Persero) saat ini memiliki rencana implementasi LST, yang saat ini juga memiliki tantangan pada
prosesnya. Tujuan dari penelitian ini adalah untuk menganalisis skenario yang mungkin untuk implementasi
LST. Penelitian ini dilakukan dengan menggunakan metode kualitatif, di mana data didapatkan dengan data
primer dan data sekunder. Data yang diperoleh kemudian dianalisis menggunakan beberapa alat analisis, yakni
PESTEL, Porter's Five Forces, dan Resource-Based View. Kemudian, analisis dilanjutkan dengan analisis
perencanaan skenario menggunakan 5 tahapan, terdiri dari 1) orientasi, 2) eksplorasi, 3) pembuatan skenario,
4) pembuatan opsi, dan 5) integrasi. Penelitian yang dilakukan menghasilkan 4 (empat) skenario opsi yaitu, 1)
Kereta Cepat, 2) Kereta Listrik, 3) Kereta Uap, dan 4) Kereta Diesel. Skenario tersebut dibuat dengan
mempertimbangkan ketidakpastian paling kritis yakni peraturan pemerintah dan kebijakan pendanaan. Melalui
empat skenario yang dihasilkan, perusahaan diharapkan dapat menghadapi ketidakpastian di masa depan
dengan baik, sehingga rencana implementasi LST dapat berjalan dengan efektif dan efisien.
Kata Kunci: Perencanaan Skenario, Perencanaan Strategis, LST, Keberlanjutan.

Copyright (c) 2023 Jehan Nurbani, Santi Novani

Corresponding author: Jehan Nurbani
Email Address: jehan_nurbani@sbm-itb.ac.id (Jl. Ganesa No.10, Lb. Coblong, Kota Bandung, Jawa Barat)
Received 10 February 2023, Accepted 16 February 2023, Published 16 February 2023

INTRODUCTION
Introduction contains brief and concise research backgrounds, and objectives. Theoretical
support is included in this section, similar research that has been done can be stated. Business in the
world is mostly focus on economic value where achieving high profit becomes their main goal.
However, beside the economic value there are other values that can be added and makes the business
more valuable, where it is not only advantageous for the business, but also give value to the
9638 Journal on Education, Volume 05, No. 03, Maret-April 2023, hal. 9637-9645

environment, social, and governance. This is line with United Nation (UN)’s agenda for Sustainable
Development in 2030, where all stakeholders in all countries are encouraged to acting in collaborative
partnership in implementing the plan for people, planet, and prosperity (United Nations, 2015).
Indonesian Railway Company namely PT Kereta Api Indonesia (Persero) or PT KAI is one of
a state-owned company in Indonesia that has been running the business in the transportation sector. In
purpose of developing their business, PT KAI is currently also having a plan for ESG implementation.
However, since ESG is still a new concept in Indonesia, it is now become a challenge to the company
in how to implement it. They are now considering the best way in preparing the implementation of
ESG framework, what are the factors that may affect the plan and how to deal with the uncertainties.
To help the company in designing the plan, scenario planning is the suitable tool to help the company
in implementing ESG. By using this tool, the company could analyze the factors that may affect the
process and how to deal with those factors. This will be useful for the company to make a better
preparation for the company to face the unpredictable challenges in the future. Several business issue
that was identified at PT Kereta Api (Persero) in terms of ESG implementation plan are as follows:
1. The urgency of ESG implementation in the company. Amid the UN’s program to support SDG or
the green industry program from Indonesia’s government, ESG concept also arises in the
management to be implemented in the business due to several internal issues within the company.
a. Employee Opportunities is still lacking, such as the job opportunities and training for women
are still limited. (Annual Report of PT Kereta Api Indonesia (Persero), 2021)
b. Corporate Governance is still not well integrated, as in the case of ESG principal is not
comprehensive, both in terms of socialization and directives from the top management.
c. Excessive Waste and Non-Renewable Energy still has large volume. Also, the waste
regarding the use of plastic, waste, and paper. Besides, the operation of PT KAI is still not
acted in the way for renewable energy sources for the environment. (Internal data of PT KAI
(Persero), 2021).
2. Regulation support of ESG in Indonesia. Although UN has encouraged people to support their
agenda for Sustainable Development in 2030 through ESG concept, there is still no official
regulation from Indonesia’s government regarding ESG. Especially, with the low number of
companies that has implement ESG makes the company losing track in creating the ESG
framework. Also, the support from the stakeholders both external and internal will affect the ESG
implementation.
3. Facilities and infrastructure availability. The development of a new business concepts certainly
requires facilities and infrastructures to support the new concept. However, the facilities and
infrastructures available may not be able to meet what is required. Besides, the procurement of
new facilities requires a budget of funds which of course will be taken from limited funds.
Scenario Planning
Scenario Planning for Esg Implementation At PT Kereta Api Indonesia (Persero), Jehan Nurbani, Santi Novani 9639

According to Garvin and Levesque (2006), scenario planning is a process of thinking

imaginatively and creatively in purpose of making a better preparation in the future for an
organization. Scenario planning comes with multiple scenarios that investigates several uncertainties.
Scenario planning has been described as “a Swiss pocket-knife of multiple users, or a magic wand that
is often waved by inexperienced and unskilled consultants and professionals” (Masini and Vasquez on
Crawford and Wright, 2022). The scenario planning process is involving several
elements/components for the analysis, it has different roles which is important. The process of
scenario planning shows in the diagram below.

Figure I. Scenario Planning Component

(Source: Garvin & Levesque, 2006)

1. Key focal issue is a significant issue brought by the organization, that can be an upcoming
decision or a strategic uncertainty of the organization.
2. Driving forces is the factors that are affecting the key focal issue, it can be related to social,
economic, political affair, or technology.
3. Critical uncertainties are the most crucial driving forces that has the most power to change the
key focal issue.
4. Scenario framework is a framework that shows two critical uncertainties and transform it into 2x2
matrix with four quadrants that will shows four different scenarios with different critical
uncertainties condition.
5. Scenarios are different futures from each quadrant in the scenario framework, it is resulted from
different condition of critical uncertainties that has been defined.
6. Narratives is a story that represent each scenario that is logical, coherent, and consistent.
7. Implication is the process of exploring the implication of each narrative of the scenarios to the key
focal issues of the organization.
8. Early warning signals is the indicators that highlight the likely emergence of one scenario.
Schwartz (1996) on Shibasaki, et al (2021) stated that there are five steps that are generally
involved in scenario planning, and according to Garvin & Levesque (2006), scenario planning is
conducted through five stages as follows:
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1. Stage 1, Introduction. The first stage is the process of analysis about the data collected. The goal
from this stage is the statement of key focal issues.
2. Stage 2, Exploration. The process of exploration analysis to identify drivers and key uncertainties
related to key focal issues. The output of this phase is a list of driving forces and the critical
uncertainties that were sorted by the rank.
3. Stage 3, Scenarios Creation. Scenario will be created by putting it into four quadrants from the
highest-two critical uncertainties.
4. Stage 4, Options Consideration. List of strategies and action according to the scenarios created.
5. Stage 5, Integrations. The evaluation stage of the scenario resulted the early warning signals.
External Factors
To analyzes the external environment of the company, the author used the following tools.
1. PESTLE Framework. According to Rothaermel (2019), PESTEL framework is a tool used for
scanning, monitoring, and evaluating the important external factors that the company faced. It is
stand for six factors including Political, Economic, Sociocultural, Technological, Ecological, and
Legal.
2. Porter’s Five Forces. The second framework used is Porter’s Five Forces Model, it is useful not
only to identify the industry’s profit potential, but also to get implications for the company, that
can be its ability to create value for customers (Rothaermel, 2019). The five forces consist of five
factors including threat of new entrants, bargaining power of supplier, bargaining power of
buyers, threat of substitutes, and rivalry among existing competitors.
Internal Factors
To analyzes the internal environment within the company, the process done using resource-
based view. According to Rothaermel (2019) the purpose of resource-based view method is to gain a
deeper understanding on the resources and capabilities in creating core competencies of the company
that leading to competitive advantage. The resources categorized into tangible and intangible
resources.

METHOD
This research methods are conducted using qualitative method. This method was chosen to
gather data related to the business issue exploration, all the data collected through primary and
secondary data. The primary data gathered directly from the company through semi-structured
interview with the stakeholder related. Meanwhile, the secondary data collected from journals, article,
reports, government’s regulation, and other literature that is related to this study.
After all the data needed has been collected, the research continued to the next process to the
internal & external factor analysis. In this process, PESTEL and Porter’s Five Forces factor analysis
used for external factor analysis, meanwhile for internal analysis will be using Resource-based View
method.
Scenario Planning for Esg Implementation At PT Kereta Api Indonesia (Persero), Jehan Nurbani, Santi Novani 9641

The result of the internal and external factor analysis then goes to the main step of the study,
that using Scenario Planning analysis. The output that was resulted from this analysis is the scenario
options that the best scenarios will be chosen to be the implementation plan for the company.

RESULTS AND DISCUSSIONS

To find the business solution in this study, the author used Scenario Planning analysis that is
conducted through five stages as follows.
Stage 1: Orientation
The key focal issue that is identified for this study is “How will the ESG implementation at
PT Kereta Api Indonesia (Persero) affect the business in the next five years?”
Stage 2: Exploration
The purpose of exploration stage is to find the driving forces and critical uncertainties
surround the key focal issue. The driving forces has been identified by the external and internal factor
analysis. Then it was continued by determining the level of impact and the level of uncertainties of
each driving forces. The scoring level used Likert Scale of 5 points. By summing up the scores of all
four respondents, each driving forces could have score of 0 at the minimum and 20 at the maximum
level. This level then divided into 3 categories of level, low is for the total score of <10, medium is for
the total score between 10 to 15, and high is for the total score >15. The result of score levels are
shown on the tables below.
Table 1. Critical Uncertainties
Uncertainties Impacts
Categories Driving Forces
Score Level Score Level
Government’s Regulation 20 High 20 High
Political/Legal
Funding Policy 19 High 20 High
Growth rate 9 Low 15 High
Economy
Exchange Rate 17 High 15 High
People’s lifestyle 15 Medium 14 Medium
Sociocultural
People’s knowledge 10 Low 13 Medium
Technological Infrastructure technology 18 High 8 Low
Geographical condition 7 Low 7 Low
Environmental
Weather 13 Medium 7 Low
(Source: Author’s Analysis, 2023)

The critical uncertainties were chosen by determining the driving forces which have the
highest number in terms of both the level of uncertainties and the level of impact. From the data above,
it can be concluded that the critical uncertainties are government’s regulation and funding policy.
Stage 3: Scenarios and Narratives Creation
Based on the critical uncertainties that are government’s regulation and funding policy, the
author formed the scenario planning matrix to form four quadrants that describe each scenario as
shown on the figure below.
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Figure 2. Scenario Planning Matrix

(Source: Author’s Analysis, 2023)

The narration of each scenario are as follows:

Scenario 1: High-speed Railway. Official regulation regarding ESG was set by the government in line
with the encouragement from the United Nations to achieve the target of Net Zero Emission. The
government stipulates regulations as a reference for the implementation of ESG in a firm. This
regulation then encourages the company to makes a roadmap based on the guidelines from the
government.
Scenario 2: Commuter Line. The government has encouraged the organization to implement the ESG
program to achieve the Net Zero Emission target. However, it wasn’t supported by the related
regulation setting. In the end, the company choose to make the ESG roadmap creatively and
innovatively based on their own research. Besides, the government’s encouragement was supported
by setting the policy in terms of funding. This funding was then used by the company to run the
program.
Scenario 3: Steam Locomotive. Government’s attention to ESG implementation is relatively low and
reflected to the non-availability ESG guidelines for the company. It was very hard for the company to
make a roadmap without a clear guideline, but since it was the program that needs to be implemented,
they still create the roadmap as best as they can. The situation also affects the budgeting policy where
the funding is insufficient. In the end, the program was going very slow and could not go effectively.
Scenario 4: Diesel Locomotive. To support the United Nation’s program, the government releases an
official regulation regarding ESG implementation in Indonesia. This regulation makes it easier for the
company to create a roadmap for the plan. However, the government could not facilitate sufficient
budget for the company that affects the program implementation could not go simultaneously due to
the limited funding. Even so, the program still can be implemented even with delay.
Stage 4: Option Consideration
The list of the implication and the options consideration is shown below.
Scenario Planning for Esg Implementation At PT Kereta Api Indonesia (Persero), Jehan Nurbani, Santi Novani 9643

Table 2. Implications and Options Consideration

Scenarios Implications Options
Implement the ESG program massively in all
Scenario 1: Brand image of the company
aspect
High-speed Railway
Sustainable business Doing the ESG program continuously
Difficulties in finding the Benchmarking with similar company who has
Scenario 2: guidelines implement the program earlier
Commuter Line Use the sufficient budget for supported
Infrastructure development
infrastructure
Scenario 3: Slow process of
Keep doing the work constantly
Steam Locomotive implementation
Clearer guidelines Create a roadmap that follows the regulation
Scenario 4:
Make a program supported by the
Diesel Locomotive Supportive background
government
(Source: Author’s Analysis, 2023)
Stage 5: Integration
To make the company be ready with the new situation that may arise of each scenario, the
author created the early warning signals for each scenario as shown below.

Figure 3.. Early Warning Signals

(Source: Author’s Analysis, 2023)

CONCLUSION
Based on the analysis of this study, there are some conclusions that the author can carried out.
Firstly, there are some driving forces surrounding the implementation of ESG at PT Kereta Api
Indonesia (Persero), it was included to the political, economic, sociocultural, technology, ecology, and
legal factor. It was consisting of government’s regulation, funding policy, growth rate, exchange rate,
people’s lifestyle, people’s knowledge, infrastructure technology, geographical condition, and weather.
Secondly, over all the driving forces identified, there are two critical uncertainties for the company in
implementing ESG. Those are the government’s regulation and the funding policy. Lastly, according
to the scenario planning analysis, the author concludes that there are four possible scenarios in this
study that was considered using the most critical uncertainties. The scenarios are:
9644 Journal on Education, Volume 05, No. 03, Maret-April 2023, hal. 9637-9645

Scenario 1 – High-speed Railway. This scenario defines the situation in which there is a supportive
government’s regulation regarding the ESG in Indonesia and supported by a sufficient funding to
implement it.
Scenario 2 – Commuter Line. This scenario describes the condition of an unsupportive government’s
regulation but still supported by sufficient funding.
Scenario 3 – Steam Locomotive. This scenario defines the situation where both government’s
regulation and the funding policy is unsupportive and insufficient.
Scenario 4 – Diesel Locomotive. This scenario indicates that there is supportive government’s policy
that is not supported with sufficient funding policy.
The suggestion that the author can give for the company regarding the implementation for
ESG at PT Kereta Api Indonesia (Persero) are. First, examining the internal and external environment
regularly to prepare the strategies in dealing with the uncertainties of the future challenge. Second the
company needs to know their current condition by identifying in which position they are right now.
Especially, in identifying the condition of the critical uncertainties. So that, they know which scenario
needs to be taken. Third, checking the early warning signals regularly to prevent unwanted occurrence
and prepare the suitable strategy to be taken. Fourth, doing research and benchmarking with other
company that has implemented ESG earlier. This will make the company be ready with the roadmap,
even if the government release the regulation sooner or later. Fifth, carry out the implementation plan
in accordance with the timeline that has been made.

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