Evaluating Water Governance Sustainability Through an Environmental, Social, and Governance (ESG) Lens: A Case Study of Kudus Regency, Central Java, Indonesia

Abstract

Industrial agglomeration and the progressive degradation of the Mount Muria catchment area have placed Kudus Regency, Central Java, at serious risk of a structural hydrological deficit. This study analyzes the sustainability of water resource management in Kudus Regency through the Environmental, Social, and Governance (ESG) framework, addressing a literature gap between studies treating regional water security as either a purely hydro-physical or a purely utility-management problem, rarely as an integrated policy system. Using a descriptive qualitative case study design based on systematic desk review, the study triangulates 2021-2025 secondary data, including Regional Environmental Performance Reports (DIKPLH), river-basin water balance records, national statistics, and regulatory documents, guided by a parameter matrix adapted from the GRI 303 water-and-effluents standard. The analysis shows that the overall water sustainability status of Kudus Regency is Vulnerable and trending toward Critical. Under the Environmental pillar, dependable streamflow declined by 4.2% annually amid upstream deforestation and selective corporate disclosure of groundwater extraction. Under the Social pillar, a pronounced spatial asymmetry was found: 84.2% piped-water coverage in the urban sub-district versus 31.5% in agrarian sub-districts, compounded by a hidden double financial burden from bottled-water substitution. Under the Governance pillar, the recentralization of groundwater permit issuance has paralyzed local enforcement capacity, while conservation spending remains below 0.85% of the regional budget. The study concludes that strong performance in one ESG pillar cannot offset failure in another, and proposes a Mandatory Water Offsetting scheme and an Integrated Groundwater Supervisory Desk as policy instruments to avert a Tragedy of the Commons.