Other stakeholders have also taken part in the agenda. Last year, it appointed eight banks to start channeling loans based on the principle of sustainable financing. 60/POJK.04/2017 which set out the standard for green bonds issuance in the country. Three years later, it issued the OJK Regulation (POJK) No. In December 2014, the OJK published a Roadmap for Sustainable Financing in Indonesia, which lays out much of the agenda’s development framework.

Sustainable financing has been pursued for years. The pursuit of sustainable financing to date Sustainable financing largely refers to any form of financial service that takes into account the ESG criteria to achieve the broader goal of sustainable development.Īccording to the Financial Services Authority (OJK) Roadmap for Sustainable Finance in Indonesia 2015-2019, sustainable financing includes efforts in the financial services industry to mitigate the impact of climate change, to shift toward a competitive low-carbon economy, to promote environmentally friendly investments, as well as to support the 4P development principles as outlined in the National Medium-Term Development Plan (RPJM), which consist of pro-growth, pro-jobs, pro-poor and pro-environment. While the country is still laying down the building blocks, it is important to see what sustainable financing has to offer so that investors will not miss out on its potential benefits while issuers can plan ahead to cater to the growing market. To that end, economists have raised concerns about whether there is an appetite for sustainable investment products in the market. However, as the country has gradually progressed to establishing a sustainable financial system, there has been an ongoing debate whether financing green projects or investing in companies that uphold the environmental, social and governance (ESG) criteria will bring good returns. There have been numerous notable milestones over the years, as this report will explore. Building sustainable financing is not a new idea within the country’s financial system.

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