JAKARTA, June 1, 2018 - (ACN Newswire) - Eight national banks in Indonesia with accumulative assets reaching up to 46 per cent of the country's total banking assets, together with WWF-Indonesia, launched the 'Indonesia Sustainable Finance Initiative' (ISFI) in Jakarta. The initiative which brings together Bank Artha Graha Indonesia, BRI Syariah, Bank Central Asia, Bank Mandiri, Bank Muamalat, Bank Negara Indonesia, Bank Pembangunan Daerah Jawa Barat dan Banten, and Bank Rakyat Indonesia as the 'First Movers on Sustainable Banking' aims to promote and implement inclusive sustainable finance practices. The initiative serves as an open platform for banking and non-banking financial industry, corporate issuers and other relevant industry sectors.
The emergence of ISFI began with the success of 'the First Steps to become Sustainable Bank' pilot project initiated by Indonesia's Financial Services Authority (OJK) in 2015 with technical assistances from WWF-Indonesia. From the project the eight 'First Movers' banks acquire assistances related to implementation of environmental and governance risk management. Several concrete outcomes from this pilot project includes policy and Standard Operating Procedure (SOP) improvement in each bank as well as financing quality improvement particularly on business sector with high environmental and social risks.
ISFI is a genuine market-led initiative by the financial services industry that aspires to support the implementation of Sustainable Financial Roadmap and OJK's Regulation (POJK) Number 51 and Number 60 Year 2017 on Sustainable Finance Principles Implementation and Green Bond as the underlying regulation. ISFI is envisaged to function as a mean of experience exchange, learnings among actors of financial services industry and expanding knowledge of sustainable finance principles to financial services industry.
Following the First Movers steps, ISFI aims to strengthen organizational capacity, particularly environmental, social and governance risk management. The initiative is also founded to seize business opportunities within Indonesia's climate resilient economy and contribute directly to the achievement of Sustainable Development Goals (SDGs).
"ISFI is aimed at seizing new business opportunities and driving the implementation of an inclusive sustainable finance aligned with government targets on sustainable development and the Paris Climate Agreement", said Suprajarto, Executive Director of PT BRI Tbk who is currently serving as Chairman of ISFI. "On top of sharing information about ISFI and strengthening ISFI's organization, ISFI's first year program will focus on increasing high quality green portfolio by developing joint pilot projects with members, other strategic partners and regulators", Suprajarto continues.
In a study released by UN Environment and Development Bank Singapore (DBS) on November 2017, green investment opportunities in ASEAN from 2016 to 2030 reach around US$2.3 to 3 trillion with Indonesia as a country with the highest potential to benefit from this green investment. It is identified that Indonesia is likely able to absorb at least 36 percent of total investment potential in infrastructure and renewable energy sectors or around US$8 trillion. Significant factors influencing the increase of green investment opportunities includes incentive-based policies toward private sector to fund SDGs or climate change related projects, technological advancement, and aligning financial product or service development and innovations.
At present, ISFI has already developed a short-term roadmap and in the first year of its establishment, will work toward developing a longer-term roadmap to prioritize strategic programs, expand the initiative, building partnerships and initiate pilot projects on applicable green business model development.
Chairman of WWF-Indonesia Board of Trustee, Kemal Stamboel explains, "Financial service sector holds a key role in enabling its customers to transform toward more sustainable business practices as well as the ability to revive impacted communities welfare through a financial scheme." He further emphasizes that, "The financial service industry needs to set priorities in sectoral policies development to create a significant influence and effectively help achieve the national targets. Aside from that, the development of an innovative new business model needs to be initiated urgently."
Dr. Ida Bagus Putera Prathama, Director General of Climate Change Control of the Ministry of Environment and Forestry commented, "Currently the government is devising dedicated regulations to access climate change funding to increase commercial value of sustainable investment. We sincerely hope that commitments of the finance industry through the Indonesia Sustainable Finance Initiative will serve as a strategic hub to access funding and other incentives scheme."
Establishment of ISFI was made possible with funding support from GIZ and EMSD. The official launch today is followed with a 'CEO Dialogue' session and seminar on sustainable finance to inform leaders and senior staffs of financial service industry about the progress and framework of sustainable finance policy at the global and national level. The sessions will involve strategic personnel and experts on sustainable finance including the Mongolian Sustainable Finance Association, the Investment Coordinating Board of Republic of Indonesia, Ministry of Finance, International Finance Corporation (IFC), PT Sarana Multi Infrastruktur (SMI) and HSBC Indonesia.
For further information, please contact:
Tria Mutiari Meilan | Enterprise Risk Management Department, BRI | [email protected] | +62 8988400061
Rizkiasari Yudawinata | Sustainable Finance Program, WWF-Indonesia | [email protected] | +62 8112344343
Margareth Meutia | Footprint Campaign Coordinator, WWF-Indonesia | [email protected] | +62 8158812844