Sustainable Banking in Indonesia
In cooperation with WWF Indonesia and OJK, Indonesia’s financial regulator, GIZ’s Emerging Markets Dialogue on Finance (EMDF) implements a pilot project on Sustainable Banking in Indonesia. The project aims at the promotion of sustainable finance practice, mainly via training and capacity building in environmental, social and governance (ESG) risk management procedures, in the Indonesian banking sector.
The financial sector is a key actor for sustainable development. Financial institutions lend money to multiple industries in various countries and sectors. Once banks’ lending follows stringent ESG criteria, the leverage effect for positive impact can be tremendous. This logic is extendable to other capital markets instruments beyond classic loans.
The Sustainable Banking in Indonesia project is an implementation project of the country’s Financial Service Authority (FSA)’s Sustainable Finance Roadmap. The Roadmap was launched in conjunction with the Ministry of Environment and Forestry, and functions as the key guidance document for the finance industry and other parties involved in supporting sustainable development.The project structure includes the following activities/elements:
- Engagement of leading decision makers of the participating financial institutions representing over 50% of the national banking capital assets
- Building of the necessary capacities on ESG risk management practices via workshops and technical assistance
- Creation of a regular roundtable of first movers on sustainable banking
While the pilot project focuses on commodities industries, it may be adapted to other sectors later on.
So far, the following workshops, supported by EMDF, have taken place with participation of eight first mover banks:
- Workshop: Environmental, Social & Governance Integration for Banks - First Steps to be a Sustainable Bank (22 Feb 2017, Jakarta). The workshop covers the ESG risk assessment.
- Workshop: Papua Responsible Investment & Sustainable Banking Pilot Project Socialization (12 Apr 2017, Papua)
- Workshop: Environmental, Social & Governance Integration for Banks - First Steps to be a Sustainable Bank (3 May 2017, Jakarta). The workshop incorporates ESG conditions into Loan Agreements, dealing with non-compliance and ongoing monitoring of ESG policy. Photo gallery
- Workshop: Environmental, Social & Governance Integration for Banks – Pilot Project Training & Technical Facilitation (Ongoing). Training on First Steps to ESG Integration and Palm Oil Masterclass – technical in-house workshops with all eight banks.
- Closing Ceremony for First Movers: Environmental, Social & Governance integration for banks - Closing ceremony of First Movers on Sustainable Banking Pilot Project (12 Jul 2017, Bali).
- Side Meeting to Closing Ceremony: Environmental, Social & Governance integration for banks - Concrete action and next action plan (12 Jul 2017, Bali). Programme Agenda
To create a level playing field for sustainable banking in Indonesia, from August 2017 onwards the pilot project will be extended to second mover banks.
For further information on the project, please contact firstname.lastname@example.org.