Eight National Banks and WWF-Indonesia Launch the ‘Indonesia Sustainable Finance Initiative’ (ISFI) | WWF Indonesia

Eight National Banks and WWF-Indonesia Launch the ‘Indonesia Sustainable Finance Initiative’ (ISFI)



Posted on 31 May 2018   |  
Jakarta, 31 May 2018 —  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 today. The launch was markedwith a collective signing of the Memorandum of Understanding (MoU) by the eight banks and WWF-Indonesia and witnessed by the Executive Head of Banking Supervision of Commisioner Board of Financial Service Authority (OJK), Heru Kristiyana and  Director General of Climate Change Control of the Ministry of Environment and Forestry, Dr. Ida Bagus Putera Prathama.

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  Mohammad Irfan, Director Risk Management 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 a climate  change  funding  instrument  that  will  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 Initiative,  the  Investment  Coordinating  Board  of  Republic  of  Indonesia,  Ministry  of  Finance, International Finance Corporation (IFC), PT Royal Lestari Utama, PT Sarana Multi Infrastruktur (SMI) and HSBC Indonesia.

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For further information, please contact:
➢    Tria  Mutiari  Meilan  |  Enterprise  Risk  Management  Department,  BRI  |  tria_mutiari@bri.co.id  |
+628988400061
➢    Rizkiasari Yudawinata | Sustainable Finance Program, WWF-Indonesia | rjoedawinata@wwf.id |
+628112344343
➢    Margareth  Meutia  |  Footprint  Campaign  Coordinator,  WWF-Indonesia  |  mmeutia@wwf.id  |
+628158812844

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