GreenBankingLegislation,StandardsandImplementation

EdiSetijawan

RegionalSeminaronInnovativeClimateFinanceInstrumentsforFinancialInstitutions

19-20June2017,UNCC,Bangkok,Thailand

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SustainableFinancePolicyFramework

SUSTAINABLEDEVELOPMENTGOALS &

CLIMATECHANGE

LawNo.32of2009concerningConservationandManagement

oftheEnvironment

Indonesiancommitmentforclimatechange

NationalActionPlanfortheReductionofGreenhouse Gas

Emission (RAN– GRK)1. SectorsContribution towards

theTargetedGHGemissionsreduction

2. FinancingneedsforGHGemissionsreduction

LongTermNationalDevelopmentPlan(RPJPM)

1. GreenEconomy2. PriorityEconomic

Sectors3. Financingneedsfor

economicdevelopment

Complianceenvironmental

economicinstruments

Competitiveness

Fulfillment forSustainableFinancingNeeds

Resilience

RoadMap

ReadinessofFinancialServicesIndustry

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Definition&Rationalization

GreenEconomy SustainableFinance

INDONESIA

Green Economy is an economic developmentmodel based on ecological economic andgreen economic which aims to answer theinterdependence between human economiesand ecosystems. Green Economy also aims toanswer the negative impact of economicactivities on climate change and globalwarming.

Sustainable finance in Indonesia is defined ascomprehensive support from the financialservice industry to achieve sustainabledevelopment resulted from a harmoniousrelationship between economic, social andenvironmental interests*

* Indonesia Sustainable Finance Roadmap 2015-2024

OJK’s policy on sustainable finance bringfinancial institution to the next level, becomesmore responsible and contributive to economicdevelopment with longterm vision.

Definition Definition

Rationalization

ObjectiveoftheDevelopmentOf TheRoadmapOnSustainableFinance

Objective of the RoadmapThis roadmap sets forth the detailed work plan on the sustainable finance program (2015-2024) forthe financial service industry as governed under the authority of OJK, namely the Banking, capitalmarket and Non Bank Financial Service Industry (IKNB) sectors. This roadmap on sustainable financeas part of theMaster Plan for Indonesia’s Financial Service Sector (MPSJKI) 2015-2019.

Specify the measures and recommendations that need to be adopted in the form of an integratedwork plan involving all financial service institutions. This work plan may be revised and adjustedperiodically as deemed necessary.

Sustainable finance comprised of the following dimensions:1. Achieveindustry, socialandeconomicsuperiority inorder toaddressthethreatsofglobalwarmingand

mitigateotherenvironmentalandsocialissues;2. Aimstoencouragetheshiftingof thetargettowardsacompetitivelowcarboneconomy;3. Strategicallypromoting environmentally friendly investmentinvariousbusiness/economicsectors;and4. Supporting theprinciplesofdevelopment inIndonesiaasstatedintheRPJM,namelythe4P(pro-growth,

pro-jobs,pro-poor, andpro-environment).

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Increasesupplyofsustainablefinancingtostrengthen

competitivenessofnationalfinancialserviceindustry

Increaseoversightandcoordinationofsustainablefinance

implementation

Increasedemandofenvironmentallyfriendlyfinancing

products

Throughthestrengtheningofriskmanagement,corporategovernanceinenvironmentalandsocialaspects,aswellastheaccelerationoftheimplementationoftheEnvironmentalLaw

Throughpublicawarenessandeducationongreeninvestmentandgreenfinancing

ThroughprovisionofincentivestoFSItoincreasegreenproductsportfolio,encourageinnovation,increasecompetency,informationsharingandincreaseaccesstoglobalpublicfund

Strategic GoalsandActivitiestoImplementSustainableFinance

StrategicGoals StrategicActivities

SUSTAINABLEFINANCEROADMAPACHIEVEMENTS2015-2016

1. GreenLendingModels(renewableenergy,energyefficiency,greenbuildingprojects,andorganicagriculture),ESGguidelinesforselectedindustry(palmoil),understandingenvironmentalimpactassessmentdocumentforFinancialInstitutions.

2. RaisingawarenessPrograms:Seminars,FocusGroupDiscussions,SBN4thannualmeeting.

3. Capacitybuildingprograms:TrainingEnvironmentalandSocialRisksforFinancialInstitution andFissupervisors(basicandintermediatelevel,ToT).(2015-2016about600officers);handoverTrainingModuleonSustainableFinancetosomeuniversitiesandtraininginstitutions.

4. ProvidinganintegratedinformationinSustainableFinanceInformationHub(web-based)

5. Policycoordinationwithgovernments,Internationalagencies,NGOs,andotherstakeholders.

6. IndustryparticipationsthroughaPilotProject“IndonesiaFirstMoversonSustainableBanking”.Itsfollowedby8banks(stateownedbank,regionalbank,privateownedbankandIslamicbank)

7. JointresearchprogramonSustainableFinancewithsomeuniversitiesandinternationalorganizations(projectbasedfinancingforgreeninfrastructure,greenbond)

8. DraftofOJKRegulationonSustainableFinance9. InternationalFora:G-20GFSG,SBN,ASEANSustainableCapitalMarket.

SUSTAINABLEFINANCEROADMAPPROGRAMS2017-2019

1. OJKRegulationofSustainableFinance,GreenCreditGuidelines,GreenBondGuidelines, GreenInsuranceGuidelines,SustainabilityReport.

2. Capacitybuildingprograms:TrainingEnvironmentalandSocialRisksforFinancial InstitutionandFissupervisors(basicandintermediatelevel,ToT),BaliSustainableFinanceCenter.

3. Policycoordinationwithgovernments,Internationalagencies,NGOs,andotherstakeholders.

4. IndustryparticipationsthroughaPilotProject“IndonesiaSecondMoversonSustainableFinance”.ItswillfollowedbybankandnonbankFIs.

5. JointresearchprogramonSustainableFinancewithsomeuniversitiesandinternationalorganizations(projectbasedfinancingforgreeninfrastructure,greenbond,greeninsurance,etc)

6. InternationalFora:G-20GFSG,SBN,ASEANSustainableCapitalMarket,ASEANForumonSF

7. Baseline Surveyimplementation ofSustainableFinanceRoadmap

STOCK-TAKING– SBN-IFCPRESENTEDININPUTPAPERTOG20GREENFINANCESTUDYGROUP(GFSG)INJUNE,2016

8• BasedonIFC/SBNInputPapertoG20GreenFinanceStudyGroup

description Bangladesh Brazil China Colombia Indonesia Kenya Mexico Mongolia Nigeria Peru Turkey Vietnam

Environmental X X X X X X X X X X X XSocial X X X X X X X X X X X XRiskManagement X X X X X X X X X X X XLoanOrgination X X X X X X X X X X XPolicy-Led(Regulatoryguideline) X X X X X

Industri-led(Policyandindustry-led X X X X X X

Blended(PolicyandIndustry-led) X X

ScopeBanking X X X X X X X X X X X XExpandingtowiderfinancialsector X X X X

Awarenessraising/consultation X X X X X X X X X X X X

Nationalsustainabledevelopmentroadmap X X X X X X X X X X X X

Sector-specificguidelinesorchecklists X X X X X X X X X

Inter-agencycollaboration X X X X X X X X X XCapacitybuildingofregulator X X X X X X X X XCapacitybuildingofFis X X X X X X X X X X X XDisclosurerequirementforFis X X X X X X X X X X X XSupervisonby regulator X X X X X X XMonitoring&evaluation X X X X X X X X XMarketincentiveongreenlending X X X X X

Award X X X

ThankYou

disclaimer:thispresentationisnotanofficialpresentation,forseminarpurposeonly.

Furtherinformationemailtoe_setijawan@ojk.go.id