Climate change has become a pressing global concern, prompting various countries to take concrete steps to reduce carbon emissions and increase the use of renewable energy. Indonesia, as one of the affected countries, also has a responsibility to contribute to this effort. The banking sector plays a key role in supporting the achievement of these targets through sustainable financing that considers not only financial aspects but also environmental, social, and governance impacts.

Over the past decade, the Indonesian government has demonstrated a strong commitment to sustainable finance. This is evident in a series of strategic policies issued to encourage environmentally and socially friendly practices. One significant step was the publication of the Indonesian Sustainable Finance Taxonomy, which serves as a key guideline for financial institutions in identifying and classifying sustainable economic activities. This policy not only supports the achievement of carbon emission reduction targets but also encourages investment in sectors that contribute to sustainable development.

The bank rating report you are currently holding aims to explore the Indonesian banking sector’s commitment to implementing sustainability principles, including the adoption of Environmental, Social, and Governance standards. We also discuss the progress achieved in financial inclusion and the challenges still faced, such as gender equality and workers’ rights. Understanding these dynamics will hopefully lead to effective strategies to strengthen the banking sector’s role in achieving sustainable development goals.

The PRAKARSA as part of the ResponsiBank Indonesia Coalition hopes that this report can provide in-depth insights and encourage discussions on steps that need to be taken to increase the contribution of the banking sector in addressing the challenges of climate change and supporting broader financial inclusion in Indonesia.

Read the policy assessment here.

View the policy assessment scores here.