Government and Private Sector Collaboration to Build a Sustainable Economy | Bahasa
Indonesia.23 Mar 2021.3 min read
Bank DBS Indonesia provides insights on green economy and sustainable finance in Indonesia through DBS Asian Insights Conference 2021
Indonesia, 23 Mar 2021 - The Covid-19 pandemic has changed the trend and direction of Indonesia’s economy with the country now focusing more on sustainable finance and a green economy. In view of the trend, Bank DBS Indonesia took 'Reimagining the Future of Indonesia' as the themes of Asian Insights Conference 2021 to discuss the sustainability agenda in a panel discussion entitled 'Collaborative Effort to Drive Sustainability Agenda'. The panel discussion featured Ahmad Rifqi, Senior Executive Analyst, International Department, Financial Services Authority (OJK); Mikkel Larsen, Chief Sustainability Officer at DBS, and Dr. Alin Halimatussadiah, Head of Environmental Economic Research Group at LPEM FEB UI, as speakers.
“Indonesia is undoubtedly an attractive market for investors thanks to its demographics, natural resources, and a huge productive population. Indonesia is also able to benefit from the global economic rebound, especially from the high demand for natural resources,” said President Director, PT Bank DBS Indonesia, Paulus Sutisna. Health expert and a former president of the World Bank, Jim Yong Kim, said that given the current situation, now is the right time to invest, particularly in the health sector, to accelerate economic recovery. "In view of Indonesia’s condition, with the number of Covid-19 cases declining after an increase in January, this is certainly an opportunity for Indonesia to accelerate the vaccination programme to curb the spread of the virus," said Kim.
However, long-term economic planning is crucial in the midst of the vaccination phase. "Even though Indonesia has yet to be able to end reliance on a natural resources-based economy, it would be great if we can start considering, planning, and making the transition to and developing a sustainability agenda for Indonesia's future," said Paulus Sutisna.
Ahmad Rifqi, who represented the government’s view, said that the OJK as regulator fully supports the financial services sector that incorporates environmental, social and governance aspects. However, the process is still far from smooth. Changing the mindset of industry players towards a sustainable economy is not that easy. The biggest challenge in building a sustainable economy is the low awareness of industry players. In addition, there is a lack of clear standards and business opportunities for industry players.
“We have received positive responses, including from international stakeholders. However, we need to conduct evaluation to make improvements. Therefore, we expect the financial sector to adapt to sustainable finance by taking climate change risk into consideration,” Ahmad Rifqi added.
Regarding the implementation of a green economy, in 2014, the government through the OJK issued the Roadmap for Sustainable Financial. The roadmap focuses on a sustainable financial target that Indonesia wanted to achieve in the short, mid, and long-terms through the OJK. The roadmap also serves as a reference for financial institutions to play an active role and make positive contributions to the sustainable development process. The government confirmed its commitment by issuing OJK Regulation (POJK) No. 60/POJK.04/2017 concerning the issuance and terms and conditions of green bonds.
There are at least two roadmaps that are currently being used as guidelines, with the second roadmap launched by the President in early January. The regulators have incorporated several sub-ecosystems into the second roadmap that will be implemented by 2025. “We have prepared regulations on products, market infrastructure, and improved coordination between ministries and institutions. The sectors targeted by the OJK are in the government’s top priority group,” Ahmad Rifqi added.
To underline the OJK’s statement, Alin Halimatussadiah said the pandemic has prompted regulators and industry players to be more active to transition to a sustainable economy. A number of countries such as South Korea and European Union countries have implemented green economies.
“We need to pursue a greener and more sustainable pathway, not just for environmental gains but also for economic gains that will reduce poverty in Indonesia,” said Alin. According to her, a green recovery will bring multiple benefits. Therefore, every player must be able to determine sectors that can be developed and how to do it. This requires more comprehensive studies.
Alin explained that sectors that could be targeted for green recovery include renewable energy, agriculture, forestry and fisheries. These sectors mostly involved the poor. If these sectors are developed, their added value will increase significantly.
Ahmad Rifqi added that the government has developed a green taxonomy as reference and criteria for the financial services sector to support Indonesia’s transition to a green economy. However, Mikkel Larsen, Chief Sustainability Officer at DBS, said that in implementing green taxonomy, every bank must have a system that supports a green economy to ensure its implementation in the long term. "Banks should make careful planning to be able to implement sustainable finance. To that end, it is crucial that each bank has a green financial taxonomic framework and not rush into executing the framework."
As a financial institution that increasingly supports the Indonesian government's agenda in creating a sustainable economy, Bank DBS Indonesia is aware that the climate change crisis will persist if financial institutions do not play a part in solving environmental and social problems. To that end, Bank DBS Indonesia has incorporated the sustainability aspect into its business practices since 2014. Among its efforts is the implementation of a Transitional Taxonomy.
DBS Bank has also introduced a Sustainable Finance Framework and Scheme (Taxonomy) along with its transition framework, which is the world's first sustainable financial framework. The framework serves as a reference to guide corporate customers to adapt to and build resilience in the face of climate change, scarcity of resources, and in overcoming global crisis problems such as social inequalities.
“Currently, DBS Bank is transitioning to become a financial institution that implements sustainable finance. To that end, DBS Bank has implemented a Taxonomy Financial Framework and Scheme across its markets. Through this, DBS Bank has shown support for government agendas, especially the Indonesian government, in reducing greenhouse gas emissions and mitigating climate change," said Mikkel Larsen, Chief Sustainability Officer at DBS.
As a bank that is driven by sustainable goals, Bank DBS Indonesia, through DBS Asian Insights Conference 2021, confirmed its commitment to supporting the government in implementing sustainable finance and a green economy through panelists who are proponents of a green economy.
“Indonesia is undoubtedly an attractive market for investors thanks to its demographics, natural resources, and a huge productive population. Indonesia is also able to benefit from the global economic rebound, especially from the high demand for natural resources,” said President Director, PT Bank DBS Indonesia, Paulus Sutisna. Health expert and a former president of the World Bank, Jim Yong Kim, said that given the current situation, now is the right time to invest, particularly in the health sector, to accelerate economic recovery. "In view of Indonesia’s condition, with the number of Covid-19 cases declining after an increase in January, this is certainly an opportunity for Indonesia to accelerate the vaccination programme to curb the spread of the virus," said Kim.
However, long-term economic planning is crucial in the midst of the vaccination phase. "Even though Indonesia has yet to be able to end reliance on a natural resources-based economy, it would be great if we can start considering, planning, and making the transition to and developing a sustainability agenda for Indonesia's future," said Paulus Sutisna.
Ahmad Rifqi, who represented the government’s view, said that the OJK as regulator fully supports the financial services sector that incorporates environmental, social and governance aspects. However, the process is still far from smooth. Changing the mindset of industry players towards a sustainable economy is not that easy. The biggest challenge in building a sustainable economy is the low awareness of industry players. In addition, there is a lack of clear standards and business opportunities for industry players.
“We have received positive responses, including from international stakeholders. However, we need to conduct evaluation to make improvements. Therefore, we expect the financial sector to adapt to sustainable finance by taking climate change risk into consideration,” Ahmad Rifqi added.
Regarding the implementation of a green economy, in 2014, the government through the OJK issued the Roadmap for Sustainable Financial. The roadmap focuses on a sustainable financial target that Indonesia wanted to achieve in the short, mid, and long-terms through the OJK. The roadmap also serves as a reference for financial institutions to play an active role and make positive contributions to the sustainable development process. The government confirmed its commitment by issuing OJK Regulation (POJK) No. 60/POJK.04/2017 concerning the issuance and terms and conditions of green bonds.
There are at least two roadmaps that are currently being used as guidelines, with the second roadmap launched by the President in early January. The regulators have incorporated several sub-ecosystems into the second roadmap that will be implemented by 2025. “We have prepared regulations on products, market infrastructure, and improved coordination between ministries and institutions. The sectors targeted by the OJK are in the government’s top priority group,” Ahmad Rifqi added.
To underline the OJK’s statement, Alin Halimatussadiah said the pandemic has prompted regulators and industry players to be more active to transition to a sustainable economy. A number of countries such as South Korea and European Union countries have implemented green economies.
“We need to pursue a greener and more sustainable pathway, not just for environmental gains but also for economic gains that will reduce poverty in Indonesia,” said Alin. According to her, a green recovery will bring multiple benefits. Therefore, every player must be able to determine sectors that can be developed and how to do it. This requires more comprehensive studies.
Alin explained that sectors that could be targeted for green recovery include renewable energy, agriculture, forestry and fisheries. These sectors mostly involved the poor. If these sectors are developed, their added value will increase significantly.
Ahmad Rifqi added that the government has developed a green taxonomy as reference and criteria for the financial services sector to support Indonesia’s transition to a green economy. However, Mikkel Larsen, Chief Sustainability Officer at DBS, said that in implementing green taxonomy, every bank must have a system that supports a green economy to ensure its implementation in the long term. "Banks should make careful planning to be able to implement sustainable finance. To that end, it is crucial that each bank has a green financial taxonomic framework and not rush into executing the framework."
As a financial institution that increasingly supports the Indonesian government's agenda in creating a sustainable economy, Bank DBS Indonesia is aware that the climate change crisis will persist if financial institutions do not play a part in solving environmental and social problems. To that end, Bank DBS Indonesia has incorporated the sustainability aspect into its business practices since 2014. Among its efforts is the implementation of a Transitional Taxonomy.
DBS Bank has also introduced a Sustainable Finance Framework and Scheme (Taxonomy) along with its transition framework, which is the world's first sustainable financial framework. The framework serves as a reference to guide corporate customers to adapt to and build resilience in the face of climate change, scarcity of resources, and in overcoming global crisis problems such as social inequalities.
“Currently, DBS Bank is transitioning to become a financial institution that implements sustainable finance. To that end, DBS Bank has implemented a Taxonomy Financial Framework and Scheme across its markets. Through this, DBS Bank has shown support for government agendas, especially the Indonesian government, in reducing greenhouse gas emissions and mitigating climate change," said Mikkel Larsen, Chief Sustainability Officer at DBS.
As a bank that is driven by sustainable goals, Bank DBS Indonesia, through DBS Asian Insights Conference 2021, confirmed its commitment to supporting the government in implementing sustainable finance and a green economy through panelists who are proponents of a green economy.
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