Commitment To Build Sustainable Business, Bank Mandiri Targets IDR 5 Trillion From Green Bond Issuance

JAKARTA - The application of Environmental, Social, and Governance (ESG) principles continues to be accelerated by Bank Mandiri to achieve sustainable business growth. This is a form of Bank Mandiri's commitment to support the achievement of Sustainable Development Goals (SDGs) and the target of Enhanced Nationally Determined Contribution (ENDC) towards Net Zero Emission (NZE) initiated by the Government of Indonesia.

The company's commitment was realized again in real terms through the issuance of the 2023 Bank Mandiri Phase I Sustainable Public Offering (PUB) with an indicative target of IDR 5 trillion.

This Green Bond issuance is part of Bank Mandiri's PUB Green Bond with a total of IDR 10 trillion which will be used to finance or refinance activities that are included in the category of Environmentally Introspective Business Activities (KUBL) as regulated in POJK No.60/POJK.04/2017 concerning Issuance and Requirements for Environmentally Involved Effects (Green Bond).

President Director of Bank Mandiri, Darmawan Junaidi, said that the issuance of these bonds is one of the strategic initiatives to strengthen the funding structure in supporting business expansion plans in the framework of implementing Bank Mandiri's Sustainable Banking Sustainable Plan for Sustainable Banking.

"The issuance of Green Bond is one of the initiatives that reinforces Bank Mandiri's consistency in the application of Sustainable Finance through the development of Sustainable Financial Products and Services as well as increasing the portfolio of Green Financing. This is also our commitment in supporting the achievement of Indonesia's Net Zero Emission (NZE) target in 2060," Darmawan said in Jakarta, Tuesday, May 23.

Darmawan added that the funds raised from the issuance of Green Bond will be used to support financing environmentally friendly business activities. This is one of the efforts to accelerate the increase in the exposure of the bank codenamed BMRI to the green sector.

To support this corporate action, Darmawan continued, the Company has appointed six emission guarantor companies, namely Bahana Sekuritas, BNI Sekuritas, BRI Danareksa Sekuritas, CIMB Niaga Sekuritas, Mandiri Sekuritas, and Trimegah Sekuritas Indonesia.

"Bank Mandiri in recent years has consistently applied the ESG principles seriously, both in terms of fund raising, disbursement of funds, and operations. We have also set a target of achieving net zero emissions from the company's operational activities by 2030," added Darmawan.

In terms of raising funds, the issuance of Green Bond is known to be not the first time Bank Mandiri has raised ESG-based funds. Previously, Bank Mandiri had raised ESG-based funds worth 800 million US dollars through Sustainability Bond worth 300 million US dollars in 2021 and ESG Repo worth 500 million US dollars in 2022.

Bank Mandiri's commitment to implementing ESG principles also continues to be shown in terms of banking intermediation. As of March 2023, Bank Mandiri has channeled financing to ESG-based sectors of up to IDR 232 trillion, or grew 11 percent year on year. Equivalent to 25 percent of the company's total bank-only portfolio, the financing is channeled, among others, to the MSME sector, sustainable agriculture, renewable energy, and clean transportation.

Bank Mandiri also continues to develop sustainability-based financing products such as Sustainable Linked Loan and Green Loan. This shows that Bank Mandiri is also committed to pushing its customers to apply sustainable principles and support customers' business transitions to more sustainable businesses.

One of the initiatives that Bank Mandiri has implemented in terms of operational activities is the use of solar panels in several Bank Mandiri offices in big cities throughout Indonesia. In addition, Bank Mandiri also continues to strive to meet the concept of green building or environmentally friendly buildings in the principle of building office buildings.

Furthermore, Bank Mandiri has collaborated with environmentally friendly vehicle manufacturers to gradually start integrating the use of electric vehicles in meeting the company's operational needs.

It does not stop there, Bank Mandiri as a state-owned company, together with other state-owned banks, has collaborated with GESITS and Volta in supporting the government's incentive program in purchasing two-wheeled electric motorized vehicles. This commitment of the independent Bank is also in line with the Regulation of the Minister of Industry No. 6 of 2023.

"Bank Mandiri has consistently continued its commitment to become Indonesia's Sustainability Champion for Better Future. One of the strategic steps to this is to develop financing in line with POJK 51/2017, NDC and NZE Indonesia roadmaps, as well as the ESG framework which refers to best practices," concluded Darmawan.