Ketum Kadin Arsjad Rasjid: Indonesia Becomes An Impact Investment Destination In The Area

Chairman of the Indonesian Chamber of Commerce and Industry (Kadin) Arsjad Rasjid stated that Indonesia is not only following global trends related to investment development that have an impact investing, but is also the most active investment destination in the region.

"Indonesia not only follows this (impact investment) trend, but also becomes the most active market in the region," said Arsjad Rasjid at the opening of the 2024 Impact Investment Day (IID) in Labuan Bajo, East Nusa Tenggara (NTT), quoted from Antara, Sunday, September 8.

Through a video statement, he said that in recent years, investment has had an impact on starting to gain momentum in Indonesia because investors are starting to be more aware of the principles of environmental, social, and corporate governance (ENVIRONMENT, social, and governance/ESG).

According to him, investment has had a significant growth over the last few years due to the need to tackle crucial global issues, such as poverty, inequality, and climate change.

He said that based on Global Impact Investing Network (GIIN) data, the number of assets managed with investment principles had an impact worldwide reaching more than US$1.1 trillion (Rp16,927.9 trillion).

Meanwhile, according to the Australian Agency for International Development (AusAID) there were around 131 draft laws (RUU) formed in Indonesia during 2020-2022 which attracted an investment value of almost 1.5 billion US dollars (Rp 23.08 trillion, exchange rate per Friday (6/9) = Rp15,389).

"The trend is clear, more investors are starting to adjust their portfolio to solve global issues," said Arsjad.

This trend, he continued, encourages changes in the paradigm, where social and environmental impacts are now starting to be considered in addition to financial gain.

Now investors are also prioritizing long-term investments that encourage a low-carbon future and sustainable development.

However, he stated that the investment value was still not enough to handle the increasing social gap in Indonesia.

"This challenge is too big to be resolved only by individuals, companies, CSR contributions (corporate social responsibility or social and environmental responsibility/TJSL), as well as non-governmental organizations (NGO)," said Arsjad.

To overcome these challenges, he said that investment realization needs to be improved through formalization of social entrepreneurship.

This, according to him, is because social entrepreneurship encourages innovative solutions to deal with poverty and inequality in society, and not only focuses on creating business profits.

He also said that now many social entrepreneurships are helping and becoming government partners in development.

"Kadin, as a government partner, actively supports the formation of the Social Entrepreneurship Bill which aims to create a framework that provides opportunities for these business actors to attract more impactful investments," added Arsjad.

Impact Investment Day (IID) 2024 is a side event from the Indonesia International Sustainability Forum (ISF) 2024 which was held by the Indonesian Chamber of Commerce and Industry in collaboration with the Bambu Lingkungan Lestari Foundation (YBLL) in Labuan Bajo, NTT, 7-8 September 2024.

The event provided opportunities for selected social entrepreneurs, namely BambooCoop, EcoNusa Foundation, Jaga Semesta, Javara, Krealogi, Spedagi, Tiga Pilar Pertiwi, TORAJAMELO, Blue School, Kalara Borneo, Riles Lestary, Tenun. In, and Timor Moringa, to conduct pitching and matching funds sessions with a number of investors, including the Temasek Foundation.