Lukmanul Khakim: Green Financing Must Maintain Integrity, Not Just a Label

JAKARTA - The trend of green financing in the national banking industry continues to show significant growth. Until the first half of 2026, Indonesia's major banks recorded a green financing portfolio worth hundreds of trillions of rupiah, marking the increasingly strong commitment of the financial sector to sustainable development.

However, behind this growth, Independent Commissioner of PT Bank Rakyat Indonesia (Persero) Tbk and candidate for a Doctor of Perbanas Institute, Lukmanul Khakim, reminded that the amount of green financing must be accompanied by integrity in its implementation.

According to Cak Lukman - his nickname, sustainable financial success is not enough to be measured by the size of the funds disbursed, but also by the environmental impact that is actually produced.

"The greater the value of green financing, the greater the responsibility to ensure that the 'green' label really reflects real quality. Do not let green financing reports be tainted by allegations of greenwashing or environmentally friendly imagery that is not in line with actual business practices," said Cak Lukman, in Jakarta, Wednesday, July 29.

According to him, the financial statements of the banking industry in the first half of 2026 showed positive developments.

National banks are increasingly aggressive in expanding sustainable financing as part of their business strategies, rather than merely meeting regulatory requirements.

Data shows that Bank Mandiri has disbursed green financing of IDR 173 trillion, BCA IDR 123 trillion, BNI IDR 78 trillion, while BRI has recorded sustainable financing of IDR 815.4 trillion, including green loans of IDR 96.6 trillion and financing for People's Business Loans (KUR) for more than 77 thousand units of houses.

Cak Lukman assessed that this development was a positive signal because green financing was able to bring together economic interests and environmental preservation.

Through this scheme, the business sector obtains access to funding, while environmentally friendly projects have the opportunity to develop more broadly.

In addition, the increase in green financing is also considered to strengthen Indonesia's appeal in the eyes of global investors who are now increasingly making Environmental, Social, and Governance (ESG) principles as one of the main considerations in investment decisions.

He quoted data from the Global Sustainable Investment Alliance (GSIA) which showed global assets in sustainable mutual funds and Exchange Traded Funds (ETF) reached around 3.9 trillion US dollars by the end of 2025 or jumped more than 600 percent in the last eight years.

Meanwhile, in the United States, the Investment Company Institute (ICI) recorded that ESG-based mutual fund and ETF assets had reached US$674.4 billion in May 2026, with net fund flows again recording positive growth.

"Sustainability has now become the main parameter in assessing the risk, competitiveness, and long-term prospects of an investment. Therefore, the development of green financing in Indonesia is a great opportunity to be more connected with global investment flows," he said.

Although optimistic about the development of green financing, Lukmanul reminded that the banking industry needs to be aware of greenwashing practices, namely the image as if a project is environmentally friendly even though it does not have a real impact on sustainability.

According to him, this phenomenon is a serious concern in various countries because it has the potential to erode investor confidence in green financial instruments.

"Green financing must be able to prove real environmental benefits. When claims of sustainability are not supported by verifiable evidence, investor confidence will weaken and the effectiveness of green financial instruments will be questioned," he said.

He added that the main challenge of the banking industry today is no longer merely increasing the nominal green financing, but ensuring that every project financed meets clear and accountable sustainability standards.

"Every rupiah that is disbursed must be able to trace its impact. Every project must meet clear standards. Every claim of sustainability must be testable, not just trusted," said Cak Lukman.

Cak Lukman explained that a number of countries have tightened sustainable financial governance. The European Union, for example, has implemented the EU Taxonomy and Sustainable Finance Disclosure Regulation (SFDR) which requires detailed disclosure of sustainability information.

Likewise, the United Kingdom, Singapore, and Australia have strengthened anti-greenwashing regulations to ensure that every environmental claim can be accounted for.

Indonesia itself has the Indonesian Green Taxonomy and a number of regulations from the Financial Services Authority (OJK).

However, its implementation still faces various challenges, ranging from limited green projects that are worth funding, not yet reaching the capacity of credit analysts in measuring environmental risks, to the limitations of MSMEs in accessing sustainable financing.

On the other hand, the need for fossil energy financing is still relatively large so that the transition to clean energy requires stronger policy and financing support.

Referring to the government's projections, the green small and micro (IKM) industry has the potential to create economic value of up to IDR 2,390 trillion by 2030. This potential, according to Lukmanul, can only be realized if the green financing ecosystem is built holistically.

He encouraged the development of a blended finance scheme, simplification of the green assessment process for MSMEs through digitization, improvement of credit analysts' competence in environmental risk aspects, the use of artificial intelligence (AI) to monitor the use of funds, and independent verification of projects that obtain green labels.

"In an era when trust is the most expensive asset, the banking industry is not enough to finance the green economy. Banking must also ensure that the meaning of 'green' itself does not lose its value. Because when sustainability is only a slogan, Indonesia will lose the opportunity to build a more resilient, fairer, and more sustainable economic future," concluded Cak Lukman.