Green-Based Investment Interests Continue To Increase, Stock Exchanges Ready To Facitize Investors' Will

Illustration. (Photo: Doc. Antara)

JAKARTA - Director of Corporate Assessment of the Indonesia Stock Exchange (IDX) I Gede Nyoman Yetna said the trend of investment in the capital market was colored by the growing attention of the perpetrators regarding the application of environmental, social and governance (ESG) aspects.

"First, the increase in domestic assets under management or AUM is certainly growing significantly. The number of ESG products in 2016 is only one product with an AUM of IDR 42 billion. In 2022, the product will increase to 18 with an AUM of almost IDR 2.1 trillion. Or, we will see an increase in product from the product side to 18 times with an increase in AUM of almost 52 times," said Nyoman in the virtual seminar Capital Market Summit & Expo (CSME) 2022 quoted by Antara, Thursday, October 13.

Meanwhile, the trend globally, continued Nyoman, based on data from the Principles for Responsible Investment (PRI), there has also been an increase related to ESG-based investment management. In 2016, the AUM managed by global funds of around 62 trillion US dollars increased almost double to 121 trillion US dollars in 2021.

"The bond volume data labeled Green, Social, and Sustainability or GSS reached US$417.8 billion in mid-2022 and showed a significant increase in subsequent periods," Nyoman said.

According to Nyoman, there has been a relatively significant phenomenon of shifting investor interest in being able to invest in green-project-based products to convince investors regarding the sustainability of planet Earth.

"We SRO and OJK continue to strive to implement sustainable financial initiatives to be able to attend and play a role in bridging funding needs that support ESG principles, of course with investment instruments with ESG themed. In the end, we can contribute optimally to maintaining the sustainability of this planet in the future," he said.

Nyoman added that a number of initiatives in the capital market that have been implemented by the stock exchange include collaborating with institutions related to the ESG and also educating stakeholders in the capital market through ESG-topic seminars such as sustainable reports, climate change, and carbon trading.

The exchange provides infrastructure that can make it easier for stakeholders, especially companies, to be recorded in submitting sustainable reports by providing ESG websites and infrastructure to showcase or a kind of showcase for issuers who have implemented ESG aspects or called ESG Star Listed Companies.

"With this showcase, we hope that it can be a benchmark for business people, especially listed companies, to be able to see and then compare the implementation of ESG in companies that we think can be used as a reference," said Nyoman.

The next exchange initiative is to issue products that support ESG principles such as IDX ESG Leaders, ESG Sector Leaders IDX KEHATI Index, and ESG Quality 45 IDX KEHATI.

"We in the capital market also provide incentives for the issuance of green bonds. The goal is that we want to show our gesture that we are a promote of ESG products," said Nyoman.