Launches Sustainable Finance Task Force, OJK Wants To Ensure Financial Products Support Environmentally Friendly Projects

Chairman of the OJK Board of Commissioners Wimboh Santoso (Photo: OJK Doc.)

JAKARTA - The Financial Services Authority (OJK) inaugurated the establishment of a Sustainable Finance Task Force as an effort to realize the development of financial products in accordance with environmentally friendly principles.

Chairman of the OJK Board of Commissioners, Wimboh Santoso, said that this effort is also a form of support for climate change mitigation and adaptation (Paris Agreement commitments) as outlined in the Nationally Determined Contribution (NDC).

"OJK, through the Sustainable Finance Roadmap, which has entered its second phase, hopes that the financial services sector will be able to prepare, understand the implications for business as well as domestic and global expectations as well as the policy challenges that must be implemented in the financial services sector," he said in a press statement, Tuesday, 5 October.

According to Wimboh, the implementation of a sustainable financial system must be able to prioritize environmental, social and governance principles that focus on creating a comprehensive ecosystem by involving all relevant parties.

"This can be seen from the process of forming a task force that involves all financial services sectors, including banking, capital markets and the non-bank financial industry (IKNB)," he said.

The task force membership consists of 47 institutions, namely 14 banks, 15 institutions from the capital market, and the rest are IKNB players including BPJS Health and Employment, LPEI, and PT Sarana Multigriya Finansial (SMI).

"The OJK Sustainable Finance task force is also expected to accelerate responses to various developments on this issue at the international level, such as the United Nations Conference on climate change in Glasgow at the end of October," said Wimboh.

On the same occasion, Bank Mandiri President Director Darmawan Junaidi welcomed the OJK initiative in establishing this sustainable finance task force.

"Bank Mandiri is very welcoming of this initiative, because it is also imperative for us to adapt to international best practices," he said.

Similarly, PT SMI's Director of Risk Management Faaris Pranawa said that the formation of the task force was an effort to unify the understanding of sustainable finance.

"We are happy because this can encourage better sustainable financing because it is really needed, so that in the future we have a common language," he said.

The composition of the Sustainable Finance Task Force consists of a Steering Team, consisting of the chairman of the board of commissioners and chief executive of the banking supervisory OJK, capital market and IKNB, president director of financial services institutions (LJK), and president director of the IDX.

Then, the Implementing Team consists of OJK officials from each relevant work unit, OJK technical team, LJK directors, and LJK technical team.

Then, the secretariat task force organized by OJK, under the coordination of the integrated financial services sector policy group (GKKT).

VOI noted that OJK is known to have issued various regulations to support the implementation of sustainable finance which is manifested in the distribution of green portfolios to banks of around Rp. 809.75 trillion.

In addition, the authorities also granted permission for the issuance of PT Sarana Multi Infrastruktur green bonds amounting to Rp500 billion, as well as an increase in the value of the SRI-Kehati index so that currently it has managed funds of Rp2.5 trillion.