Ayomi Amindoni, thejakartapost.com 23 Nov 15;
Indonesia’s largest eight banks by assets have expressed their commitment to support sustainable development in a pilot project of cooperation between the Financial Services Authority (OJK) and World Wildlife Fund (WWF) Indonesia.
The banks involved in the project comprise six conventional banks, namely Bank Mandiri, BRI, BCA, BNI, BJB, and Bank Artha Graha International, and two Islamic banks, Bank Muamalat and BRI Syariah.
OJK head Muliaman D. Hadad said the pilot project was aimed at supporting the OJK’s financial sustainability roadmap for the period of 2014-2019.
He said the project specifically targeted the competence of Indonesian banks in environmental, social and good governance concerns.
"This project is also aimed at increasing the share of the banks’ business financing activities that are conducted in a sustainable manner," said Muliaman at a press conference in Jakarta on Monday.
The OJK chief added it was expected that the major step taken by the eight banks, which represented 46 percent of national banking assets, could encourage other banks and financial institutions to follow suit and start implementing sustainable finance in Indonesia.
"It is expected that more banks will make similar commitments in the near future," he said.
Under the project, the OJK and WWF Indonesia will accompany the eight banks in financing sustainable projects in the palm oil sector. This project will run for 18 months starting in January 2016.
OJK deputy director for the Indonesian banking architecture Edi Setijawan said the palm oil sector was selected for the project since this sector was often associated with environmental destruction.
"The banks involved in the project can take a role in the palm oil industry to improve the profile of this commodity, so it could continue to be the mainstay of the national economy," said Edi.
WWF Indonesia head Efransjah said that with their commitment to implement environment and social sustainability and good governance, the banks could raise their performance in Indonesia.
"In addition to being part of a sustainable banking industry, the banks will also have the power to push their clients to implement environmental, social and good governance principles in their business processes," Efranjah said.
As part of the pilot project, the banks will receive technical assistance, which will include the identification of risks from various sectors and how to develop a framework to mitigate risks. (ebf)(+)
