Indonesiainside.id, Jakarta – The report from the German-based urgewald agency showed that as many as six Indonesian national banks were recorded as still providing loans to coal companies listed on the 2020 Global Coal Exit List (GCEL), during the period October 2018 to October 2020.
Association Executive Director Prakarsa The Bank's Response Coordinator, AH Maftuchan, said that the total loans were worth US$6,29 billion or Rp.89 trillion and underwriting or underwriting of US$2,64 billion or Rp.16,6 trillion.
In fact, with the trend of sustainable finance (sustainability finance), financial institutions are expected to start shifting their funding to more sustainable industries. Coal is one of the energies that produces emissions and many global investors have begun to state that they will no longer finance coal either upstream or in coal-fired power plants.
This is because of its destructive power to the environment and produces Greenhouse Gas (GHG) emissions that cause an increase in the earth's temperature and cause climate change. According to Maftuchan, the six national banks provide funding to coal mining companies and the State Electricity Company (PLN), which also use coal as electricity fuel.
Meanwhile, the Financial Services Authority (OJK) currently has issued The roadmap Phase II of sustainable finance, which can be a reference for financial institutions to switch to a more sustainable business by implementing environmental, social and governance aspects.
OJK develops a sustainable finance ecosystem which includes policies, products, market infrastructure, coordination of Ministries/Agencies, non-government support, human resources, and awareness.
“The established ecosystem is expected to provide incentives for financial institutions to start investing in sustainable finance. Banks and guarantee institutions need to start thinking about reducing financing to the coal industry in order to protect the earth for future generations," said Maftuchan, in a press statement received by Indonesiainside.id, Sunday (28/2).
Dwi Sawung, Campaign Coordinator of WALHI, said that the coal sector is still a source of income for the Indonesian financial industry, even though it was the largest non-performing loan a few years ago. The Indonesian financial industry still does not pay attention to environmental sustainability, especially the sectors that cause climate change, even though the impact of climate change will affect consumers from the banking industry itself. The Indonesian financial industry also does not yet have a roadmap of when to end their investment in the coal dirty energy industry.
Aryanto Nugroho, National Coordinator of Publish What You Pay (PWYP) Indonesia said the implementation of the sustainable finance roadmap must be technically clear and it is important to involve a number of parties who still have an interest in fossil energy such as the Ministry of Energy and Mineral Resources, the National Energy Council and related institutions.
"The goal is that the transition to the implementation of financial institution financing, for example, fossil energy to more sustainable energy such as renewable energy, can be carried out in a comprehensive and integrated manner. If we only rely on the OJK roadmap, it will be difficult to achieve,” he said.
Sumber: IndonesiaInside.id
