Climate Risk Mitigation Policy Dialogue in the Financial Sector 

The PRAKARSA - The financial sector must have a sustainable climate risk mitigation policy that takes into account environmental, economic, social and governance aspects.

Response Bank Indonesia with PT Surveyors Indonesia and Forest and Finance Coalition holding policy dialogues to encourage financial sector policies to mitigate risks related to nature and climate and improve the quality of Natural Resources (SDA) governance. Located at the Surveyor Indonesia building, on Thursday (24/11/2022).

This activity was attended by guest speakers from the institution think tanks Network for Greening Financial System (NGFS) 'INSPIRE', London School of Economics (LSE), and participants from ministries, government agencies, academia, financial sector actors, and civil society.

Lussy Ariani Seba Director of Human Resources PT Surveyors Indonesia conveyed that Indonesia's economy is growing rapidly, but is quite vulnerable to physical and transitional risks posed by climate change.

For this reason, according to Lussy, it is important to reduce these risks early so that they can bring long-term social, economic and environmental benefits. "Shock to climate and natural resources can become a systemic risk to banking and financial stability, so it needs to be addressed by financial sector regulators and the Central Bank. In fact, some of the policy proposals or ideas have also been submitted by the NGFS and we hope that through this policy discussion the systemic risk will be later can also find a solution," he said.

In line with that, Elena Almeida, Policy Analyst from NGFS INSPIRE LSE conveys loss of biodiversity is increasingly being recognized as a factor to be considered by central banks and financial supervisors.

Apart from that, Elena also said that central banks and financial supervisors in several countries had already taken action against the Republic of Indonesiaefinancial risks related to biodiversity. "Currently there is a new agenda regarding actions and steps to be taken, and this needs to be accelerated with COP15 (Convention on Biological Diversity) which will be held soon," said Elena.

On the same occasion, the Executive Director The PRAKARSA as well as coordinator Response Bank Indonesia Ah Maftuchan convey, this activity is directed as a multi-party forum. According to him, there needs to be a consolidation that is measurable and directed so that the ideas and various things that have been done can be realized.

"So apart from the multi-stakeholder approach, we hope that the exchange between parties between actors can produce a multidimensional approach, meaning that when we talk about the environment, we cannot leave out the economic, social and governance aspects," said Maftuchan.

He further stated that what is still a challenge and needs to be continuously encouraged is related to the political approach. "In order for leadership to shifting from the economy dark We can accelerate towards a greener economy quickly," concluded Maftuchan.

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