Bank Ratings Report 2024: Analysis of Bank Policy Progress in Sustainable Financing

Climate change has become a pressing global concern, prompting countries to take concrete steps to reduce carbon emissions and increase the use of renewable energy. Indonesia, as one of the countries affected, also has a responsibility to contribute to this effort. The banking sector plays a key role in supporting the achievement of these targets through sustainable financing that takes into account not only financial aspects, but also environmental, social and governance impacts.

In the past decade, the Indonesian Government has demonstrated a strong commitment to sustainable finance. This is evident from a series of strategic policies issued to encourage environmentally and socially friendly practices. One significant step was the issuance of the Indonesian Sustainable Finance Taxonomy, which serves as an important guideline for financial institutions in identifying and classifying sustainable economic activities. This policy not only supports the achievement of carbon emission reduction targets but also encourages investment in sectors that contribute to sustainable development.

The bank rating report you have in your hands now aims to explore the commitment of the Indonesian banking sector in implementing sustainability principles, including the adoption of Environmental, Social and Governance standards. In addition, we also discuss the progress that has been made in financial inclusion and the challenges that remain, such as gender equality and workers' rights. By understanding these dynamics, it is hoped that effective strategies can be found to strengthen the role of the banking sector in achieving sustainable development goals.

The PRAKARSA as part of the ResponsiBank Indonesia Coalition, we hope that this report can provide in-depth insights and encourage discussion on the steps that need to be taken to increase the contribution of the banking sector in addressing the challenges of climate change and supporting broader financial inclusion in Indonesia.

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