
The PRAKARSA (Institute for Policy Research and Advocacy) – The Ministry of Finance (MoF) in 2021 noted that the 2030 climate target requires an investment of USD 285 billion, while the government budget is only able to cover 34%, leaving a budget gap of USD 145 billion. Based on the Climate Policy Initiative (CPI) 2023 report, the financial sector contributes 15% of climate investment needs, with public and private financial institutions each allocating around USD 3,5 billion and USD 3,4 billion, which is only equivalent to 3% of the total investment required.
Financial institutions are expected to act as catalysts in promoting sustainable development and addressing climate challenges by providing financing that supports environmental protection and social welfare. If climate risks are ignored and adaptation is not carried out, financial institutions will face higher credit risks, including Physical Risk and Transition Risk, which can lead to potential stranded assets.
In terms of policy, Indonesia has actually taken steps to regulate sustainable finance through a series of regulations, including POJK 51/2017 which regulates the implementation of sustainable finance for financial institutions, issuers, and companies. The Financial Services Authority (OJK) has also released the POJK 51 Technical Guidelines which define 12 categories of Sustainable Business Activities (KUBL), as well as POJK 60/2017 which regulates the issuance and requirements of environmentally friendly securities. In addition, the Phase I (2015–2019) and Phase II (2021–2025) Roadmaps demonstrate Indonesia's long-term commitment to sustainable finance.
The ResponsiBank Indonesia Coalition, which is part of the Fair Finance International (FFI) and Fair Finance Asia networks, has again released the results of its latest research on sustainable financing policies implemented by banks in Indonesia. Taking place at the Ashley Hotel Tanah Abang, Jakarta, on Wednesday (22/1/2025).
This research assessed 12 banks including BRI, Mandiri, BNI, Bank Permata, and BSI for Himbara Banks. While from non-Himbara, including HSBC, DBS, CIMB Niaga, OCBC, BCA, Maybank, and Bank Danamon. Using the Fair Finance Green Index (FFGI) methodology, this research assessed the level of bank compliance with sustainability standards covering 15 themes including forestry, climate change, power generation, nature, mining, oil and gas, financial inclusion, consumer protection, human rights, workers' rights, gender equality, health, corruption, transparency and accountability, and taxation.
In the presentation of the research results, researchers from The PRAKARSA Ricko Nurmansyah revealed that the average score of bank policies in Indonesia is in a diverse position. "Several themes experienced an increase in scores such as forestry, climate change, nature, financial inclusion, consumer protection, human rights, gender equality, corruption. Themes that did not experience an increase in scores include power plants, health, and taxation. While several other themes actually experienced a decrease in scores such as mining, oil and gas, workers' rights, and transparency and accountability," he explained.
Judging from these conditions, the general assessment results place HSBC, DBS, and CIMB Niaga as the banks in the top positions. "In addition, there are also three banks that experienced a decline in ranking, namely BCA, BRI, and Danamon. While the other seven banks did not experience a change in position compared to the previous year," explained Ricko.
Ricko further explained that although the average score on certain themes has decreased, if you look deeper, several banks have actually increased their commitment, such as on the mining theme. Several banks on the mining theme, including Maybank, HSBC, CIMB Niaga, DBS, and OCBC, have increased their scores because they have implemented a policy of not financing companies involved in the development of new thermal coal mines.
"Maybank Indonesia, for example, has also included asbestos mining in the exclusion list, affirming its commitment to more sustainable and environmentally friendly practices," said Ricko.
In addition, Maybank, HSBC, and CIMB Niaga refuse to finance mining using the Mountain Top Removal (MTR) method. Only CIMB Niaga, DBS, and HSBC arrange for their clients to mitigate the risk of work accidents through the best techniques and measurable work plans.
“HSBC and DBS are also committed to encouraging clients to reduce extractive waste and manage and process it responsibly, reflecting their dedication to sustainability,” added Ricko.



In the final session, Ricko presented several recommendations that had been prepared based on the research results, including that banks are expected to establish financing policies that support a just energy transition and circular economy, as well as setting measurable targets and metrics for reducing emissions.
"There also needs to be stricter policies in high-risk business sectors and systematic operational mechanisms to integrate gender perspectives and social aspects in credit and investment processes," he explained.
Ricko also emphasized the importance of meaningful participation of local communities, indigenous peoples, civil society organizations, industry, and international organizations in the development of policies as well as training and education programs for the banking sector on sustainable finance principles.
"In addition, it is necessary to establish the mandatory implementation of the Sustainable Finance Taxonomy (TKBI) to accelerate the mobilization of financing that supports handling the climate crisis. The classification of 'red' business sectors that do not support the green economy also needs to be introduced to provide early information/early warnings of sectors that are at risk in environmental and social aspects," he explained.
On the other hand, a science-based approach to taxonomy development should be prioritized, along with stick and carrot mechanisms for banks committed to sustainable financing and financial inclusion. Finally, it is important to create guidelines that ensure financial institutions implement independent audit mechanisms, to ensure that financed products and projects comply with strictly defined sustainability criteria.