TEMPO.CO, Jakarta-The Financial Services Authority (OJK) is working with eight banks in supporting the distribution of green-financing. OJK chief Muliaman Hadad said the banking industry must pay high attention to the environmental aspects of financing.
"Banks must not only think about profits, but also about the people and the planet," he said on Monday, November 24.
"To companies that destroy the environment; do not expect to get bank loans".
Eight banks have committed to follow the regulator's green banking scheme. They are PT Bank Artha Graha International Tbk, PT Bank Central Asia Tbk, PT Bank Negara Indonesia Tbk, PT Bank Rakyat Indonesia Tbk, PT BRI Syariah, PT Bank Mandiri Tbk, PT Bank Muamalat Indonesia, and Regional Development Banks of West Java and Banten.
Bank Mandiri president director Budi Sadikin said that banks that apply eco-friendly principles will receive incentives and additional facilities; such as the ease of access to cheap, long-term funding sources.
"For example, we received funding from the French development bank," Budi said.
Meanwhile, Mr. Hadad said that for 18 months starting from January 2016, the eight banks—accompanied by the OJK and the World Wide Fund for Nature (WWF)—will begin implementing a sustainable financial system, which consists of the development of an integrated framework of environmental, social, and governance aspects.
Not just the banking sector, the capital market industry is also seeing a rapid growth of green bonds, a.k.a. bonds that are issued to finance eco-friendly companies. In 2013, the value of newly issued green bonds stood at US$ 11 billion. By mid-2015, the value had jumped to US$ 65.5 billion.
ADITYA BUDIMAN | INGE KLARA SAFITRI
