Banks Urged to Stop Financing Coal-Related Businesses

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Laila Afifa

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  • TEMPO.CO, Jakarta - A group called the 'clean Indonesia coalition' on Friday launched a campaign inviting the general public and bank customers to urge banks to stop financing coal-related businesses.

    The coalition's written statement on January 21 read: "We hope the national banking institution can stop financing coal businesses and redirect it to cleaner energy projects."

    A movement has also been launched, represented by the hashtag #BersihkanBankmu (clean up your bank) where people can use it to spread awareness on this issue through social media platforms and a petition established in change.org.

    A study by the Institute for Energy Economics and Financial Analysis (IEEFA) revealed that one hundred financial institutions have policies to get out of funding for the dirty energy sector of coal. Meanwhile, the Urgewald report (2020) states that there are six Indonesian national banks that have financing portfolios to coal companies, both upstream and downstream.

    Andri Prasetiyo, researcher and Program Manager of Trend Asia, assessed that the response of domestic banks was contradictory to the global trend in implementing sustainable financing models. 

    Andri emphasized that the commitment of banking institutions to leave the coal business must be carried out from upstream to downstream. 

    Which would mean that banks will not only stop financing coal-fired power plants but also coal mining companies and the production of coal derivative products such as DME and gasification, which the government is currently pushing.

    Banks need to stop funding entities that still have coal in their portfolio, so it's not necessarily coal companies," he said.

    Read: Indonesia Issues Permit for 96 Cargo Ships to Export Coal

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