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Indonesia Financial Services Authority (OJK) released Banking Sustainability Maturity Assessment Report (SMART), supporting sustainable finances practices and improving the national banking sector's preparedness in integrating Environmental, Social, and Governance (ESG) to its business strategies and models.

The report maps the maturity level of sustainability principles practices in Indonesia banking industry, including governance, strategy, risk management, sustainable financing, disclosure, and internal capacity development. Through structured and indicator-based approaches, the report comprehensively illustrates the industry's current position and identifies the areas that require further optimization to support data and evidence-based policy.

The assessment shows that the banking industry has generally presented advancement and development in sustainability commitment and governance, including establishing special units, integrating ESG in the internal policies, and increasing report quality. However, optimization is still required, especially in climate risk and sustainability risk integration in the core risk management, portfolio impact measurement, and business strategy and transition target alignment toward the 2060 Net Zero Emissions. 

This report also advocates for and aligns with OJK's sustainability policy direction, including determining the disclosure policy direction determination as well as promoting financing for the transition process. In the future, OJK will continue to promote sustainability implementation quality improvement through regulation strengthening, risk-based supervision, industry capacity enhancement, and provision of technical guideline that adapts to the global dynamics and national necessities. The banks are expected to not only comply with the regulation, but also internalizing sustainability as a long-term strategy, cultivating competitiveness, stability, and contribution to an inclusive and low-carbon economic development.

For more information, please contact:

Mr. Nuki Suprayitno (nuki.suprayitno@ojk.go.id)
Ms. Silvia Adhiarahmawati (silvia.adhia@ojk.go.id)

Download the attached file to read the Climate Risk and Banking Resilience Assessment.