Based on the mandate of Law of the Republic of Indonesia Number 21 of 2011 concerning the Financial Services Authority, OJK was established with the aim that all activities in the financial services sector are organized in an orderly, fair, transparent and accountable manner; able to realize a financial system that grows sustainably and stably; and able to protect the interests of consumers and the public. As one of the realizations of these objectives, OJK establishes a sustainable finance policy by balancing economic, environmental and social aspects. This is supported by the issuance of the Law of the Republic of Indonesia Number 4 of 2023 concerning Development and Strengthening of the Financial Sector, which contains a special chapter on the implementation of sustainable finance, expands the definition of sustainable finance to also include financing for the transition to sustainable economic growth, and regulates sustainable taxonomy. This law further strengthens the important role of the financial sector in sustainable economic growth including efforts to address climate change.

In response to the dynamics and development of national and international sustainable finance as well as answering various challenges in handling and financing climate change, implementing the transition to net zero emission (NZE) and efforts to achieve the Sustainable Development Goals (SDGs), OJK issued the Taxonomy for Indonesian Sustainable Finance (TKBI), which is a transformation of the Indonesian Green Taxonomy Edition 1.0. TKBI is a classification of economic activities that support efforts and SDGs covering economic, environmental and social aspects, and is used as a guide to improve capital allocation and sustainable financing to support the achievement of Indonesia's NZE targets by 2060 or earlier.

TKBI is developed by emphasizing the principles of scientific and credible, interoperable and supportive of national interests, and inclusive. The TKBI framework, elements, and criteria refer to the ASEAN Taxonomy for Sustainable Finance and national policies as the main references, by adopting four environmental objectives, namely EO1-Climate Change Mitigation, EO2-Climate Change Adaptation, EO3-Protection of Healthy Ecosystems and Biodiversity and EO4-Resource Resilience and the Transition to a Circular Economy; and three essential criteria (EC), namely EC1-Do No Significant Harm, EC2-Remedial Measure to Transition, and EC3-Social Aspect. There are two approaches in activity assessment, namely Technical Screening Cirteria (TSC) for the corporate/non-MSME segment and Sector Agnostic Decision Tree (SDT) for the MSME segment. The final result of the TKBI assessment process is that the activity is classified as "Green" or "Transition". If it does not meet both classifications, the activity is assessed as "Does Not Meet Classification".

The scope of TKBI includes NDC related sectors (and their changes). Based on Indonesia's Enhanced NDC in 2022, there are five sector focuses, namely Energy, Waste, Industry Processes and Product Use (IPPU), Agriculture and Forestry and Other Land Use (FOLU). In order to be in line with national and regional policy developments, the preparation of TKBI is carried out in stages starting in 2024 with the first sector focus on the energy sector, then continued with other NDC related sectors in subsequent years. 

In the future, in line with the nature of a living document, TKBI will be reviewed periodically in order to maintain its currentness in line with developments in science, technology and sustainable finance policies at the national and global levels.
 

Please download the attached materials.

1. TKBI 2024 (Indonesian Version).pdf

2. TKBI 2024 (English Version).pdf

3. PPT TKBI_Slide Deck 1.pdf

4. TKBI Annex_Slides Deck 2.pdf

5. FAQ TKBI.pdf