Banks are being urged by Deputy Minister BUMN to actively lower their CO2 emissions

JAKARTA - Deputy Minister of State-Owned Enterprises (BUMN) Kartika Wirjoatmodjo urges the National Bank to take an active role in reducing carbon emissions by channeling sustainable funds and referring to the green taxonomy. 

As we know, Indonesia aims to cut emissions by 31.89 percent domestically and 42 percent with international cooperation within the framework of the Nationally Determined Contribution Goals (NDC) of the Paris Agreement.

The Ministry of Finance also said that the country needs financial resources to reduce carbon emissions by 2030, reaching IDR 4,002 billion or the equivalent of around 280 billion USD.   According to Tiko, sharia finance or banking can also be used in this situation as a source of funding to help the government reach its goal of lowering carbon emissions.

Tiko in the 2023 Islamic Business and Sustainable Public Company Forum held by Infobank on Wednesday 27 September 2023 said, "Sharia finance can play a role as a source of financing, both commercially through funding with the government and multilateral banks."

Apart from that, banks must also be able to overcome climate change risks, both financial risks (physical risks) and transition risks, including by conducting assessments and stress testing.   In order to meet the NDC targets, the BUMN Ministry also keeps advancing sustainable economic development through a number of decarbonization programs. For instance, the Minister of StateOwned Enterprises published Regulation No. PER-6/MBU/09/2022 of 2022 regarding the Social and Environmental Responsibility Plans of State-Owned Companies. 

In order to hasten the transition to a low-carbon economy, he said, "This regulation orders BUMN to establish a roadmap to cut greenhouse gas emissions and adopt a carbon economy."

Source : Infobanknews.com