PT Bank Negara Indonesia (Persero) Tbk or BNI is strengthening its commitment to encourage green transition through funding and support for debtors, in line with Indonesia's target towards Net Zero Emission (NZE).
This was emphasized at the 29th Conference of the Parties to the UN Framework Convention on Climate Change (COP29) in Baku, Azerbaijan. BNI took part in a talk show session at the Indonesia Pavilion with the theme “Catalyzing Industries' Green Transition: Banking Financing Strategies in Advancing Indonesia's NZE Commitment”.
In the discussion that took place on November 11, 2024, BNI Risk Management Director David Pirzada highlighted the strategic role of banking in supporting the green transition in Indonesia.
“As climate change issues increase every year, synergy between stakeholders such as government, businesses, academics, communities, and financial institutions is needed to achieve sustainability in Indonesia,” David explained.
David also outlined a number of challenges that Indonesian companies still face in implementing sustainable practices, such as budget constraints, lack of Environmental, Social, and Governance (ESG) experts, and the need for increased commitment from management and regulatory support.
“In an effort to overcome these obstacles, BNI acts as a strategic partner that provides mentoring services and financing through the Sustainability Linked Loans (SLL) program,” he said.
David mentioned that until September 2024, BNI had channeled IDR 5.5 trillion in SLL to various sectors, including agrifood, manufactures of cement and steel, and packaging. These funds aim to help companies improve their sustainability performance.
"We have successfully encouraged several debtors to improve their ESG Sustainalytics scores, from severe risk to high risk, and reduce the impact of carbon emissions," added David.
One of BNI's initiatives in assisting debtors is to organize the BNI ESG Sustainability & Transition (BEST) program in September 2024. Through this program, BNI invited 25 energy companies to discuss the Indonesian Sustainable Finance Taxonomy (TKBI) in collaboration with the Ministry of Environment and Forestry (KLHK), Ministry of Energy and Mineral Resources, Financial Services Authority (OJK), and the International Finance Corporation (IFC).
BNI was also recorded as the first bank in Indonesia to issue green bonds in rupiah denominations worth IDR 5 trillion in 2022. These bonds have contributed significantly to reducing carbon emissions by 1.4 million tons of CO2eq, as well as supporting the recycling of 1.6 million tons of waste and protecting more than 300 thousand hectares of land and planting more than 28,000 trees.
"This achievement is the result of distributing funds to the renewable energy sector, environmentally friendly transportation, green buildings, waste management, and sustainable natural resource management," said David.
In addition to the corporate sector, BNI also reaches out to Micro, Small and Medium Enterprises (MSMEs) in implementing environmentally friendly practices, such as waste management and the use of environmentally friendly raw materials.
"Our commitment is very strong to continue to grow together with debtors in creating a sustainable future. We aim to ensure that Indonesia can become a prominent role in global sustainability efforts, towards Indonesia Emas 2045," concluded David.
BNI's active participation in COP29 is strong evidence of the bank's strategic role in supporting the green transition and NZE Indonesia's ambitions, while also emphasizing BNI's sustainability commitment which is integrated into every business line and debtor partnership.