25/09/2024. PT Bank Negara Indonesia (Persero) Tbk or BNI held the BNI ESG and Sustainability Transition Event or BEST Event with the theme “Energy Sectors Foresight to Encounter the Indonesian Taxonomy of Sustainable Finance (TKBI).” The event, which took place on Tuesday (24/9/2024) in Jakarta, discussed the taxonomy of sustainable finance, the regional development landscape, and the implementation measures in Indonesia.
Resource persons from various institutions, including OJK, the Ministry of Environment and Forestry, the Ministry of Energy and Mineral Resources, and the International Finance Corporation (IFC), provided insights on the challenges and opportunities in the green transition.
BNI Risk Management Director David Pirzada emphasized BNI's commitment to the implementation of Environmental, Social, and Governance (ESG), especially in the implementation of the green transition. “Green transition is a must to achieve a sustainable future,” said David.
BNI has implemented the Climate Risk Stress Test (CRST) in July 2024, as an effort to assess the impact of climate change risks on the bank's portfolio.
CRST covers 50% of BNI's total credit portfolio, including seven industry categories, one of which is the energy sector. This process is the first step in assessing debtor risk from an environmental aspect.
David also explained that this transition requires significant capital and investment support. To that end, BNI launched the Sustainability Linked Loan (SLL), which is aimed at debtors with sustainability targets that are in line with their business strategy.
This program provides incentives in the form of reduced interest if the debtor reaches the agreed sustainability targets. As of June 2024, BNI has distributed SLL of IDR 5.9 trillion to sectors such as poultry, iron manufacturing, cement, and packaging manufacturing.
BNI's achievement in the green loan portfolio also showed positive results, with a growth of 13% YoY during 2023. As of June 2024, BNI's green loan achievement had reached 101% of the 2024 target of IDR 71.27 trillion.
As the challenges of climate change increase, sustainable finance taxonomy becomes a key pillar for directing investments to sustainable projects.
"Financial taxonomy will be important in determining the direction of investment and financing in the future," said David.
OJK has also developed the Indonesian Sustainable Finance Taxonomy (TKBI) as a development of the Indonesian Green Taxonomy, referring to the ASEAN Taxonomy version 2.
BNI also welcomes the implementation of TKBI, which is expected to provide clear direction in classifying business actors and encourage the transition towards green.
"We hope that TKBI can be a driver for business actors to transform towards a green economy," said David.
On the occasion of this BEST Event, BNI invited energy sector debtors to understand more deeply the role of taxonomy in implementing sustainable business towards a green economy.
BNI emphasized the importance of collaboration between the government, financial services sector, and the business world to optimize the implementation of TKBI in order to achieve the Government's Nationally Determined Contributions (NDC) targets.
"With this step, BNI hopes to realize a shared commitment to creating a more sustainable economy," concluded David. (*)