The Financial Services Authority (OJK) has launched the Climate Risk and Banking Resilience Assessment (CBRA) as part of its efforts to strengthen the resilience of Indonesia’s banking sector against climate-related risks. The initiative also supports the enhancement of risk-based supervision while promoting the development of sustainable finance in Indonesia.

CBRA is designed to assess the potential impact of climate risks on the banking sector over the short, medium, and long term. Using a forward-looking quantitative approach, the assessment analyzes potential impacts on asset quality, profitability, and the capital position of the banking industry. The results indicate that, on an aggregate basis, Indonesia’s banking sector has sufficient capital capacity to withstand climate-related pressures under a well-managed transition scenario.

Going forward, OJK will continue to strengthen the supervisory framework for climate-related risks, including through the development of Climate Risk Management and Scenario Analysis (CRMS) and enhanced transparency of exposure data to carbon-intensive sectors, in support of Indonesia’s Net Zero Emissions target by 2060.

Further information on the Climate Risk and Banking Resilience Assessment (CBRA) can be accessed through the following link.