Indonesia has committed to achieving net zero emissions by 2060 or sooner as a form of active participation in efforts to prevent global warming, which can lead to climate change on Earth. This effort is accompanied by concrete steps to alleviate poverty and various socio-economic problems included in the framework of Indonesia's Sustainable Development Goals (SDGs).
OJK as the financial sector regulator fully supports the commitment to achieve Net Zero Emission in Indonesia's sustainable development framework. Through the Sustainable Finance Roadmap, which is currently in its second phase (2021-2025), OJK has built a foundation to strengthen the sustainable finance ecosystem such as policy development, products and services, awareness, market infrastructure, human resources, industry support, and increased collaboration with other ministries/agencies. The realization of the roadmap is reflected in various OJK initiatives and policy mixes, including the Indonesia Taxonomy for Sustainable Finance (TKBI).
The TKBI was published by the Chairman of the OJK Board of Commissioners and attended by the President of the Republic of Indonesia during the Annual Meeting of the Financial Services Industry (PTIJK) on February 20, 2024. TKBI 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 in supporting the achievement of Indonesia's NZE targets by 2060 or earlier.
TKBI is developed by emphasizing the principles of scientific and credible, interoperable and supporting 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. The scope of TKBI includes NDC-related sectors (and their amendments). Based on Indonesia's Enhanced NDC 2022, there are five focus sectors namely Energy, Waste, Industry Processes and Product Use (IPPU), Agriculture and Forestry and Other Land Use (FOLU). 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.
Furthermore, to improve the understanding of the Financial Institutions of the TKBI and also to assess the portfolio of Financial Institutions of economic activities in the TKBI, a pilot project for the implementation of the TKBI was carried out in stages, starting with 106 Commercial Banks in Indonesia. The mechanism for implementing the pilot project is carried out in the manner as in the attached file.