Commitment to Implement Sustainable Finance, BRI's Sustainable Credit Grows Double Digits to Rp710.9 Trillion

Jakarta, Tangerangtalk.Online - The implementation of sustainable finance continues to be a major concern for all sectors, including the financial industry. This is done in response to environmental issues as the biggest global challenge in the future.

One of the institutions committed to implementing sustainable finance is PT Bank Rakyat Indonesia (Persero) Tbk or BRI, which consistently supports the government's green economy program. Environmental issues have been identified as one of the top ten global risks in the next 10 years. In this regard, the Indonesian government is committed to reducing greenhouse gas emissions by approximately 32% by 2030.

Ahmad Solichin Lutfiyanto, Director of Compliance at BRI, stated that BRI, along with all stakeholders, is striving to achieve this target. "The government cannot do it alone but must collaborate with all stakeholders. This means that when we talk about green economy as part of sustainable finance, there must be contributions from the government, the real sector, the financial sector, and equally important, contributions from the general public," he said during the Green Economy Forum on Tuesday (June 6, 2023) in Jakarta.

As for BRI itself, the largest bank in Indonesia, it recorded a growth of 11.1% in sustainable credit disbursement on a year-on-year (yoy) basis. The figure increased to Rp710.9 trillion at the end of the first quarter of 2023, compared to Rp639.9 trillion in the first quarter of 2022. With this performance, BRI is optimistic about becoming a market leader in ESG implementation.

These sustainable credits are disbursed in various sectors, including the MSME segment, renewable energy, and environmentally friendly transportation. The MSME segment contributes the largest share, accounting for 88.7% of the portfolio of BRI's Sustainable Business Activity Criteria (KKUB) Credit, equivalent to Rp630.7 trillion.

Promoting Green Economy

Solichin, who is also a board member in the Legal and ESG department of the National Banks Association (Perbanas), explained that the green economy in Indonesia needs to be continuously promoted. He revealed that the sustainable finance portfolios of the four largest banks in Indonesia reached approximately Rp1,290 trillion. Of this amount, new green projects accounted for Rp326 trillion, while the remainder focused on social aspects.

Therefore, in terms of a more specific perspective on the green economy within sustainable finance, he emphasized looking at both assets and liabilities. Assets refer to loan portfolios that depend on demand, while liabilities involve regulations from the Financial Services Authority (OJK). One example of a ready regulation is green bonds.

From a banking perspective, there is a hope for incentives to issue green bonds. When banks issue green bonds, the proceeds will be used to finance green projects or promote the green economy.

"Now, green projects naturally desire special interest. If we want to expedite the financing of green projects with greater potential in the future, let us all support it as stakeholders, so that when banks issue green bonds, they receive special interest and do not have to pay a premium as they do now," he concluded.