ESG Global Vision

Environmental policy

Planned

Countrywide

This law is intended to help Indonesia meet its obligations under the Paris Agreement.

This law will regulate the carbon trade, provide payments to businesses based on performance in reducing greenhouse gas emissions, and impose a levy on carbon emissions.

Environmental policy

Planned

Countrywide – goods and services

This tax would be imposed on entities or individuals purchasing goods/services containing/resulting in carbon/carbon emissions.

The five main sectors will be energy and transportation, agriculture, forestry and peat lands, industry, and waste treatment. There is no current timescale for its implementation.

Non-financial reports

Voluntary standards

All companies

These guidelines detail how companies should monitor and report the effectiveness of the mitigation and adaptation actions that they undertake in their ongoing business  controlling their emissions and contributions towards climate change.

The mitigation actions must be carried out by way of measurement, reporting and a verification process. Businesses will be responsible for measuring their climate change effects and for  obtaining their baseline emissions level and for subsequent emission reductions. The report must be verified by the government, and implemented accordingly. In addition, the implementation of such plans must be reported in writing in the company’s annual report. 

Non-financial reports

Voluntary standards

All companies

The Environmental Law, as amended, provides the foundational laws to be applied to every company  to protect the environment, including but not limited to:

1. Environmental sustainability.
2. Prohibition against pollution of the environment.
3. Prohibition on disposal of toxic waste into the environment.
4. Prohibition on land clearing by burning.

Non-financial reports

Voluntary standards

Mining companies

Mining companies must apply proper mining principles concerning technology, safety, the environment, land reclamation and post-mining activities (mine closure). They must also submit periodic reports on the above activities and obligations.  

Non-financial reports

Voluntary standards

Mining companies

The decree requires that each province in Indonesia, especially those with mining businesses in the relevant provincial administrative jurisdiction, draws up blueprint guidelines for community development and empowerment to decrease poverty and increase the income of communities around mining regions.

Financial reporting

Voluntary standards

All companies

PR 98/2021 is an overarching regulation for controlling climate change and reducing greenhouse gas emissions through (i) mitigation and adaptation actions and (ii) carbon pricing and carbon trading arrangements. The details regarding the implementation need to be supplemented by future regulations, which are currently being reviewed by the relevant working committee.

PR/98/2021 provides that:

1. companies must take certain mitigation and adaptation actions in their ongoing businesses including but not limited to solid and liquid waste management and carbon efficiency of power generation and transportation;
2. companies must comply with limits for greenhouse gas emissions set by relevant ministries in future regulations;
3. the government can implement schemes relating to the money value of carbon through carbon trading, economic incentives and carbon levies; and

4. the government must establish a National Registration System for Climate Change Control to support carbon trading

Non-financial reporting

Voluntary standards

All companies engaged in business related to natural resources.

This law regulates how these companies are required to fund social and environmental initiatives.

Specifically, Chapter V of Article 74 of this law requires companies engaged in business related to natural resources to allocate funding for social and environmental purposes for the benefit of the company itself, the local community and society in general. The details of such funding and implemented measures must be disclosed in a company’s annual report.

Non-financial reporting

Voluntary standards

Financial services companies.

The road map is intended to create sustainable finance for all financial services players under the Financial Services Authority or Otoritas Jasa Keuangan, "OJK", to include banks, capital market players and financial institutions.

To achieve the above purposes, the OJK will prepare, amongst others:

1. Regulations/policies to increase the sustainable financial services portfolio by providing incentives to productive and consumptive sectors, e.g., green taxonomy
2. Development of an integrated information system on sustainable finance.
3. Sustainability reports becoming mandatory for transparency purposes and awards.
4. Green lending model on supporting national energy resilience plan.