The energy transition requires long-term financing support, so financial industry regulations must evolve to promote financing for green and sustainable sectors. The green taxonomy is one step toward achieving this goal.
The Financial Services Authority (OJK) has issued the Green Taxonomy as a guide for the financial industry to classify green financing. This guide is expected to create transparency and monitor green financing commitments, which can then serve as the basis for determining policies and incentives to accelerate energy transition financing.
In November 2023, OJK opened a public consultation on the revision of the Indonesian Sustainable Taxonomy (TBI). This study highlights the need for a “‘red’ or ‘non-eligible’ classification to avoid greenwashing risks,” stricter criteria for green KBLI classifications, the separation of KBLI categories whose financing should be discontinued, promotion of investment in the recycling sector, and evaluation of value chains across all KBLI to make the energy transition more effective.
The energy transition requires long-term financing support, which means financial industry regulations must evolve to promote investment in green and sustainable sectors. The green taxonomy is one of the key tools to achieve this goal.
The Financial Services Authority (OJK) has issued the Green Taxonomy as a guide for the financial industry to classify green financing. This guide is expected to create transparency and monitor green financing commitments, which can then serve as the basis for policy and incentive decisions to accelerate energy transition funding.
In November 2023, OJK opened a public consultation for the revised Indonesian Sustainable Taxonomy (TBI). The study emphasized the need for a “‘red’ or ‘non-eligible’ classification to avoid greenwashing risks,” stricter criteria for green KBLI classifications, separation of KBLI sectors that should stop receiving financing, promotion of investment in the recycling sector, and evaluation of value chains across all KBLI to ensure a more effective energy transition.