Jakarta, May 31, 2018 - Eight national banks representing 46% of Indonesia's banking assets announced the formation of the Indonesia Sustainable Finance Initiative (IKBI). The launch of IKBI was marked by the signing of a Memorandum of Understanding for the Establishment of IKBI by the eight banks and WWF-Indonesia witnessed by the Chief Executive of Banking Supervision, Board of Commissioners of the Financial Services Authority (OJK), Heru Kristiyana and Director General of Climate Change Control of the Ministry of Environment and Forestry, Dr. Ida Bagus Putera Prathama.

The eight banks, namely, Bank Artha Graha Indonesia, BRI Syariah, Bank Central Asia, Bank Mandiri, Bank Muamalat, Bank Negara Indonesia, Regional Development Bank of West Java and Banten, and Bank Rakyat Indonesia are members of the 'First Movers on Sustainable Banking' group. The establishment of IKBI is a tangible manifestation of the commitment of Indonesian banks in implementing sustainable financial practices that are inclusive in the financial services sector. This platform is open to the bank and non-bank financial services industry, issuers, and other relevant industry sectors.

The birth of IKBI is inseparable from the success of the pioneering project 'First Steps to become Sustainable Bank' initiated by the Financial Services Authority of the Republic of Indonesia (OJK) in 2015 and received technical guidance from WWF-Indonesia. Under the project, the eight 'First Movers' banks received guidance on the implementation of environmental risk management and governance. Some of the outputs of this pilot project include improvements in policies and Standard Operating Procedures (SOPs) at each bank as well as improvements in the quality of financing, especially in business sectors that have high environmental and social risks.

IKBI is a real market-based initiative of the Financial Services Industry (FSI) which is expected to support the implementation of the sustainable finance roadmap and its implementation rules, namely OJK Regulations No.51 and No.60 of 2017 concerning the Application of Sustainable Finance Principles and Green Bond. IKBI is expected to function as a means of exchanging experiences, learning between IJK actors as well as expanding information and the application of sustainable finance principles to IJK.

In line with First Movers, IKBI aims to strengthen institutions, particularly in the areas of environmental, social and governance risk management. This initiative is also built to contribute as well as capture business opportunities towards efforts to develop an Indonesian economy that has resilience to climate change and contributes directly to efforts to achieve the Sustainable Development Goals (SDGs).

"IKBI is oriented to capture new business opportunities and encourage the implementation of inclusive sustainable finance, in line with the government's target of realizing sustainable development and achieving the commitments of the Paris Climate Agreement," explained Mohammad Irfan, Director of Risk Management of PT BRI Tbk, who acts as the current Chair of IKBI. "In addition to socialization and institutional strengthening, the IKBI program in the first year will be oriented towards increasing quality green portfolios with a focus on developing inaugural projects with members, other strategic partners and regulators", he continued.< br />

Based on study data reported by UNEP and the Development Bank of Singapore (DBS) in November 2017, green investment opportunities in ASEAN in the period 2016 - 2030 reached around US$2.3 - 3 trillion. Indonesia is the country with the highest potential to capture the green investment. According to the identification, at least 36% of the total potential investment in infrastructure and renewable energy sector of US$8 trillion can be absorbed by Indonesia. Important things that affect the increase in green investment opportunities are the issuance of various policies that provide incentives for the private sector to provide funding for SDGs and climate change projects, technological advances and the development / innovation of appropriate financial services products / services.

In the initial stage, IKBI has developed a short-term roadmap. Over the next one year, IKBI will actively develop a long-term roadmap with its members to put forward strategic programs, conduct socialization and build partnerships and initiate pilot projects in developing applicable green business models.

Chairman of the WWF-Indonesia Board, Kemal Stamboel stated, "The financial services sector not only plays a key role in encouraging its customers to implement sustainable practice transformation, they are also able to revive the welfare of affected communities from a financing". He emphasized, "In order to effectively achieve the government's targets, the financial services industry needs to set priorities in developing a sectoral policy that has the effect of encouraging the sustainability performance of its customers. In addition, the development of innovative and collaborative new business models needs to be the urgency of the IKBI program."

"Currently the Indonesian government is preparing a climate change funding instrument that can increase the commercial value of sustainable investment. It is hoped that the commitments outlined in this initiative can become a strategic platform related to providing access to funding and various other forms of incentives," said Dr. Ida Bagus Putera Prathama, Director General of Climate Change Control, Ministry of Environment and Forestry.

The establishment of IKBI was also supported by funding from GIZ and EMSD. The launch of the initiative was followed by a 'CEO Dialogue' session and a sustainable finance seminar aimed at familiarizing leaders and senior staff from IJK with the progress and policy framework for sustainable finance at both the global and national levels.

The various strategic resource persons and sustainable finance experts involved include the Mongolian Sustainable Finance Initiative, the Investment Coordinating Board (BKPM), the Ministry of Finance, the International Finance Corporation (IFC), PT Royal Lestari Utama, PT Sarana Multi Infrastruktur (SMI) and HSBC Indonesia.

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For more information, please contact:

Tria Mutiari Meilan | Enterprise Risk Management Department, BRI | tria_mutiari@bri.co.id |

+628988400061

➢ Rizkiasari Yudawinata | Sustainable Finance Program, WWF-Indonesia | rjoedawinata@wwf.id |

+628112344343

➢ Margareth Meutia | Footprint Campaign Coordinator, WWF-Indonesia | mmeutia@wwf.id |

+628158812844