On May 30, 2017, Dutch consultancy firm Aidenvironment released a report on the role of Nordic asset management companies that own shares in banks headquartered in Indonesia and Singapore (http://bit.ly/2rfi24N) According to Aidenvironment's report, these Nordic asset managers own US$2 billion in shares in six banks that lend to palm oil companies in Indonesia. The banks mentioned in the report include Bank Mandiri, BRI, BNI, BCA, OCBC and DBS.

Nordic asset managers investing in the six banks include the Norwegian Government Pension Fund Global (GPFG) with an investment of US$1.3 billion, Nordea with a total investment of US$0.3 billion and other asset management companies including AP-Fonderna with US$163 million, Swedbank with US$140 million and Handelsbanken with US$58 million. Some of these shareholdings fall under the category of ethical funds issued by asset management companies.

WWF welcomes the launch of the report which emphasizes the important role of international investors in encouraging the acceleration of the transformation of the implementation of sustainable principles throughout the supply chain of the palm oil industry sector, including influencing banks - where they invest - to encourage the performance of the companies they finance.

WWF recognizes that the level of sustainability of the palm oil sector still varies, some are already producing in a sustainable way. But there are still practices that are not yet fully responsible.

For this reason, companies that fall into the category mentioned at the end, need to improve their practices and commit to implementing sustainable practices as a whole including minimizing deforestation, use and exploitation of peat areas. This concrete commitment can be realized by obtaining ISPO legality certification and obtaining credible sustainable certification such as RSPO in full with a time bound commitment. This needs to be followed by banks to ask their clients to commit through their financing policies.

Currently, WWF-Indonesia and the Financial Services Authority (OJK) are working with eight banks through the "First Movers on Sustainable Banking" pilot project, in which the four Indonesian banks mentioned in the publication have made initial commitments to begin the sustainability phase of their journey. One of the objectives of the pilot project is to enhance the capacity of Indonesian banks on environmental, social and governance (ESG) integration, and to encourage banks' role in addressing issues in the palm oil sector through its risk control framework.

WWF sees some good progress related to the development of sustainable banking in Indonesia in recent years, especially the sustainable finance policy put forward by regulators. Some banks have started to have sustainable palm oil sector financing policies (although not always publicized). However, there are still many efforts that need to be made by banks to improve sustainable banking practices, including in relation to addressing ESG issues in the palm oil sector. WWF-Indonesia together with OJK has developed a responsible financing guide for investment in the palm oil sector that can be used by banks as a practical guideline in providing financing for the palm oil industry in Indonesia. (End).
For more information, please contact:

• Rizkiasari Yudawinata, Private Sector Policy and Responsible Investment, WWF-Indonesia

Email: Rjoedawinata@wwf.id and HP: +628112344343

About WWF-Indonesia
WWF-Indonesia is an independent national conservation organization and part of the WWF global network. Starting work in Indonesia in 1962 with the Javan rhino study in Ujung Kulon, WWF-Indonesia is currently active in 28 fieldwork areas in 17 provinces ranging from Aceh to Papua. Supported by around 500 staff, WWF-Indonesia works with the government, local communities, the private sector, NGOs, civil society and the public at large. From 2006 to 2013, WWF-Indonesia was supported by around 64,000 supporters in the country. Visit www.wwf.id.