source: www.mirifica.

net

www.idx.co.id Indonesia Stock Exchange @indonesiastockexchange @IDX_BEI Indonesia Stock Exchange

Strengthening ESG Implementation in

Indonesia Capital Market
3
 source: www.mirifica.net

Sustainable Finance and ESG in

Indonesia Capital Market
4
Sustainable Finance at International and National Levels
Relationships and Key Principles

International
Norms
To limit global warming to well below 2, Jun 2011: The global standard for preventing and To achieve sustainable goals for
preferably to 1.5 degrees Celsius addressing the risk of adverse impacts on economy, social, and environment
human rights linked to business activity 2030

Translating
international
norms for a framework used by financial Sustainable Finance for resilience
institutions to determine, assess and economies and environmental
business manage environmental and social risk protection
To promote sustainable investment that
incorporates social, environment,
in projects. economic, and governance
consideration

Indonesia
National Indonesia
National Action Plan
framework & National Action Plan
on the SDGs –
initiative in on the GHG reduction Sustainable Finance Panduan Investasi Lestari/
private sectors
Indonesia Perpres 61/2011 regulation: SF Action Plan, Sustainable Investment
Sustainable Reporting, and contribution Guideline (SIG) oleh
Green Taxonomy Kementerian Investasi/BKPM
Perpres 59/2017 5
 IDX’s Guidance for the Implementation of Sustainable Finance

The World Federation of Exchanges IDX strives to promote the implementation of

1. POJK No. 51/POJK.03/2017 ESG principles in the Indonesian capital market.
launched a set of five principles on
concerning the Implementation of sustainability To strengthen our commitment, IDX has been
Sustainable Finance for Financial Services (Oct 2018) to support the shift a member of the Sustainable Stock
Institutions, Issuers, and Public Companies towards a more sustainable and
Exchange (SSE) since 18 April 2019.
(“POJK 51”) - 18 July 2017 inclusive financial system.

2. Sustainable
Sustainability
Finance Roadmap The principles commit WFE members to: Development Goals (SDGs)
Phase II (2021-2025) 1) Educate participants in the exchange ecosystem for Stock Exchange
about the importance of sustainability issues;
2) Promote the enhanced availability of investor
relevant, decision-useful ESG information;
3) Actively engage with stakeholders to advance
the sustainable finance agenda;
4) Provide markets and products that support the
scaling-up of sustainable finance and the
reorientation of financial flows; and
3. Indonesia Green 5) Establish effective internal governance and
operational processes and policies to support
Taxonomy their sustainability efforts.
Edition 1.0 – 2022

Source : OJK Source : WFE Sustainability Principles Report 2018 Source : SSE, https://sseinitiative.org/

6
Sustainable Finance Milestones in the Capital Market

1. Publication of OJK Sustainable

1. Paris Agreement on Climate Finance Roadmap Phase II
1. OJK Regulation on Sustainable
1. Indonesia becomes the first (2021-2025)
Change 2015-2030 – ratified Finance for Banks, Financial
through Law No. 16/2016 on Paris mover for sustainable finance 2. ESG Capital Market Exhibition
Institutions, and Public
Agreement Companies - OJK Regulation No. initiative in Emerging Countries. and Showcase
2. Sustainable Development Goals 51/ POJK.03/2017 2. Implementation of OJK
(SDGs) - Presidential Decree No. 2. OJK Regulation on Green Regulation No. 51 for banks. IDX launched the IDX ESG
59/2017 SDGs Bond - OJK Regulation No. 60/ Microsite to support investor
3. Publication of OJK Sustainable POJK.04/2017 literacy and encourage listed
Finance Roadmap Phase I (2015 IDX becomes a member of companies to embark on their
- 2019) Sustainable Stock Exchanges. journey towards sustainability.

2014 -
2012 2016 2017 2018 2019 2020 2021 2022
2015

Indonesia becomes a
founder and a 1. Pilot Project: The First Movers 1. Issuance of the first Green Indonesia Green Taxonomy,
Bond/Sukuk by the Government IDX launched the IDX ESG
member of on Sustainable Banking. composed by OJK through the
and financial institutions. Leaders index, with ESG
Sustainable Banking 2. Pilot Project: Bali Center for Integrated Financial Services
2. Technical guidelines for the scoring provided by
Network (SBN) IFC Sustainable Finance (OJK - Sector Policy Group (GKKT)
implementation of OJK Regulation Sustainalytics
World Bank. Universitas Udayana).
3. Sustainable Finance No. 51/2017 for banks.
Information Hub 3. The establishment of Indonesia New Rule Number I-B
Sustainable Finance Initiative concerning Listing of Debt-
(alumni of First Movers). Type Securities which
includes incentives for
IDX joins the Climate Bonds Initiative Green Bond Issuance
Partner Program to support green bond
development in the market
7
 source: www.mirifica.net

IDX Initiatives
8
IDX Actions to Support the Implementation of ESG

3 IMPLEMENTING GCG IN INTERNAL PRACTICES

1. ISO 9001 – Quality Management System 4 EDUCATE STAKEHOLDERS
2 PROVIDE INFRASTRUCTURE 2. ISO 27001 – Information Security Management
3. ISO 22301 – Business Continuity Management 1. IDX promotes Sustainable Finance Literacy and Inclusion to
(MARKET AND PRODUCTS) 4. ISO 37001 – Anti-Bribery Management Systems the Stakeholders (Especially Listed Companies) by
IDX develops market and products to implement 5. Whistleblowing System (Letter to IDX) collaborating with OJK, AEI, ICSA, IAI, GRI and other
Sustainable Finance through: institutions.
1. SME Listing and Supports 2. IDX holds routine discussions with institutional investors
IDX Incubator & Acceleration Board and educational sessions with retail investors to increase
2. Green Products:
Green Bonds, ESG Related ETF Products, ESG 3 awareness towards ESG investing.

Related Mutual Fund Products

3. Green Indices:
2 4
IDX ESG Leaders, SRI-KEHATI, ESG Sector
Leaders IDX KEHATI, ESG Quality 45 IDX KEHATI
4. Future Initiative :
Carbon Trading, ESG Risk Rating Disclosure in IDX 5 ACCESS OF INFORMATION
Website

1 5 IDX strives to increase transparency and reduce asymmetric

information for the investor through:
1. Electronic reporting & integrated System
(SPE-IDXnet)
1 ENGAGE STAKEHOLDERS TO 2. Promote Green Reporting & Filing through Listing & IPO
IMPLEMENT SUSTAINABLE FINANCE Filing Integration through SPRINT
3. Special Notations (ABCD.X)
1. Build strong relationship and collaboration with related 4. Electronic Indonesia Public Offering (E-IPO) (Read more)
institutions 5. ESG Scoring (Provided by Sustainalytics)
2. Incentives for Green Products 6. IDX ESG Microsite (esg.idx.co.id)
3. Appreciations for the Stakeholders: AR Award, ASEAN
Corporate Governance Scorecard

9
 Type equation here.ESG Indices at IDX

To guide investors towards ESG investing and to promote companies with good ESG practices, IDX has
introduced the following ESG indices:

Launch date: 8 June 2009

Launch date: 20 December 2021 Launch date: 11 November 2022
ESG scoring provider: Yayasan Kehati
Selection method: Exclusionary ESG scoring provider: Yayasan Kehati ESG scoring provider: Carbon Emission
Intensity (Scope 1+2)
screening, ESG integration Selection method: Exclusionary
Selection method: Exclusionary, Best in Class
Constituents: 30 screening, Best in class
Constituents: Not fixed Constituents: ≤ 45

Launch date: 20 December 2021

Launch date: 14 December 2020
ESG scoring provider: Sustainalytics ESG scoring provider: Yayasan Kehati
Selection method: ESG integration Selection method: Exclusionary screening,
Constituents: 25 Best in class, ESG integration
Constituents: 45

10
IDX ESG Leaders Index (1/3)
Sustainalytics as the ESG Rating Provider for Index Constituent Selection

Investment
Decision
ESG Risk Rating

Listed
ESG Rating
companies
Provider
(constituents
of IDX80)

Global &
New ESG Indices Local Funds
IDX ESG Leaders Index
Increased
investments in
Indonesia
Capital Market
Companies are
Investment
motivated to
managers launch
improve their
ETFs/mutual funds
ESG ratings

11
IDX ESG Leaders Index (2/3)
Material ESG Issues (MEIs) List - Sustainalytics

12
IDX ESG Leaders Index (3/3)
Increased transparency in listed companies’ risk rating improvements

Average ESG risk ratings of Number of IDX80 constituents with a 0-30

IDX80 constituents (Negligible – Medium Risk) Rating

33.05
Negligible 40
Note: More companies in
0-10 A low rating indicates the IDX80 index
a low level of ESG have improved their
Low risk exposure. ESG risk ratings to
10-20 Negligible-Medium
Risk.
Medium

20-30

High 31.96
34
30-40

Severe

40

Dec-20 Dec-21 Dec-20 Dec-21

13
 Green Bonds at IDX (1/2)

PT Sarana Multi PT Bank Negara PT Bank Rakyat Indonesia

Infrastruktur Indonesia (Persero) Tbk (Persero) Tbk
Obligasi Berwawasan
Green Bond Berkelanjutan I Green Bond I PT Bank
Lingkungan Berkelanjutan I
Name : Sarana Multi Infrastruktur Name : Negara Indonesia (Persero) Name :
Bank BRI Tahap I Tahun
Tahap I Tbk
2022
IDR500 billion (under an IDR5 trillion (under an IDR15
Issuance amount : Issuance amount : IDR5 trillion Issuance amount :
IDR3 trillion program) trillion program
Tenor : 3 and 5 years Tenor : 3 and 5 years Tenor : 370H, 3, and 5 years
Listing date : 6 July 2018 Listing date : 22 June 2022 Listing date : 21 July 2022
22 June 2025 and 22 June 26 July 2023. 21 July 2025
Maturity date : 6 July 2021 and 6 July 2023 Maturity date : Maturity date :
2027 and 21 July 2027
Coupon rate : 7,55% dan 7,8% Coupon rate : 6,53% and 6,85% Coupon rate : 3,70%, 5,75% and 6,45%
Rating : idAAA (Pefindo) Rating : idAAA (Pefindo) Rating : idAAA (Pefindo)
Second Party Second Party Second Party
Opinion Provider Opinion Provider Opinion Provider SDGs Hub Universitas
: CICERO : Sustainalytics :
on Green Bond on Green Bond on Green Bond Indonesia
Framework Framework Framework

14
Green Bonds at IDX (2/2)
Incentives from OJK and IDX

Issuer Incentive Listing Incentive

(OJK) (IDX)

Article 17
(1) The Financial Services Authority To support the issuance of green bonds at
POJK No. 60 may provide incentives for Issuers IDX, the tariff for the annual listing fee of
/POJK.04/2017
Issuance and
who issue Green Bond. green bonds is charged at
Requirements of (2) Provision of incentives as referred
Green Bond
to in paragraph (1) determined by
the determination of the Financial
Services Authority.
50%
The Financial Services Authority may provide
incentives such as:
of the listing fee rate
as referred to in provision V.1.
(1) Human resources capacity building for Issuers; Rule Number I-B
(2) Sustainable Finance Award; and/or concerning Listing of
Debt-Type Securities
(3) Other incentives

15
Sustainability Reporting by IDX Listed Companies (1/2)

The timeline for mandatory sustainability reporting by

listed companies according to POJK No.
51/POJK.03/2017 is as follows:

Current status of SR submission by listed companies

Sustainability Report (SR)

SR Period OJK Relaxation* Number of Total number

Category listed of listed %
Buku 3, Buku 4 & Foreign Banks
2019 companies companies

Buku 1 & 2 Banks, Large-scale SR 2021 to be SR 2020 - Submitted as of

submitted by 154 766 20%
Dec 2021
listed and public companies 2020 end of
(Asset > IDR250Bn) May 2022
SR 2021 - Submitted as of
31 May 2022 (due date for 556 787 71%
Medium-scale listed companies Listed Companies)
(IDR250 Bn > Asset > IDR50 Bn ) 2022
SR 2021 - Submitted as of
601 787 76%
cut off 30 Jun 2022 (17:00)
Small-scale listed companies 2024 Source: IDXNet
(Asset < IDR50 Bn)

*)The relaxation for the submission of SRs is provided by SE OJK No. 4/2022 (Link)
16
 Sustainability Reporting by IDX Listed Companies (2/2)
Seminars held by IDX in collaboration with GRI to support sustainability reporting by listed companies

2018 2019 2020 2021 2022

ESG Webinars ESG Webinars ESG Webinars ESG Webinars ESG Webinars
For PLCs: For PLCs: For PLCs: For PLCs:
• SRO : 9 July 2018 : Sustainability • 11 July – 5 Nov 2019 consist of 4 Batches : • 2-3 Jun 2021 : IDX-GRI-CDP : Beginner • 23 Feb 2022 : IDX-GRI-AEI-Deloitte : CEO
For PLCs: Meeting
Reporting Awareness IDX-AEI : “Workshop Sustainability Seminar
• 3 July 2020 : IDX-GRI : • 23-30 Jun 2021 : IDX-GRI-CDP : Advance • 1 Mar 2022 : IDX-IGCN : Launching SDG 16
Reporting” Business Framework & Reporting
• SRO : 10 July 2018 : How to make Reporting on Emission and Seminar
• 8 Mar 2022 : IDX-IGCN : Consultation Class 1 -
Sustainability Reporting • 11-12 Mar 2019 consist of 3 Batches : IDX- Climate Risk • 30 Sept 2021 : IDX-GRI-AEI - Deloitte : CEO
Business and Human Rights, Women Rights,
GRI : “How to Start and Common Meeting Child Rights
• Investor : 11 July 2018 : Sustainable Technical Issues in Reporting?” • 9 July 2020 : IDX-GRI : • 21-22 Oct 2021 : IDX-GRI-CDP : Advance • 15 Mar 2022 : IDX-IGCN : Consultation Class 2 -
Investment for investors Workshop Corruption, Bribery, Illicit Financial Flow
Reporting on Waste with • 1 Dec 2021 : IDX-GRI-CDP : Capital Market • 22 Mar 2022 : IDX-IGCN : Consultation Class 3 -
• 13 Mar 2019 : IDX-IFC-SSE Initiative, UN
• Listed Companies : 13-16 Aug 2018 Circular Economy Prospective Workshop Transformative Governance
Global Compact: “Ring The Bell for Gender
consist of 7 Batches Sustainability • 27 Jul 2021 : OJK – SRO : ESG Capital • 30 Mar 2022 : IDX-GRI-CDP : Masterclass
Equalities” Environmental Reporting
Reporting Awareness • 21 July 2020 : IDX-GRI : SDGs Market Summit
• 21 Apr 2022 : IDX-IBCWE : Webinar Rising to
• 28 Mar 2019 : IDX-GRI : “How to Report Reporting • 22 Dec 2021 : IDX-IBCWE : Capital Market
The Top Leadership in Executive Position in
Gender Equality, Water, Occupational Women Empowerment Forum IDX200
• 12-13 Oct 2021 : IDX-Bappenas : Support •
Health and Safety in Sustainability • 4 Aug 2020 : IDX-GRI : Workshop Kerja Sama dengan Bappenas :
31 May 2022 : IDX-GRI-IBCWE : Masterclass
Report?” Gender Reporting
Preparing Stakeholders Penyusunan RAN SDGs • 8 Jun 2022 : IDX-IIF : CEO Sharing Session -
• 25 Apr 2019 : IDX-GRI : “Business Engagement and Sustainability “Penerapan ESG di Pasar Modal Indonesia”
Strategy • 25 May & 22 Jun 2022 : IDX-SSE UN-IFC-CDP :
Reporting on the Sustainable Task Force on Climate-Related Financial
Development Goals” Disclosures 17
IDX Actions Part of ESG Capital Market Exhibition & Showcase 2021 – IDX
ESG Microsite (https://esg.idx.co.id/)

The ESG Microsite presents information related to sustainability aspects and the principles of Environmental,
Social and Governance (ESG), completed with virtual showcases of ESG practitioners from the Indonesia
Listed Company that can be refer as role models and benchmark for business players in Indonesia.

MAIN CONTENT FROM ESG MICROSITE

ESG STAR LISTED COMPANIES

1. PT AKR Corporindo Tbk (AKRA)
2. PT Bank Central Asia Tbk (BBCA)
3. PT Bank Mandiri Persero Tbk (BMRI)
4. PT Bank Negara Indonesia (Persero) Tbk (BBNI)
5. PT Bank Rakyat Indonesia (Persero) Tbk (BBRI) OTHER
ESG AT A GLANCE 6. PT Bumi Serpong Damai Tbk (BSDE) EVENTS
7. PT Semen Indonesia (Persero) Tbk (SMGR)
INFORMATION
8. PT Unilever Indonesia Tbk (UNVR)

LAUNCHING ESG MICROSITE ESG MICROSITE

Go to ESG
22 December 2021 Platform

18
ESG Focus Going Forward

Carbon Trading ESG Scoring on IDX Website ESG Showcase & Exhibition
Start Development : 2023 Q4 2022 (Capacity Building)
(2017 - on going)

19
End of Document

20