"The most important thing is that we all have one vision, mission, and goal, so the key is a change in mindset and collaboration," economic affairs deputy at the National Development Planning Ministry/National Planning and Development Agency (Bappenas), Amalia Adininggar Widyasanti, remarked here on Tuesday.
According to Widyasanti, a change in mindset is crucial because green investments are gaining preference. Likewise, industrial development that implements green technology and uses new renewable energy is being prioritized globally, she added.
"The global trend shows that consumers want green and environmentally friendly products. The concern of (using green products) has begun; thus, (the question is) how we can encourage the production side to achieve the goal of green energy together," she explained.
It is estimated that Indonesia will need US$247.3 billion in financing to achieve its 2030 emissions reduction target, Widyasanti added.
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Indonesia faces a number of challenges in this task, including global investors’ view of the high ESG (environmental, social, and governance) risk in banks due to low environmental standards and the non-existent NDPE (No Deforestation, No Peat, No Exploitation) policy enforced on debtors, she highlighted.
Furthermore, according to Chain Reaction Research, in 2018, the high credit risk was equivalent to 12 percent of banking capital, she noted.
"Some multinational companies have ended contracts with Indonesian companies that did not meet environmental standards, besides from unmatched understanding and approaches in terms of determining the green criteria threshold," she revealed.
Indonesia's commitment to tackling climate change has been listed in the 6th National Priority in the National Medium Term Development Plan 2020–2024, which is building the environment quality and improving resilience against disaster and climate change, as well as low-carbon development, she said.
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Translator: Kuntum R, Kenzu T
Editor: Suharto
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