This diversification program is part of Bank Mandiri's commitment to supporting Indonesia's 2022 G20 Presidency as well as becoming the landmark transaction as the first ESG repo transaction in Indonesia and one of the first movers in Southeast Asia, Bank Mandiri's Director of Treasury and International Banking Panji Irawan explained here on Monday.
Bank Mandiri as a repo seller is committed to distributing the received funds to fund green projects with the criteria that refer to Mandiri's sustainable bond framework.
"This ESG repo transaction is a strategic initiative, as not only does it strengthen the company's funding structure in support of business expansion plans but also implements a sustainable financial action plan of the sustainable banking pillar," Irawan affirmed.
In 2021, Bank Mandiri had issued the first sustainable bond framework worth US$300 million for environmental and social-based projects.
Through three strategic pillars -- Sustainable Banking, Sustainable Operations, and Sustainable Corporate Social Responsibility (CSR) & Financial Inclusions -- Bank Mandiri vows to run the practice of sustainable finance initiated by the government.
Furthermore, Irawan also explained that the ESG bonds had grown rapidly since 2015, and there was a significant increase in social bonds since the COVID-19 pandemic.
According to Irawan, it is a reflection for issuers to follow up on health and other social issues during the pandemic.
The demand for ESG instruments, such as green bonds, with long-term tenor, is expected to continue to increase as more companies become aware of ESG-related issues.
"Bank Mandiri is committed to supporting the government's program in developing a sustainable economy, participating actively in the Financial Services Authority's (OJK's) roadmap of sustainable finance, and striving for the 17 Sustainable Development Goals (SDGs)," Irawan pointed out.
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Translator: Citro A, Kenzu T
Editor: Sri Haryati
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