Labuan Bajo, East Nusa Tenggar (ANTARA) - Chairperson of the Indonesian Chamber of Commerce and Industry (Kadin) Arsjad Rasjid stated that Indonesia is not only following the global trend on the development of impact investing, but is also becoming the most active investment destination in the region.

Delivering a video statement shown at he opening of Impact Investment Day (IID) 2024 here on Sunday, he said that in recent years, impact investing in Indonesia had gained momentum as investors had become more aware of environmental, social, and governance (ESG) principles.

The impact investment had significant growth recently due to the needs to address crucial global issues, such as poverty, inequality, and climate change, he said.

Arsjad stated that based on data from the Global Impact Investing Network (GIIN), the value of assets, managed through impact investing around the world, reached more than USD1.1 trillion (Rp16,927.9 trillion).

Meanwhile, according to the Australian Agency for International Development (AusAID), he noted that there were around 131 bills (RUU) secured in Indonesia during 2020-2022, attracting nearly USD1.5 billion (Rp23.08 trillion, exchange rate as of Friday (6/9) = Rp15,389) in investment.

"The trend is clear, more investors are starting to adjust their portfolios to solve global issues," Arsjad said.

The trend resulted in a shift in paradigm as business players started to give more attention to social and environmental impacts, not only the financial profit, he said.

Therefore, investors began to prioritize long-term investments that encourage a low-carbon future and sustainable development, he added.

However, the investment value is still not enough to address the increasing social gap in Indonesia.

"This challenge is too significant to be addressed solely by individuals, corporations, CSR (corporate social responsibility) contributions, or NGOs (non-governmental organizations)," he said.

To deal with the challenges, he said the realization of impact investing needs to be increased by formalizing social entrepreneurship.

He remarked that social entrepreneurship encouraged innovative solutions to address poverty and inequality, not only gaining profit.

He also said that now there are many social entrepreneurs who help and become partners of the government in development.

"Kadin is a partner to the government. We are actively supporting the Social Enterprise Bill, which aims to create supportive legal frameworks that will allow these enterprises to thrive and attract more impact -oriented investment," Arsjad stated.

Impact Investment Day (IID) 2024 was a side event of the Indonesia International Sustainability Forum (ISF) 2024 held by Kadin Indonesia and Environmental Bamboo Foundation in Labuan Bajo, East Nusa Tenggara, on 7-8 September 2024.

The event included business pitching and match funding for selected social enterprises, including BambooCoop, EcoNusa Foundation, Jaga Semesta, Javara, Krealogi, Spedagi, Tiga Pilar Pertiwi, TORAJAMELO, Blue School, Kalara Borneo, and Riles Lestary.

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Reporter: Uyu Septiyati Liman
Editor: Rahmad Nasution
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