The state-owned, publicly listed lender continuously encourages various programs that apply ESG as an operational standard for sustaining the company and its performance.

BNI risk management director David Pirzada said the bank played an important role in promoting more responsible business practices by adopting ESG.

David added that BNI upheld the 3Ps of profit, people and planet in applying the ESG principles. The bank was also continuing its efforts in developing infrastructure and standards for implementing across all its business lines.

"Of course, we are proactive in implementing the ESG principles. BNI is playing a role as a transformational agent in implementing ESG to support sustainable finance," he said.

In addition, BNI had launched a green banking portfolio to provide sustainable financing for businesses in a variety of sectors.

"Launched in 2020, sustainable business activities make up 28 percent of BNI's overall loan portfolio. [This is] around Rp 14 trillion, or around 8 percent of total CSPA [conditional sales and purchase agreement],” said David.

In terms of monitoring and evaluation, he continued, one of the indicators BNI was using at present was the ESG risk ratings of Morgan Stanley Capital International (MSCI). BNI was current rated A, the highest among Indonesian banks.

BNI also recently issued Rp 5 trillion in green bonds to be used to facilitate green business projects, in keeping with the bank’s guiding principles to contribute to Indonesia’s transition to a low-carbon economy.

The lender had also received a rating of AAA, the highest rating, for its long-term debts with a maturity of one year from domestic credit rating agency PEFINDO.

"So, the book building that has been done, which has been oversubscribed 4 times, indicates that investors appreciate BNI's commitment” to sustainable finance, said David.

He added that many investors and businesses were watching Indonesia to see how it planned and implemented ESG standards. Meanwhile, BNI was gradually building a portfolio that focused on ESG and improving approaches to effectively implementing ESG.

Chief APAC economist Steve Cochrane of Moody's Analytics has said that all stakeholders must be willing to think about long-term investments with outputs and outcomes over a longer term of at least 30 years ahead. This would ensure growth in productivity and employment amid the industrial transition.

Moreover, in adjusting to this transition, closed corporations would have high costs, so they must implement any derivative programs carefully and measurably.

"We've seen a lot of very good, stable economic development policies over the last eight years and some of that has been strong capital in infrastructure, and I think it will continue to grow because there's still a lot to be done," said Cochrane.

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