Schneider Electric’s Indonesia and Timor Leste cluster president Roberto Rossi suggested the government consider formulating effective regulations that could encourage investors and companies to incorporate ESG criteria into their decisions and activities and help Indonesia achieve its net-zero emissions target by 2060.

“Sustainable companies attract investors and talents,” he said during The Jakarta Post’s UpClose webinar on Friday, adding that Indonesia was going in the right direction in terms of carbon incentives and planning.

Nevertheless, Indonesia has shown significant progress in implementing its carbon pledge, said Rossi, citing the country’s achievement in reducing forest fires, reducing the deforestation rate and improving electric vehicle (EV) infrastructure.

The issuance of green infrastructure in project finance bonds is expected to rise as more governments adopt a net-zero carbon emissions target by 2050, a Fitch Ratings report, which was published in August, shows.

Separately, Faisal Rachman, an economist at state-owned Bank Mandiri, said ESG implementation had become the government’s main focus, considering the medium- and long-term development plan.

However, ESG implementation was not progressing as fast as expected due to the COVID-19 pandemic and lack of sectoral regulatory updates, he said, citing the need for material analysis regulation in the manufacturing sector. As of 2020, he noted, only 14 percent of listed companies had submitted their ESG report, citing a report by the Indonesia Business Coalition for Women Empowerment (IBCWE).

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