Assistant director of Bank Indonesia’s macroprudential department, Heru Rahadyan, on Wednesday advised the public to choose green financial or investment products to support the development of green projects that can encourage energy transition efforts.
“Opt for a green bank, observe the financial statements, whether it invests in green (projects) or not, whether its credit is green or not,” he said during a discussion on “Sustainable Finance 101” organized by Bank Indonesia, here on Wednesday.
To participate in energy transition efforts and help mitigate climate change, he advised Indonesians to invest in financial or investment products owned by companies that run green projects.
In choosing investment products, he suggested that people consider stocks of companies listed on the Sustainable and Responsible Investment-KEHATI Index (SRI-KEHATI) and green Islamic bonds or green sukuk for bond instruments.
“Green bonds, green mutual funds, (and) a lot of green projects are now starting to develop, so we can start with ourselves and then invite people around us,” he said.
According to Rahadyan, being selective in choosing financial products or investments is very necessary because they will have an impact on environmental sustainability in the future.
At the same discussion, director of state debentures (SUN) at the Directorate General of Budget Financing and Risk Management of the Finance Ministry, Deni Ridwan, asked the public to consider the Triple Bottom Line (BTL) that looks at three aspects—people, profit, and the planet—while choosing financial or investment products.
In addition, he said, the public can also apply the 2L formula, namely legal and logic, which means that the product has received a license from the Financial Services Authority (OJK) and the people know the source of the company’s profits.
There is also the 2R formula (risk and return), for which people will need to understand both the risks and potential benefits of a product.
Source: Antara News