SUSTAINABLE FINANCIAL REPORTING IN FINANCIAL SERVICES INSTITUTIONS: CASE OF INDONESIA

• Main Author: Dhiku Widyosekti, Muhammad
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/80681
• Institution: Institut Teknologi Bandung

As a participant in the global effort to combat climate change and achieve net-zero emissions by 2050 through the Paris Agreement, Indonesia has committed to a significant reduction of 31.89% in greenhouse gas emissions by 2030. In response to this commitment, the Financial Services Authority (OJK) has developed a strategy and roadmap to align the Indonesian financial system with international sustainable goals. The strategy involves providing funding, financing, and investment to industries that consider aspects of sustainable development goals, a framework called Sustainable Finance. To reinforce this commitment among Financial Services Institutions (FSIs), OJK enacted Regulation No 51/POJK.03/2017, binding all FSIs to comply with the roadmap and integrate sustainable finance into their operations. This study aims to investigate the practical implementation of this Regulation, focusing specifically on FSI listed on the Indonesia Stock Exchange. The research examines the FSI that have reported sustainability information, detailed the content of these reports, and identified factors influencing the quality of such reporting. The findings indicate a positive trend over the past five years, showing an increase in the disclosure of sustainability reports. However, there remains room for improvement in implementing quality aspects related to environmental performance. Companies with more considerable total assets and debts, led by CEOs with shorter tenures, tend to issue higher-quality sustainability reports. This study marks the first evaluation of sustainability reports for financial services institutions utilizing the POJK 51 framework. Considering the results, recommendations are provided for OJK and relevant stakeholders to enhance the effectiveness of the sustainable finance roadmap.