The Indonesia Stock Exchange (IDX), one of Southeast Asia’s leading exchanges, and CDP, an international non-profit that runs the global environmental disclosure system, signed a Memorandum of Understanding (MoU) to further stimulate the growth of Taskforce on Climate-related Financial Disclosures (TCFD)-aligned disclosure in Indonesia. The MoU was signed by Inarno Djajadi representing IDX and John Leung representing CDP in Jakarta, on Monday, 15 June 2022.
John Leung, Director South East Asia and Oceania of CDP, said: “We are delighted to be working with the Indonesia Stock Exchange through this important partnership. Supporting more companies in Indonesia to disclose their climate-related risks and opportunities will be crucial in bolstering the country’s economic resilience to the impacts of climate change, particularly as we know that Indonesia, and the Asia-Pacific region more widely, has pronounced vulnerability to climate risks. CDP looks forward to lending our two decades of insights, expertise, and data to this exciting work, driving more ambitious environmental action in a region that is already demonstrating impressive leadership.”
IDX and CDP are both supporters of the TCFD, and this partnership will allow both organizations to better understand the benefits of and necessity of environmental disclosure (environmental disclosure helps to drive action by informing decision making, providing accountability which incentivise further action, and helps track and monitor progress), and to overcome any potential barriers to comprehensive reporting. The resulting increase in the number and quality of environmental disclosures in Indonesia will allow stakeholders to better incorporate ESG data into their operational and investment decisions. Through this MoU we are targeting non-banking financial institutions, realizing there is a discrepancy awareness between banking and non-banking financial institutions.
Hasan Fawzi, Business Development Director of IDX for the period of 2018-2022 said: “This partnership with CDP demonstrates our strong commitment to ESG practices, sustainability, and transparency. Environmental disclosure is critical for boosting capital market resilience in Indonesia and wider economy. We are delighted to be working with CDP on this important issue.”
In order to achieve the shared goal of increasing the number and quality of corporate environmental reporting in Indonesia, IDX and CDP will collaborate to:
- Provide capacity building to non-banking financial institutions, including investment managers, pension funds, and insurance companies on topics including climate risk management and setting and achieving net-zero targets, this will help to drive sustainable business practices through lending policies, and engage with companies they lend to and invest in.
- Increase IDX’s visibility on the current state of environmental reporting among Indonesian listed companies with the provision of data disclosed through CDP; and
- Build capacity among IDX staff on best practices in measuring and reporting climate-related information in order to facilitate IDX’s first climate disclosure through CDP’s disclosure platform