Jakarta. State-owned bank BNI recently said it sought to grow its sustainable portfolio to drive more sustainable growth for Indonesia.

According to BNI’s institutional banking director Muhammad Iqbal at the recent 2023 CEO Networking session, BNI’s sustainable financing has reached Rp 178.9 trillion as of Sep. 2023. This marks about 27 percent of the bank’s total credit portfolio. The bank’s sustainable portfolio encompasses MSME financing (Rp 118.3 trillion), management of environmentally-friendly businesses and natural resources (Rp 21.5 trillion), renewable energy (Rp 10.1 trillion), and financing for pollution prevention (Rp 3.7 trillion). It also includes other forms of sustainable portfolio which amounted to Rp 25.3 trillion.

The bank has also partnered with other corporations for sustainability-linked loans. BNI reported that its sustainability-linked loans portfolio has reached Rp 4.7 trillion as of the third quarter of 2023. They went to multiple sectors, including agroindustry, cement, and steel manufacturing.

In line with the government’s goal to reach net zero emissions by 2060, BNI is also committed to driving sustainable finance. It will promote the implementation of environmental, social, and governance (ESG) principles while offering attractive pricing as incentives for all BNI partners. According to Iqbal, Indonesia’s economic growth is expected to be stable at around 5 percent over the next five years. The percentage of the working-age population is at 76.2 percent. In order to avoid the middle-income trap, gross national income (GNI) per capita is expected to reach S$14,000 before 2045 through an economic transition from consumption-based to investment-based. This calls for policies that support sustainable investment.

Iqbal then named three investment areas with growth potential. First is the global supply chain integration including the domestic processing of natural resources, the electric vehicle ecosystem, and export-oriented products (e.g. automotive, food and beverage, electronics). Second is the labor-intensive industries, including agriculture, tourism, and services. Last but not least are investments that prioritize ESG, including geothermal, food, and water security, as well as infrastructure that help drive Indonesia’s energy transition.

“As environmental risks and climate change are increasingly under the spotlight, we will concentrate more on sectors related to sustainable economy,” Iqbal said.

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