Jakarta. Indonesia can attract investors into its mineral and coal mining sectors by embracing environmental, social, and governance principles, according to an industry association.

Indonesia is in pursuit of investments -- both from home and abroad -- to grow its economy and develop its industries.

Anggawira, the chairman of the Indonesian Energy, Mineral, and Coal Suppliers (Aspebindo), said major financial institutions had become more aware of ESG's importance. Green taxonomy and sustainability-linked financing, too, have become the new norm amidst increasing efforts to save the planet.

"Large financial institutions such as BlackRock, IFC [International Finance Corporation], and sovereign funds accross Europe and the Middle East have required ESG before making an investment," Anggawira said in Jakarta on Friday. 

Investors can also minimize their investment risks by implementing ESGs. Mines that operate without such standards are highly exposed to social disruption, agrarian conflicts, and legal risks. Last but not least, the global commodity market is now increasingly oriented towards ESG. As a case in point, European and Japanese markets have begun implementing carbon standards for coal and metal imports.

"Going forward, commodities that do not have a low carbon footprint or clear origins could lose market access," he said.

The businessman, however, admitted that mining vehicles still produced relatively high levels of carbon emissions. Such trucks mainly run on diesel. Heavy equipment also remains conventional.

"Especially those used for coal and mineral transportation," Anggawira said.