Tri Hita Consulting participated in the Post-Course Workshop organised by Australia Awards in Indonesia (AAI), held at Hotel Mercure, South Jakarta. The event was attended by Sustainable Finance Short-Course awardees, including representatives from government ministries, SOEs, banks, and think tanks. Representing Tri Hita Consulting, our Sustainable Finance experts, Julia and Verena, delivered a presentation on Integrating Climate Risk Management in Indonesian Banks, providing insights into the evolving regulatory landscape and practical challenges faced by financial institutions.
One of the key discussions centred on the implementation of the Climate Risk Management & Scenario Analysis (CRMS) in Indonesian banks, in line with OJK CRMS requirements. Since 31 July 2024, banks in the pilot phase are required to submit CRMS reports in Buku 6 format to OJK. However, the adoption process presents several hurdles. As a relatively new framework, CRMS lacks detailed guidance, making it difficult for banks to navigate. Building the necessary infrastructure takes time, and meeting reporting obligations remains a challenge.
Data availability also remains a significant barrier. In emissions reporting, banks struggle due to limited access to debtor data. OJK encourages banks to collect primary data from debtors. Furthermore, differences in data quality assessments between OJK’s tiered approach and PCAF scoring add another layer of complexity. OJK prioritises a bank’s readiness to manage climate risk, while PCAF assesses data accuracy.
Addressing these challenges requires long-term commitment. Effective climate risk management cannot be achieved overnight. It demands ongoing coordination, robust data collection, capacity-building efforts, regulatory alignment with OJK, and continuous improvements in risk management systems. Through collaborative efforts, Indonesian banks can enhance their resilience and contribute to a more sustainable financial ecosystem.
