Environment, Social, and Governance (ESG) Framework in Government Support and Facility for Infrastructure Financing

In 2015, world leaders agreed on the Sustainable Development Goals (SDGs), a blueprint for achieving global prosperity and well-being by 2030. The SDGs build upon the success of the Millennium Development Goals (MDGs) Agenda by expanding its scope and setting new and aspirational targets. The seventeen interlinked goals of the SDGs then became a shared commitment to end poverty, fight inequality, and mitigate the adverse impacts of climate change. In line with SDGs, in 23 September 2022, Indonesia has committed to increase its ambition in reducing the Green House Gas (GHG) emission through the Enhanced Nationally Determined Contribution (ENDC) by 31.89% (from 29% previously) unconditionally and by 43.2% (from previously 41%) conditionally.¹ The ENDC document is a renewal of the National Determined Contribution (NDC) document which shows the strong commitment of Indonesia in achieving a low-carbon climate-resilient economy and is part of the SDGs achievement. The Government of Indonesia’s (GoI) efforts to achieve the SDGs has also been followed up by the publication of Indonesia’s SDGs Roadmap.² The Roadmap shows that development and provision of infrastructure plays an important role and underlies the achievement of almost every development target, from the goal of eradicating poverty and hunger, developing quality education, creating clean and sustainable energy, as well as other aspects. This Roadmap also becomes a guideline in preparing the National Development Plan, including the Indonesia National Medium-Term Development Plan (RPJMN) 2020-2024 and has become a strong evidence in mainstreaming the SDGs as a priority to be achieved. Efforts to achieve the SDGs are increasingly needed since the COVID-19 pandemic, which has tremendously affected all sectors of life. The health and social challenges caused by COVID19, coupled with the continued threat of climate change, have shifted the direction of global policies to be more “green and blue”, and prioritize risk management to prevent the potential of even greater losses in the future. Along with the increasing global awareness on climate change and the loss of biodiversity, capital owners are also starting to shift their investment priorities. The interest of investors, as well as multilateral institutions, are now changing towards more sustainable investments, which highly consider how programs or projects pay attention to environmental, social, and governance aspects.
source :
https://kpbu.kemenkeu.go.id/backend/Upload/guideline/GUIDELINE22111200170842.pdf
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