Indonesian Capital Market Needs Unity of Understanding on Sustainable Investment

By : Abraham Sihombing And Aldo Bella Putra | Friday, December 08 2017 - 22:30 IWST

Bursa Efek Indonesia (Foto Rizki Meirino)
Bursa Efek Indonesia (Foto Rizki Meirino)

INDUSTRY.co.id - Jakarta - The index of sustainable investment has grown rapidly as a reference investment in global capital markets. As for Indonesia's capital market, Index Sustainable and Responsible (SRI) -KEHATI is the only form of green index in Indonesia.

The index was launched in June 2009 by the Indonesian Biodiversity Foundation (KEHATI) with the Indonesia Stock Exchange (IDX).

"Despite having KEHATI's Sustainable and Responsible Index (SRI), but up to now, Indonesia capital market stakeholders are still unaware and understand sustainable finance and investment," said M.S. Sembiring, Executive Director of Yayasan KEHATI, in Jakarta, Friday (08/12/2017).

Therefore, M.S. Sembiring, there should be a unity of understanding of the term sustainable investment, such as green index, sustainable and responsible investment index, socially responsible investment index, and so forth.

M.S. Sembiring argues, to unite that understanding, the support of capital market stakeholders is necessary. The reason, the understanding will be used as a guide for investors to invest in various sectors, especially the capital market.

"The support that can be done is to build awareness and understanding on finance and sustainable investment, make reference to the index with terms and understanding agreed by all stakeholders, as well as the reporting standards of issuers related to sustainable report," said Sembiring.

The Financial Services Authority (OJK) has actually taken steps by launching various policies to realize sustainable finance and capital markets in Indonesia, such as POJK. 51 /POJK.03/2017 on the Implementation of Sustainable Finance for Financial Services Institutions, Issuers and Public Companies.

In addition, RPOJK has also issued the Issuance and Requirements of Green Bond Securities (Green Bond), the Green Index plan, and the ASEAN Green Bond Standard.

OJK also launched the Sustainable Finance Road Map in December 2014. The Road Map is a guide to Indonesia's financial and capital market development.

"Sustainability Sustainable Road Map 2014 issued by OJK and the principles of Sustainable Development Goals (SDG's) can serve as a reference for perpetrators facing the development of sustainable investment in Indonesia," said Sembiring.

Furthermore, Sembiring, said that since its launching eight years ago, the SRI-KEHATI Index has consistent and consistent performance compared to other indexes on the stock, including the Composite Stock Price Index (IHSG) and LQ45 Index.

Until now there have been some investment managers who use the SRI-KEHATI Index as the base of mutual fund investment portfolios they manage. They are Premier ETF SRI-KEHATI (XISR) which is the product of Indo Premier Investment Management and RHB SRI-KEHATI Index Fund, which is product issued by RHB Asset Management Indonesia.

In the meantime, there are some investment managers who are in the final stage of launching a similar mutual fund product.

Globally, a sharp increase in investment in assets that embrace sustainable principles has also taken place. Among them are Principles for Responsible Investment (PRI).

The investment value of the PRI has increased significantly, from US $ 6.5 trillion in 2006 to US $ 68 trillion as of April 2017. (Abraham Sihombing)

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