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Indonesia’s Strategy for Sustainable Finance

Author

Listed:
  • Igor A. Yakovlev

    (Financial Research Institute, Moscow 127006, Russian Federation)

  • Svetlana I. Nikulina

    (Financial Research Institute, Moscow 127006, Russian Federation)

Abstract

According to the 2030 Agenda for Sustainable Development, inclusive green growth is considered to be the pathway to sustainable development. The transition to a resource-efficient green economy is especially challenging for developing countries due to a huge funding gap to implement the Agenda. Governments can play a proactive role in this process by incorporating sustainability factors into national financial systems to channel capital flows into green projects. Indonesia has greatly advanced toward a more sustainable financial system. Its experience in this sphere is especially valuable for the Russian Federation, which is currently shaping its policy of financing sustainable development. The study aims to identify the key facets of Indonesia’s strategy for sustainable finance. The authors outline the major aspects of Indonesia’s action plan and examine its regulatory framework for sustainable finance, including the domestic green bond market. They also analyze Russia’s current initiatives to promote sustainable finance at the national level. The authors come to the conclusion that the Indonesian strategy for sustainable finance is distinguished by specific objectives and principles of sustainable finance closely tied to national development priorities; a clear-cut action plan with time-bound measures to create a conducive environment for sustainable finance; a comprehensive regulatory framework embracing the entire financial sector; a phased approach to the transition to sustainable financing; and strong regulatory support for financial institutions during the transition period.

Suggested Citation

  • Igor A. Yakovlev & Svetlana I. Nikulina, 2019. "Indonesia’s Strategy for Sustainable Finance," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 6, pages 83-95, December.
    • Handle: RePEc:fru:finjrn:190606:p:83-95
    DOI: 10.31107/2075-1990-2019-6-83-95
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    References listed on IDEAS

    as
    1. Igor A. Yakovlev & Ludmila S. Kabir, 2018. "Green Investment Financing Mechanism as an Element of the National Strategy for Sustainable Development Financing," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 3, pages 9-20, June.
    2. Falcone, Pasquale Marcello & Morone, Piergiuseppe & Sica, Edgardo, 2018. "Greening of the financial system and fuelling a sustainability transition," Technological Forecasting and Social Change, Elsevier, vol. 127(C), pages 23-37.
    3. Matthew Haigh, 2012. "Publishing and defining sustainable finance and investment," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 2(2), pages 88-94, April.
    4. E. Buttin, 2016. "Green bonds: a solution for financing the energy transition or a simple buzzword?," Quarterly selection of articles - Bulletin de la Banque de France, Banque de France, issue 44, pages 20-27, Winter.
    5. Olga V. Bogacheva & Oleg V. Smorodinov, 2016. "Green Bonds as a Key Instrument for Financing Green Projects," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 2, pages 70-81, April.
    6. Olga V. Bogacheva & Oleg V. Smorodinov, 2016. "Government Measures Aimed at Formation and Development of Green Bond Market," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 3, pages 55-65, June.
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    More about this item

    Keywords

    sustainable development; sustainable financing; green economy; low-carbon economic growth; environmentally friendly projects; green investments; green bonds;
    All these keywords.

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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