2022 State Budget: Fiscal Policy and Structural Reform
Green Taxonomy
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Proposed Definition
of Green Taxonomy
Classification of sectors based on business activities that support environmental
protection and climate change mitigation and adaptation.
The Green Taxonomy is used as a guideline for information disclosure in the Financial Services Sector and can be used as a reference for
creating innovative sustainable financial products and/or services.
In developing the Green Taxonomy, OJK actively participates in the Financial Stability Board, particularly regarding sustainable financial
disclosure for Financial Services Institutions in the Financial Stability Board - Workstream on Climate Disclosures/WSCD and the ASEAN
Taxonomy Board.
The finalization of the Green Taxonomy involved 43 Directorate Generals in 8 related ministries to confirm the thresholds and to categorize
around 2,700 sectors and sub-sectors classification.
Green
Taxonomy
Definition
Green taxonomy is a classification system that
establishes a list of environmentally
sustainable economic activities.
A classification tool for the financial industry (banking) to
protect the environment and reduce greenhouse gas
emissions.
(EU Green Taxonomy, 2019)
(China Green Catalogue, CBRC, 2013).
Benefits of
Green
Taxonomy
As a guideline for allocating capital, a tool to support risk assessment, and a reference for other stakeholders
in supporting efforts to mitigate and adapt to climate change.
In its development, the green taxonomy is flexible and dynamic so that it can adapt to investment strategies
and patterns and changes in technology, science, activities and new data.
Source: Financial Services Authority (OJK)
(ASEAN Taxonomy for Sustainable Finance ver.1, Nov 2021)
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