Investor Presentaiton slide image

Investor Presentaiton

Investment Landscape Regulatory changes have been introduced to strengthen sustainable investment landscape The OJK has raised ESG requirements for financial services players and listed companies Indonesia's financial services providers have been required to submit either a sustainability report or a sustainable finance action plan (RAKB) since 2019, and all other issuers and public companies have been required to do so from 2020 - as per OJK Regulation (POJK) No. 51/POJK.03/2017. Technical Guidelines for Banks for the Implementation of OJK Regulation No. 51/POJK.03/2017 on sustainable finance IDX's ESG leaders outperformed their peers, February 4, 2014 - January 29, 2021 Released in 2018 by the OJK OK IDX 37.3% Indonesia Stock Exchange (IDX) ESG Leaders, index comprised 30 constituents (as of January 2021) from IDX80 with low ESG risk rating % 34.7% 25.5% IDX Composite (IHSG) LQ45, index of 45 most heavily traded stocks Improving investment 80 ecosystem & business activity 60 MSMEs & cooperatives 40 Other 20 Omnibus Law on Job Creation aims to improve ease of doing business and attract investment Enacted in November 2020. Aimed at reducing red tape in business and labour laws, which were viewed as unnecessarily complex. Amends some 78 laws and consists of 15 chapters. Breakdown of substantive articles amended by Omnibus Law on Job Creation (by focus) Government investment & national strategic projects Generally welcomed by the business community: optimism that a more agile labour market and reduced red tape will attract investment and facilitate socio-economic growth. However, amid concerns the legislation undermines worker rights and weakens environmental protections, in end-December 2021 the Constitutional Court ordered the government to amend parts of the law within two years. Land procurement • Classify 12 sustainable business activities to help banks improve their sustainable portfolio financing Elaborate on Sustainability Report/RAKB Among them: • Renewable energy Sustainable water and wastewater management Environmentally friendly transportation Environmentally sound buildings Investment business list was designed to welcome increased foreign investment - Presidential Regulation No. 10/2021, as amended by Presidential Regulation No. 49/2021, introduced an investment business list – sometimes referred to as a positive investment list. Effective March 2021, this replaced a so-called negative investment list of segments closed to foreign ownership. Listed business lines are open for 100% foreign investment; investors can enjoy tax facilities in the form of tax holidays, tax allowances or investment allowances. Includes additional provisions to favour MSMEs. Sectors with notable foreign investment growth potential, according to the Ministry of Investment/Indonesia Investment Coordinating Board (BKPM) Manufacturing Infrastructure Digital economy • FMCG Downstream natural resources Government aims to invest Rp430bn in infrastructure projects, in addition to the construction of the new capital (see slide 29), 2020-24 Primarily nickel and other minerals used for batteries Sustainable policies OJK Regulation (POJK) No. 51/ POJK.03/2017 raised the ESG requirements for financial services providers and listed companies from 2019 and 2020, respectively. Meanwhile, the bourse's ESG leaders outperformed other indices from early 2017 to early 2021, underlining the potential for ESG to preserve and create value. Despite controversies over the possible loss of workers' rights, the Omnibus Law on Job Creation simplified labour laws. This aimed to create a more attractive investment environment and increase local opportunities. To this end, the introduction of the positive investment list reframed the conversation around foreign investment and opened 245 business lines to wholly foreign investment. PwC OBG ESG Report OXFORD BUSINESS GROUP Sources: ASEAN Briefing; Cekindo; IFC; IDX; Ministry of Investment; OJK; PwC; SSE Initiative 18
View entire presentation