Anticipating carbon exchange: Financial institutions race to absorb emissions

PT Amartha Mikro Fintek, in collaboration with Jejakin and Ikamat as well as stakeholder representatives of the Demak Regency Government, planted 1,000 mangrove seedlings in the waters of Morodemak Village, Bonang Subdistrict, Demak Regency, Thursday (10/8). (Hartatik)

Demak – Banking and non-banking financial institutions showed their serious commitment to reducing carbon emissions by planting 1,000 mangrove seedlings in the waters of Morodemak Village, Bonang Subdistrict, Demak Regency, Thursday, 10 August. The activity coincided with the National Nature Conservation Day (HKAN), celebrated every 10 August.

One of these financial institutions, PT Amartha Mikro Fintek (Amartha), a prosperity platform that provides inclusive financial services to the ultra-micro segment in rural areas, is collaborating with Jejakin. This technology company focuses on climate change issues.

Amartha’s Chief Risk and Sustainability, Aria Widyanto, said that this environmental action is part of the company’s commitment to improving resilience and sustainable balance for the environment and communities in coastal areas prone to abrasion, such as the Morodemak coast.

“This activity does not stop at planting mangroves but continues to empower communities in vulnerable areas to expand green financing products in the future,” said Widyanto.

This mangrove planting programme involves the role of individual lenders to adopt mangroves by funding MSMEs through Amartha. Amartha believes that every individual has the opportunity to play an active role in preserving the environment by planting mangroves.

Not just planting

Founder and CEO of Jejakin, Arfan Arlanda, said that mangrove planting activities carried out by companies are no longer limited to ceremonies. But now, they must monitor and report on the impact of the action.

“How many mangrove plants survive, how many carbon emissions are absorbed from the mangrove planting action must all be recorded as a sustainable report as instructed by the OJK (Financial Services Authority),” explained Arlanda.

OJK issued Regulation No 51/2017, in which all financial industries are required to make a sustainaibility report (SR), which contains three things: economic, environmental and social. If detailed in more detail, it consists of 17 items of achievement according to the SDGs, as mandated by Presidential Regulation No 59/2017. The report includes the calculation of greenhouse gas (GHG) emissions and emission reduction activities that have been carried out.

“Sustainable financial instruments are further enhanced by the carbon exchange trading system and mechanism released by OJK on 11 July and effective in September 2023,” he said.

Later, OJK, as the authority responsible for the operation of the carbon exchange, will organise the trading of carbon units, both mandatory and voluntary, as a carbon trading mechanism. The implementation of carbon trading is aimed at attracting green investment through carbon buying and selling transactions. The financial services sector also plays an important role in realising the green economy concept through efforts to maintain economic stability. (Hartatik)

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