• Ensuring the availability of sustainable financing for MSME and non-MSME customers, including for environmentally sound business activities.
• Improving internal competencies and skills to implement sustainable finance at BCA.
• Integrating the aspects of ESG in the Bank’s operations.
SUSTAINABLE FINANCE
Principles of Sustainable Finance BCA Approach
a. The principle of responsible investment
BCA provides financial products and services for business activities that are environmentally sound and inclusive through corporate financing and MSMEs.
b. The principle of strategy and sustainable business practice
BCA’s business strategy has been aligned with long-term sustainability through its vision of becoming a reliable first choice bank for the community, acting as an important pillar of the Indonesian economy. The business development strategy includes the development of financial products and services, including development financing and inclusive financial services.
Sustainable business practices have been implemented with Go Green in several Bank’s offices and applying aspects of ESG as a pre-requisite for conducting credit assessments with customers.
The development of the Bakti BCA social responsibility program is directed toward a long-term program that utilizes BCA’s core competencies so it can improve the economic independence of the community.
c. The principle of managing social risks and living environment
BCA ensures that social risks and the living environment are managed in accordance with laws and regulations through evaluations made to debtors.
d. The principle of governance Aspects of social and living environment are integrated into BCA’s governance by adjusting relevant personnel policies, procedures, duties and responsibilities.
e. The principle of informative communication
Communication with stakeholders is performed through various media platforms, including publishing sustainability reports since 2015.
f. The principle of inclusivity BCA provides inclusive financial products and services, among utilizing digital technology to reach more people in remote areas with Laku BCA, Sakuku, DUITT and SimPel products. Credit facilities for the lower socio- economic segment are provided through the people’s business credit (KUR) program and MSME loans.
g. The principle of developing superior priority sectors
The significant portion of financing over the past three years is in line with the development demands implemented by the government, which are financing infrastructure including roads, railroads, and electricity.
h. The principle of coordination and collaboration
In order to implement efforts to achieve Sustainable Development Goals effectively and on target, BCA, with government coordination, is involved in SDG Indonesia One and Indonesia’s sustainable financial initiatives.
Process
The Bank includes ESG factors in making credit proposals and analyzes credit risk ratings to determine the credit worthiness of debtors. Credit funding is also a priority for BCA in developing environmentally friendly products and services that meet international standards.
Based on credit procedures, BCA implements ESG risk management in the credit cycle, from worthiness analysis to monitoring performed throughout the financing. ESG risk for financing primarily impacts the operational and reputation risk of the Bank. As a follow up, the related unit will implement risk mitigation in accordance with the Basic Risk Management Policy.
SUSTAINABLE FINANCE
Aside from implementing ESG risk in banking products, the Bank manages the operational activities of the environmental and social aspects by encouraging all BCA employees and management to apply the principles of Reuse, Reduce, and Recycle in performing our daily operational activities.
Human Resources
BCA has established a special working group to prepare and implement sustainable finance effectively involving related units, including the Business Work Unit, Credit Risk Analysis Unit, Risk Management Work Unit, Corporate Secretary Unit and Compliance Work Unit.
At this time, BCA has reviewed the sustainable financial implementation of existing organizations and made adjustments to the required job descriptions.
370 People
have followed sustainable financial training
The process of integrating ESG factors and principles of sustainable finance into BCA’s business was started in 2013, by developing the internal capacity to related units and branch offices through training regarding sustainable finance, and reviewing and drafting internal policies that will be used for the implementation of sustainable finance.
The Bank includes employees from units related to credit distribution, supervision, planning, and risk management in training and capacity building activities.
The training was organized by the Financial Services Authority (OJK), WWF-Indonesia, the First Movers on Sustainable Banking 2015-2017 program, and the Indonesian Sustainable Financial Initiative. Since 2017
the Bank has been conducting independent in-house training for more employees.
As of 2018, 370 employees of the Bank have taken formal training regarding sustainable finance, which was held both internally and externally.
Sustainable Financial Products
BCA is committed to increasing the financing portion of environmental-based business activities (KUBL) and in the micro, small and medium-sized enterprises (MSME) sector in the long term. The Bank is targeting the growth of the sustainable financing portfolio equal to overall credit growth.
Based on POJK-51 in 2017, what is categorized as sustainable financing by BCA is a financing product or KUBL loan for the corporate and commercial segment, and financing for the MSME segment. The activities financed are those that have an impact on climate change adaptation or mitigation, which includes:
renewable energy products, energy efficiency, and organic agriculture, in line with business growth and related business credit worthiness.
Portfolio
Every year, the Bank’s portfolio for sustainable financing products always increases. Included in this portfolio is financing for the plantation sector that has been certified as sustainable. In the 2018 period there are 47 customers who implement and are certified by Indonesia’s Sustainable Palm Oil (ISPO) and/or the Rountable on Sustainable Palm Oil (RSPO), while any wood processing company must have the Forest Stewardship Council (FSC) certification.