Sustainable Finance: Implication of top-down policy in the banking sector

Abstract

Indonesia has launched a regulation that requires public companies to implement social and environmental programs as part of their commitment to sustainable development. One of the regulations released by the financial service authority is POJK No. 51/ 2017, which requires all financial services organisations to implement sustainable finance. This study aims to analyse how the banking sector implements sustainable finance, as their commitment through social and environmental programs mostly known as corporate social responsibility (CSR). This research uses a qualitative method with a case study approach on one Indonesian bank (namely DAMO Bank), which has many branches and offices throughout Indonesia. Most data was collected from interviews with management and staff in the branch office. This study also uses the bank's sustainability report and some internal documents to enrich the data analysis. The result of this study shows that there is the implication of the policy taken by the head office bank regarding the sustainability program that creates low understanding and interest regarding sustainability finance in the branch office of DAMO Bank.