Enhancing Sustainable Finance Governance: The Role of the Sustainable Finance Committee in Policy Harmonisation and Cross-Institutional Coherence

This white paper proposes a governance framework for Indonesia's Sustainable Finance Committee (SFC) to align fiscal, monetary, and regulatory policies. It aims to mobilize USD 285 billion in investment by 2030 to meet ENDC targets, suggesting a three-tier institutional structure and the use of sectoral coalitions to create bankable green projects.

• Indonesia requires an estimated investment of USD 285 billion (IDR 3,990 trillion) between 2020 and 2030 to meet its Enhanced Nationally Determined Contributions (ENDC) targets, which aim to reduce greenhouse gas emissions by up to 43.2% by 2030 with international support.
• The Sustainable Finance Committee (SFC), established under Law No. 4/2023, is a high-level policy coordination platform chaired by the Minister of Finance and including the Governor of Bank Indonesia and the Chairman of the OJK Commissioner as permanent members.
• The SFC is proposed to operate under a three-tier governance structure: a Core Body (Ministry of Finance, Bank Indonesia, and OJK), a technically equipped Secretariat housed within the Ministry of Finance, and specialized Thematic Working Groups.
• The SFC has five primary responsibilities: mobilizing sustainable finance at scale, enhancing policy coherence, strengthening multi-level governance (national to subnational), promoting inclusive stakeholder engagement, and managing climate-related financial risks.
• To avoid the SFC becoming a symbolic rather than structural entity, the report recommends the issuance of a Government Regulation (Peraturan Pemerintah) to define its authority, institutional roles, and decision-making protocols.
• The report proposes a Sectoral Coalition Framework to co-create bankable financial solutions by bringing together policymakers, investors, corporates, and civil society to address specific transition barriers in priority sectors.
• Climate-vulnerable countries, including Indonesia, faced an estimated USD 62 billion in additional borrowing costs between 2008 and 2018 due to elevated climate risk perceptions.
• The SFC is tasked with overseeing the development and application of a national sustainable finance taxonomy, evolving it from a regulator-led tool (OJK) to a whole-of-economy reference framework.
• The report suggests a common data platform to integrate fragmented reporting systems, such as the SRN-PPI registry and green budget tagging, to improve market transparency and policy efficiency.
• The SFC's coordination mechanisms are divided into 'Regular Coordination' for strategic oversight and 'Ad-Hoc Coordination' for rapid responses to climate-related financial shocks or urgent policy shifts.
• The report emphasizes the need for vertical coordination to bridge the gap between national mandates and subnational implementation, proposing tools like climate performance-based intergovernmental fiscal transfers.

APA

Ismalina, P., Horner, S., Larasati, L., Siagian, A. P., & Solagratia, H. (2025). Enhancing Sustainable Finance Governance: The Role of the Sustainable Finance Committee in Policy Harmonisation and Cross-Institutional Coherence. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/12/SFC-Whitepaper-English-Indonesian.pdf

Chicago

Ismalina, Poppy, Simon Horner, Luthfyana Larasati, Albertus P. Siagian, and Hari Solagratia. Enhancing Sustainable Finance Governance: The Role of the Sustainable Finance Committee in Policy Harmonisation and Cross-Institutional Coherence. Climate Policy Initiative, 2025. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/12/SFC-Whitepaper-English-Indonesian.pdf.

Wikipedia

{{cite report |last1=Ismalina |first1=Poppy |last2=Horner |first2=Simon |last3=Larasati |first3=Luthfyana |last4=Siagian |first4=Albertus P. |last5=Solagratia |first5=Hari |title=Enhancing Sustainable Finance Governance: The Role of the Sustainable Finance Committee in Policy Harmonisation and Cross-Institutional Coherence |publisher=Climate Policy Initiative |date=June 2025 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2025/12/SFC-Whitepaper-English-Indonesian.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ismalina2025enhancing, author = {Ismalina, Poppy and Horner, Simon and Larasati, Luthfyana and Siagian, Albertus P. and Solagratia, Hari}, title = {{Enhancing Sustainable Finance Governance: The Role of the Sustainable Finance Committee in Policy Harmonisation and Cross-Institutional Coherence}}, institution = {Climate Policy Initiative}, year = {2025}, month = jun, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2025/12/SFC-Whitepaper-English-Indonesian.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }