IDX and CDP signed MOU to drive corporate environmental reporting

The Indonesia Stock Exchange (IDX), one of Southeast Asia’s leading exchanges, and CDP, an international non-profit that runs the global environmental disclosure system, signed a Memorandum of Understanding (MoU) to further stimulate the growth of Taskforce on Climate-related Financial Disclosures (TCFD)-aligned disclosure in Indonesia. The MoU was signed by Inarno Djajadi representing IDX and John Leung representing CDP in Jakarta, on Monday, 15 June 2022.

John Leung, Director South East Asia and Oceania of CDP, said: “We are delighted to be working with the Indonesia Stock Exchange through this important partnership. Supporting more companies in Indonesia to disclose their climate-related risks and opportunities will be crucial in bolstering the country’s economic resilience to the impacts of climate change, particularly as we know that Indonesia, and the Asia-Pacific region more widely, has pronounced vulnerability to climate risks. CDP looks forward to lending our two decades of insights, expertise, and data to this exciting work, driving more ambitious environmental action in a region that is already demonstrating impressive leadership.”

IDX and CDP are both supporters of the TCFD, and this partnership will allow both organizations to better understand the benefits of and necessity of environmental disclosure (environmental disclosure helps to drive action by informing decision making, providing accountability which incentivise further action, and helps track and monitor progress), and to overcome any potential barriers to comprehensive reporting. The resulting increase in the number and quality of environmental disclosures in Indonesia will allow stakeholders to better incorporate ESG data into their operational and investment decisions. Through this MoU we are targeting non-banking financial institutions, realizing there is a discrepancy awareness between banking and non-banking financial institutions.

Hasan Fawzi, Business Development Director of IDX for the period of 2018-2022 said: “This partnership with CDP demonstrates our strong commitment to ESG practices, sustainability, and transparency. Environmental disclosure is critical for boosting capital market resilience in Indonesia and wider economy. We are delighted to be working with CDP on this important issue.”

In order to achieve the shared goal of increasing the number and quality of corporate environmental reporting in Indonesia, IDX and CDP will collaborate to:

1. Provide capacity building to non-banking financial institutions, including investment managers, pension funds, and insurance companies on topics including climate risk management and setting and achieving net-zero targets, this will help to drive sustainable business practices through lending policies, and engage with companies they lend to and invest in.
2. Increase IDX’s visibility on the current state of environmental reporting among Indonesian listed companies with the provision of data disclosed through CDP; and
3. Build capacity among IDX staff on best practices in measuring and reporting climate-related information in order to facilitate IDX’s first climate disclosure through CDP’s disclosure platform

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About CDP

CDP is a global non-profit that runs the world’s environmental disclosure system for companies, cities, states and regions. Founded in 2000 and working with more than 680 financial institutions with over $130 trillion in assets, CDP pioneered using capital markets and corporate procurement to motivate companies to disclose their environmental impacts, and to reduce greenhouse gas emissions, safeguard water resources and protect forests. Over 14,000 organizations around the world disclosed data through CDP in 2021, including more than 13,000 companies worth over 64% of global market capitalization, and over 1,100 cities, states and regions. Fully TCFD aligned, CDP holds the largest environmental database in the world, and CDP scores are widely used to drive investment and procurement decisions towards a zero carbon, sustainable and resilient economy. CDP is a founding member of the Science Based Targets initiative, We Mean Business Coalition, The Investor Agenda and the Net Zero Asset Managers initiative. Visit cdp.net or follow us @CDP to find out more.

About IDX

IDX is the only securities exchanges in Indonesia with more than 780 listed companies and total market cap more than US$ 650 billion. IDX is a non-profit organization with the main function is to provide fair, orderly, and efficient capital market in Indonesia. IDX promotes sustainable capital market through various initiatives and works closely with all stakeholders to provide transparency and investor protection.