Green Banking for Environmental Management: A Sustainable Paradigm Shift

Abstract

This study aims to determine the extent to which bankss (banks) in Indonesia implement green economy policies based on current regulations and how bank has played a role in implementing it in its banking activities. The urgency of this research is based on the worsening environmental conditions caused by climate change and extreme global warming. Financial Services Authority Regulation (FSAR) Number 51/POJK.03 of 2017 is deemed a rule that only regulates the course of green economy policies in financial institutions and has not specifically regulated green banking. This study employed qualitative methods with normative data collection using secondary data. This research's results revealed that the banking activities carried out by Banks have complied with the applicable rules, as evidenced by the annual sustainability report. Nevertheless, the report issued by Banks has not been fully included in the financial reports requested by the FSA, thus it is a separate report from the financial reports required by the FSA and the report called sustainability report. It is considered that the green banking and SDG policies have not been implemented optimally since they are only in the form of an appeal, and there are no sanctions for violators. Therefore, they only have insignificant effect on environmental improvement.