Indonesia could learn from New Zealand's success in developing a sustainable finance ecosystem that includes cross-sectoral collaboration and integration of indigenous values, in order to bolster its own approach to climate-resilient development and sustainability. By adopting a strategic model similar to New Zealand's Sustainable Finance Forum, Indonesia could strengthen its own sustainable finance ecosystem, encourage environmental stewardship, promote renewable energy investments and effectively address climate change.

As Indonesia grapples with the need for sustainable and climate-resilient development, sustainable finance is becoming increasingly critical. New Zealand’s work in developing a sustainable finance ecosystem offers valuable lessons, particularly in fostering an inclusive, cross-sectoral approach that Indonesia could benefit from considering.

New Zealand has positioned itself as a global leader in environmentally conscious financial practices. In January 2024, it amended the Climate Change Response Act 2002 to legally commit the country to carbon neutrality by 2050. The Act has spurred significant initiatives and investments that support sustainability, demonstrating serious commitment to addressing climate change.

New Zealand has also been praised for integrating Indigenous values into environmental governance. The Maori principles of kaitiakitanga (guardianship of the sky, the sea and the land) and mahi tahi (working together as one) align with global environmental, social and governance (ESG) criteria, fostering a holistic approach to sustainable finance. These principles resonate with Indonesia’s gotong royong (intense cooperation) and the Javanese philosophy of memayu hayuning bawana (maintaining the safety, peace, happiness and wellbeing of the world).

The Aotearoa Circle has been instrumental in New Zealand’s success. Founded in 2019, the Circle brings leaders from the public and private sectors together to participate in the Sustainable Finance Forum (SFF), which not only focuses on sustainable finance but also broader environmental objectives that align with the United Nations’ sustainable development goals. Unlike multilateral initiatives, New Zealand’s SFF is a national collaboration under the Aotearoa Circle, tailored to New Zealand’s sociocultural context.

SFF has developed the Roadmap for Action to guide both policy and practice towards sustainable outcomes. The roadmap outlines steps to strengthen New Zealand’s sustainable finance ecosystem, including risk management, capital allocation toward sustainable outcomes and transparency.

Meanwhile, Indonesia’s Financial Services Authority launched the Sustainable Finance Roadmap Phase II for 2021–25 in 2021. This phase builds on the earlier roadmap and aims to accelerate ESG implementation in the country through developing a green taxonomy, integrating ESG into risk management, creating green scheme narratives, innovating sustainable financial products and establishing a national communication strategy for sustainable finance.

But Indonesia needs a multi-stakeholder forum for sustainable finance like New Zealand, which prioritises underrepresented groups impacted by natural resource development, including Indigenous peoples and local community groups.

Incorporating Indigenous wisdom into Indonesia’s finance system could improve the integration of ESG criteria, emphasising social inclusivity and environmental stewardship. Both countries’ Indigenous perspectives stress intergenerational equity, relationship building and respect for natural resources, which could underpin Indonesia’s sustainability policies and help balance economic and environmental priorities.

The applicability of New Zealand’s sustainable finance approach to the Indonesian context may be more significant than that of a larger economy like the United States. New Zealand’s success lies in fostering deep cross-sectoral relationships, which reflects a governance style closer to Indonesia’s collectivist cultural values. This approach contrasts with the United States’ more market-driven model and provides Indonesia with a culturally resonant example of unifying diverse sectors under a sustainable finance agenda.

While New Zealand’s climate adaptation strategy faces gaps in knowledge and lacks tools essential for effective implementation — including managing uncertainty, transitioning from reactive to proactive adaptation and integrating Indigenous ethics and Maori indicators — New Zealand has cultivated a robust sustainable finance ecosystem partly due to the prominence of SFF, which convenes stakeholders across sectors to prioritise ESG, climate resilience and sustainable finance education.

The SFF Roadmap for Action exemplifies the value of having a clear strategy backed by cross-sectoral support, which Indonesia could consider in its Sustainable Finance Roadmap Phase III (2026–30). By borrowing from New Zealand,Indonesia could develop similar programs and collaborative groups that foster transparency, stakeholder trust and ESG-centred finance in partnership with banks, insurers, civil society organisations and Indigenous communities. This would enable them to find leverage points through existing regulatory, financial and institutional innovations and would open opportunities for enhancing Indonesia’s sustainable finance ecosystem.

As in New Zealand, where kaitiakitanga values are a powerful enabler of climate adaptation, aligning local wisdom like memayu hayuning bawana on environmental stewardship with ESG principles could enhance public legitimacy and drive renewable energy investments.

To further expand New Zealand’s impact, there could be opportunities for it to introduce sustainable finance principles within the ASEAN-New Zealand Strategic Partnership. This platform would allow for cooperation and shared best practices, potentially guiding ASEAN members toward adopting comprehensive sustainable finance policies.

New Zealand’s journey provides a compelling example, particularly in promoting stakeholder inclusion, Indigenous wisdom and cultural resonance within sustainable finance. By adapting SFF’s model, Indonesia can further strengthen its sustainable finance ecosystem, address climate change and advance sustainable development.

Irvan Tengku Harja is a Project Manager and a Researcher at The Habibie Center in Jakarta, Indonesia. https://doi.org/10.59425/eabc.1732917600

Sumber link : https://eastasiaforum.org/2024/11/29/looking-to-new-zealand-to-enhance-indonesias-sustainable-finance-ecosystem/