Indonesia

Yes, ESG disclosures are mandatory for primarily publicly listed companies and financial institutions.

1. Financial Services Authority (Otoritas Jasa Keuangan or OJK) Regulation No. 51/POJK.03/2017 of 2017 regarding the Implementation of Sustainable Finance for Financial Service Institutions, Issuers (Emiten), and Public Companies (dated 27 July 2017) (OJK Reg. 51/2017). This regulation imposes obligations on financial service institutions, issuers and public companies to implement sustainable finance principles and to submit a Sustainability Report, either as part of their annual report or as a standalone report, annually to the OJK and to make the report publicly accessible.^[1]
2. OJK Circular Letter No. 16/SEOJK.04/2021 regarding the Form and Substance of the Annual Report of Issuers (Emiten) and Public Companies (dated 29 June 2021) (OJK CL 16/2021). OJK CL 16/2021 governs the form and content of ESG disclosures in the annual reports of publicly listed companies and issuers. Disclosures include:
   
   (i) a list of industry associations (national or international) related to the implementation of sustainable finance;^[2] and
   
   (ii) the actions taken by the company as part of its social and environmental responsibility. This disclosure shall form the Sustainability Report as per OJK Reg. 51/2017. The relevant explanations must at least include:
   
   • the company’s sustainability strategy;
   
   • a summary of the company’s sustainability efforts (economic, social, and environmental);
   
   • Board of Directors’ remarks;
   
   • sustainable governance;
   
   • sustainable performance;
   
   • written verification by independent party(ies), if any;
   
   • feedback from readers, if any; and
   
   • response of the publicly listed company to the feedback from the previous year’s report.
3. OJK Regulation No. 17 of 2023 regarding the Implementation of Governance for General Banks (dated 14 September 2023) (OJK Reg. 17/2023) mandates that banks must prepare and publish a sustainability report guided by OJK Reg. 51/2017.^[3]
4. The Minister of State-Owned Enterprises (MSOE) Regulation No. PER-2/MBU/03/2023 of 2023 regarding Guidelines for the Organisation and Significant Corporate Activities of State-Owned Enterprises (dated 24 March 2023) (MSOE Reg. 2/2023). State-owned enterprises are required to prepare reports on a quarterly and annual basis through their Board of Directors containing, among other information, reports on the implementation of their social and environmental programmes.^[4] These reports must also be made accessible to the public.^[5] A sustainability report may be voluntarily included as part of the annual report.^[6]
5. Law No. 40 of 2007 regarding Limited Liability Companies (dated 16 August 2007), as last amended by Law 6 of 2023 regarding the Stipulation of Government Regulation in Lieu of Law No. 2 of 2022 regarding Job Creation into Law (dated 31 March 2023) (Law No. 40/2007). This law requires limited liability companies to include a disclosure on the fulfilment of social and environmental responsibilities in their annual reports.^[7] Further details governing such responsibilities are set out under Government Regulation No. 47 of 2012 regarding the Social and Environmental Responsibilities of Limited Liability Companies (dated 4 April 2012).

The disclosure requirements in the regulations mentioned above are mandatory, with the exception of the sustainability report referred to in MSOE Reg. 2/2023.

Overall, the requirements cover economic, environmental, social and governance aspects.

Indonesia’s current disclosure requirements are not based on international standards. However:

1. reference to international standards is possible when preparing Sustainability Reports pursuant to OJK Reg. 51/2017 and OJK CL 16/2021 and certain sections are to be disclosed with reference to the 17 UN Sustainable Development Goals; and^[1]
2. OJK is currently preparing amendments to OJK Reg. 51/2017 to align Indonesia’s sustainability reporting framework with General Requirements for Disclosure of Sustainability-related Financial Information (PSPK 1) and Statement of Sustainability Disclosure Standards 2 on Climate-related Disclosures (PSPK 2), which are substantially aligned with IFRS S1 and IFRS S2. The Draft OJK Regulation 2026 (RPOJK 2026) entered public consultation in February 2026 which has since concluded.^[2] See section A.11 below for more detail on the implementation of PSPK 1 and PSPK 2.

The disclosures contained in Sustainability Reports prepared pursuant to OJK Reg. 51/2017 and OJK CL 16/2021 adopt a double materiality approach.^[1] However, no explicit guidance is provided in MSOE Reg. 2/2023 regarding the particular approach to be applied to state-owned enterprises.

Yes.

Sustainability reports

A Sustainability Report prepared pursuant to OJK Reg. 51/2017 and OJK CL 16/2021 must disclose the amount of emissions produced by financial institutions, issuers and public companies through their business activities directly related to the environment.^[1] Such entities must also disclose limited categories of Scopes 1, 2 and 3 GHG emissions: Scope 1 (regarding consumption of fuel), Scope 2 (regarding usage of electricity) and Scope 3 (regarding official travel by flight) emissions.^[2] While no specific methodology was designated for these disclosures, international standards may be employed and identified in the Sustainability Report.^[3]

Once implemented, RPOJK 2026 would expressly require financial sector entities, issuers and public companies to calculate and disclose information on GHG emissions, including Scope 1, Scope 2 and Scope 3 emissions, under a phased approach.^[4] During the first three years of reporting, entities would not be required to disclose Scope 3 emissions and would be permitted to use alternative methodologies, other than the GHG Protocol, to measure GHG emissions.^[5] At the end of the three-year transition, a review will be conducted to determine whether disclosure of Scope 3 emissions will be mandated.^[6] The draft regulation would also allow emissions data to be obtained through direct measurement and/or estimation.^[7] To date, it has not been indicated if the IFRS S2 December 2025 Amendments (which eased Scope 3 reporting for the financial sector) will be incorporated.

Centralised systems

The following regulations require emissions data to be reported to centralised governmental systems:

1. Ministry of Environment and Forestry (MOEF) Regulation No. 13 of 2021 regarding the Continuous Industrial Emission Monitoring Information System - requires all businesses or activities mandated to monitor their emissions using the Continuous Emissions Monitoring System (CEMS) to integrate their data into the Information on Continuous Industrial Emission Monitoring System (SISPEK).
   
   Ten industries are required to use SISPEK, namely: iron and steel smelting, pulp and paper, synthetic fibre (rayon), carbon black, oil and gas, mining, thermal waste treatment, cement, thermal power generation, and fertiliser and ammonium nitrate. These industries are further regulated by sectoral regulations.
2. Presidential Regulation No. 110 of 2025 regarding the Implementation of Carbon Economic Value Instruments and National Greenhouse Gas Emissions Control (dated 10 October 2025) (PR 110/2025) - requires business actors, regents/mayors, governors and relevant ministries to report on corporate, sectoral, regency/city and provincial GHG emissions for the purposes of inventorying GHG emissions in the context of implementing climate change mitigation acts to achieve Indonesia’s targeted NDCs.^[8]

In this vein, the relevant measurements, especially with regard to reductions in GHG emissions, should meet with the customary standards of the UN Framework Convention on Climate Change or the Intergovernmental Panel on Climate Change.^[9]

Independent assurance of ESG disclosures is encouraged but not mandatory. If independent verification of a Sustainability Report is obtained, relevant details should be disclosed pursuant to OJK Reg. 51/2017 and OJK CL 16/2021.

However, once implemented, RPOJK 2026 would phase in requirements for financial sector entities, issuers and public companies in Groups 1, 2 and 3 (as outlined in section A.11 below) to obtain independent verification of their Sustainability Reports by an independent third party.^[1]

A few notable companies in various sectors (such as drinking water and nutrition) have issued sustainability reports even though it is not mandatory for them.

Yes. Indonesia introduced a voluntary Taxonomy of Sustainable Finance aimed at supporting Indonesia's Sustainable Development Goals, covering economic, environmental, and social aspects. The taxonomy serves as a guide to enhance capital allocation and sustainable financing, thereby supporting Indonesia's goal of achieving net-zero emissions by 2060.

The taxonomy was developed for the following sectors outlined in Indonesia's Enhanced NDCs document: (a) energy; (b) construction and real estate; (c) transportation and storage; (d) agriculture, forestry, and fishing; (e) manufacturing; (f) water supply, sewerage, waste management, and remediation; (g) information and communication; and (h) professional, scientific, and technical activities.

Yes. The Indonesian Sustainability Standards Board, under the Institute of Indonesia Chartered Accountants (Ikatan Akuntan Indonesia) (DSK IAI), adopted both IFRS S1 and IFRS S2 through the approval of the Exposure Draft of the Sustainability Disclosure Standards (SPK) on 17 December 2024, which were finalised and issued on 1 July 2025.^[1] The SPK consists of PSPK 1 and PSPK 2, which are substantially aligned with IFRS S1 and IFRS S2, respectively, with slight modifications.^[2] These adjustments mainly concern the effective date of the provisions, transitional provisions, and clarifications on reporting timelines and the voluntary nature of Scope 3 emissions disclosures.^[3]

To support implementation, a Sustainability Disclosure Standards Roadmap was developed to outline a phased adoption approach and to build the necessary ecosystem for full compliance, including plans to update the current regulatory framework – which relies on OJK Reg. 51/2017 – to mandate the SPK by 2027.^[4] As noted in section A.5(b) above, the legislative update is in progress, with the OJK preparing the relevant amendments to incorporate PSPK 1 and PSPK 2.

The enhanced mandatory sustainability disclosures are proposed to come into effect on 1 January 2027, with an option for early voluntary adoption, and be phased in over a three-year transition period for financial sector business actors (PUSK), issuers^[5] and public companies.^[6] Under the current draft regulation, it is envisaged that:

1. PUSK, issuers and public companies must report their sustainability performance through a Sustainability Report, which is required to be submitted to the OJK and made publicly available on an annual basis. PUSK that are financial services institutions must also submit a Sustainable Finance Action Plan to the OJK annually, but this is not required to be made publicly available.
2. The Sustainability Report must be prepared based on sustainability disclosure standards under Article 5(1)(a) and by reference to other required sustainability aspects. Although the current draft regulation does not expressly specify the ISSB-aligned PSPK 1 and PSPK 2 as the disclosure standards, the OJK has indicated its intention to align with these standards and the draft regulation refers to standards that cover the four pillars of sustainability governance, sustainability strategy, sustainability-related risk management, and metrics and targets.
3. Reporting entities must also establish a transition plan to manage the impacts of sustainability-related risks and opportunities and achieve sustainability targets. For PUSK that are Financial Services Institutions, the transition plan must be included in the Sustainable Finance Action Plan and disclosed in the Sustainability Report. Other PUSK, issuers and public companies must disclose the transition plan in the Sustainability Report. The detailed reporting format will be prescribed by an OJK Board of Commissioners Regulation.
4. The requirements under Article 5(1)(a) will be phased in as follows:^[7]
   
   i. Group 1 – 2027 reporting period: banks within KBMI 3 and KBMI 4, branches of foreign banks (KCBLN), the Stock Exchange, and issuers or public companies listed on the Main Board or New Economy Board;
   
   ii. Group 2 – 2028 reporting period: banks within KBMI 1 and KBMI 2, issuers listed on the Development Board, and issuers of debt securities or sukuk (EBUS); and
   
   iii. Group 3 – 2030 reporting period: issuers listed on the Special Monitoring Board, BPJS Health and BPJS Employment, and other specified financial sector entities, including insurance companies, pension funds and financing companies, with total assets of at least IDR 5 trillion.

Groups 2 and 3 may voluntarily apply Article 5(1)(a) earlier. For PUSK that are also issuers or public companies, the earlier applicable implementation date will apply.

As the relevant OJK regulation remains in draft form, details may be subject to change before the regulation is finalised.

With respect to the adoption or incorporation of other international ESG reporting frameworks, there are currently no official plans by the Indonesian government to do so. Although there is no regulation mandating the adoption of the TNFD framework in Indonesia, the State Electricity Company (PT PLN) has voluntarily adopted the TNFD framework since December 2024.

Following the SPK’s implementation expected in 2027, the DSK IAI will conduct a post-implementation review from 2027 to 2029. This review will assess the state of the sustainability reporting ecosystem, particularly in relation to non-climate disclosures. The results of this review, alongside developments in the ISSB Standards, will guide future decisions on the scope and direction of sustainability reporting under the SPK.^[1]

Yes, Indonesia has set targets to reduce carbon emissions by 31.89% (unconditionally) and by 43.2% (conditionally), which were included in Indonesia’s Enhanced NDCs Document that is to be aligned with the Long-Term Low Carbon and Climate Resilience Strategy 2050 with a vision to achieve net-zero emissions by 2060. While the targets are set out in the NDCs Document, the implementation framework for achieving the NDC is embedded in PR 110/2025. PR 110/2025 provides the legal framework for, among other things, carbon allocation, NDC formulation and implementation, carbon economic value instruments, transparency mechanisms, monitoring and evaluation, and governance arrangements.

PR 110/2025 provides that NDC implementation is carried out through climate change mitigation and climate change adaptation. These strategies include:^[1]

1. development of ownership and commitment;
2. capacity building;
3. creation of enabling conditions;
4. formulation of a framework and communication network;
5. policy for a single inventory of GHG and climate resilience data;
6. formulation of policies, plans, and programmes;
7. development of NDC implementation guidelines;
8. implementation of the NDCs; and
9. monitoring and review of the NDCs.

PR 110/2025 also requires the NDC strategies to be further detailed in an NDC roadmap, which must at least include baseline details, target details, mitigation and adaptation scenarios, governance, funding needs and sources, technology, and capacity building. ^[2] In addition, mitigation is to be implemented across sectors and sub-sectors.^[3] The relevant sectors include energy, waste, industrial processes and product use, agriculture, forestry, and marine and fisheries.

Energy

For the energy sector, particularly the electricity sector, Indonesia has adopted a sectoral transition roadmap. PR 112 of 2022 regarding the Acceleration of Renewable Energy Development for the Supply of Electrical Power (dated 13 September 2022) (PR 112/2022) requires the MEMR to prepare a roadmap for the accelerated retirement of coal-fired power plants, including plans to reduce GHG emissions from such plants and strategies for accelerating the end of their operational periods. This is further implemented through MEMR Regulation No. 10 of 2025 on the Roadmap for Energy Transition in the Electricity Sector (MEMR Regulation No 10/2025), which aims to support the achievement of net-zero emissions through the transition from non-renewable energy to new and renewable energy. The roadmap includes, among other things, biomass co-firing, dedieselization, gasification, retrofitting fossil-fuel power plants with low-carbon technologies, expansion of new and renewable energy and nuclear power development. It also restricts the development of new coal-fired power plants and provides a framework for the accelerated retirement of existing coal-fired power plants, based on technical, environmental, economic, grid reliability, tariff, funding, technology, and just transition considerations.

Waste

The Ministry of Environment and Forestry launched the Zero Waste Zero Emission 2050 operational plan in 2024, which sets out a strategic approach for the waste sector to achieve zero waste by 2040 and zero or near-zero emissions by 2050. The plan projects waste sector emissions to peak in 2030 at approximately 217 million tCO₂e, before declining to approximately 62 million tCO₂e by 2050 and 9 million tCO₂e by 2060.^[4]

In addition, Presidential Regulation No. 109 of 2025 introduces a revised framework for accelerating waste-to-energy development as part of Indonesia’s broader waste management and decarbonisation agenda. The regulation centralises the selection of waste-to-energy developers, removes the obligation for regional governments to pay tipping fees, provides for electricity tariffs of up to USD 0.20 per kWh, and requires regional governments to make project land available free of charge for up to 30 years. The programme has since progressed into the implementation stage, including projects in Greater Denpasar, Bekasi City and Greater Bogor, which have been designated as National Strategic Projects, as well as the execution of initial project agreements for the Bali project.^[5]

Industry

The Ministry of Industry (MOI) is preparing an Industrial Decarbonisation Roadmap, which targets net-zero emissions for the industrial sector by 2050.[6] The roadmap covers nine energy-intensive industrial sub-sectors, namely cement, metals, fertilisers, chemicals, pulp and paper, textiles, glass and ceramics, automotive, and food and beverages. Based on available information, the roadmap projects emissions reductions of approximately 66.5 million tCO₂e by 2035 and 289.7 million tCO₂e by 2050, using strategies such as energy and material efficiency, fuel and material switching, electrification and low-carbon power, process upgrades, and CCUS. The roadmap is expected to be implemented through MOI regulations to be issued gradually for each sub-sector.

Forestry

Indonesia has adopted the FOLU Net Sink 2030 policy, which aims to support the achievement of Indonesia’s NDC through a carbon net sink approach in the forestry and other land use sector by 2030.[7] The policy refers to the NDC Mitigation Roadmap and the Long-Term Strategy on Low Carbon and Climate Resilience 2050, and covers measures including reducing deforestation and forest degradation, developing plantation forests, sustainable forest management, social forestry, forest rehabilitation, peat restoration and water management, mangrove rehabilitation and conservation, biodiversity conservation, and strengthening monitoring, evaluation and public communication.

Marine and Fisheries

Indonesia has prepared the National Action Plan for the Protection and Management of Blue Carbon Ecosystems 2025–2030, which focuses on mangrove and seagrass ecosystems. The action plan seeks to support climate mitigation and adaptation through blue carbon management. Its key measures include expanding marine protected areas to 32.5 million hectares by 2030, strengthening coastal ecosystem zoning, rehabilitating mangroves and seagrass ecosystems, preparing modalities for integrating blue carbon into the NDC and carbon economic value framework, developing GHG inventory and MRV systems for blue carbon, and supporting blue economy and climate-resilient coastal development. Separately, the Roadmap for Climate Change Mitigation in the Marine and Fisheries Sector under Minister of Maritime Affairs and Fisheries Decree No. 52 of 2024 regarding the Roadmap for Climate Change Mitigation in the Maritime Affairs and Fisheries Sector (dated 28 July 2024) addresses direct emission reductions from sectoral activities such as capture fisheries, aquaculture, and fish processing.

Yes. Indonesia has adopted mandatory carbon pricing mechanisms, principally through a compliance carbon trading scheme for the power generation sector. Indonesia is planning a carbon tax, but there is currently no plan to introduce a domestic carbon border adjustment mechanism.

Compliance carbon market

The compliance carbon market was launched in 2023 and is being implemented in three phases.^[1] The first phase (originally 2023-2024) is limited to coal-fired power plants (PLTUs) connected to PT PLN’s grid.^[2] This phase is currently ongoing, while the implementation of subsequent phases has been delayed.^[3] It covered 99 coal-fired PLTUs in 2023, with an additional 47 PLTUs included in 2024, bringing the total number of covered PLTUs in this phase to 146.^[4] However, no sales have been conducted to date during this phase.^[5]

MEMR Decree No. 14.K/TL.04/MEM.L/2023 sets out the technical approval for emissions ceilings (PTBAE) applicable for the coal-fired PLTUs included in the first phase.^[6]

The second phase (originally planned for 2025-2027) and the third phase (originally planned for 2028-2030) will expand coverage to include oil- and gas-fired PLTUs, as well as coal-fired PLTUs not connected to PT PLN’s grid.^[7] The PTBAE for the second and third phases has not yet been determined,^[8] despite a deadline of 31 December 2024 provided by the regulation, but is expected to be more stringent than that of the first phase.^[9] However, several policy and regulatory issues have delayed its effective implementation.^[10]

The legal basis for implementing a cross-sectoral ETS in Indonesia, including detailed roadmaps and procedures, is provided under Ministry of Energy and Mineral Resources (MEMR) Regulation No. 16 of 2022 regarding Guidelines for the Implementation of Carbon Economic Value in the Power Plant Sub-Sector (dated 27 December 2022).^[11]

In parallel, the recent enactment of Ministry of Forestry Regulation No. 6 of 2026 (dated 13 April 2026) provides a sector-specific framework for carbon trading through GHG emission offsets in the forestry sector. The regulation implements PR 110/2025 and sets out, among other things, the relevant responsible parties, carbon units, MRV, validation and verification requirements, ministerial authorization and corresponding adjustment requirements for international carbon trading, ESG and community safeguards, and applicable non-tax state revenue (PNBP) obligations for forestry carbon transactions.

Voluntary carbon market

Further progress has also been made in the development of voluntary carbon trading markets. OJK Reg. 14/2023 as amended by OJK Reg. 10/2026 provides the basic legal framework for carbon trading through the Indonesia Carbon Exchange (IDX Carbon), which launched in September 2023 for the trading of domestic voluntary carbon credits and potentially international voluntary carbon credits. The OJK has issued a carbon exchange licence to the Indonesia Stock Exchange. Outside of IDX Carbon, carbon trading can be conducted by direct trade, with the requirement that any direct trade must be recorded in the National Climate Change Control Registry System (SRN PPI).^[12] Following the issuance of OJK Regulation No. 10 of 2026, which became effective on 6 July 2026, carbon units traded through carbon exchange operators must be recorded in the Carbon Unit Registry System (SRUK), which replaces the SRN PPI.^[13] The amended framework also expands the scope of tradable carbon units, provides for the trading of foreign carbon units that are not recorded in SRUK, requires carbon exchange operators to submit certain reports to the relevant ministries, applies relevant consumer and community protection principles to parties involved in carbon trading through carbon exchanges, and facilitates the trading of carbon units recorded in ministry-level electronic systems until SRUK becomes operational, for a maximum period of three months from the promulgation of OJK Reg. 10/2026.^[14]

Overseas carbon trading requires prior authorisation from the Ministry of Environment (MOE) only if the relevant carbon units are used for the fulfilment of another country’s NDC, international mitigation obligations, or other international obligations; overseas offset trading that is not used for such purposes does not require such authorisation.^[15]

Under the current Indonesian carbon trading framework, relevant stakeholders may acquire GHG emission offsets to meet their compliance obligations subject to the applicable registration, recommendation and/or approval requirements under PR 110/2025.^[16]

Proposed carbon tax

In 2021, the Indonesian Government issued Law No. 7 of 2021, regarding the Harmonisation of Tax Regulations (dated 29 October 2021), which sets out that a carbon tax will be imposed on carbon emissions that have a negative impact on the environment. The carbon tax rate is IDR 30 per kilogram of CO2 or equivalent to around US$1.85 per tCO2.

The implementation of the carbon tax will target industries with high carbon emissions, starting with coal-fired power plants, which was to begin in 2022, with the full imposition of the carbon tax in 2025. However, the imposition of the carbon tax for coal-fired power plants has been postponed several times.

As of July 2026, the Indonesian government has not issued any official announcement regarding the imposition of a carbon tax on coal-fired power plants. The full implementation of the carbon tax will be carried out in phases, in line with the readiness of the relevant sectors, taking into consideration, among other factors, economic conditions, industry preparedness, potential impacts, and scale.

There are regulations governing the requirements for companies to have in place and/or disclose aspects of climate-related transition plans:

1. PR 110/2025 obliges every business actor^[1] to record and report, among other things, its climate change mitigation and adaptation plans and actions. This report is to be recorded in the SRN PPI.^[2]
2. OJK Reg. 17/2023 obliges banks to apply good corporate governance in the context of managing climate-related risk.^[3] This obligation requires banks, among other entities, to maintain appropriate policies, procedures, and controls pertaining to the effective management of climate risks.^[4] No further guidance is provided in this regard.
   
   While not explicitly stated in the context of climate risk management, OJK Reg. 17/2023 does require banks to duly consider, implement, and integrate ESG values including through social enrichment of the community.^[5]
3. MEMR Decree No. 188.K/TL.03/MEM.L/2025 regarding the Ratification of the Electricity Supply Business Plan (RUPTL) of PT PLN from 2025 to 2034 (MEMR Decree No. 188/2025) applies to PT PLN (i.e. the State Electricity Company). This decree approves the RUPTL 2025–2034 which functions as the mandatory operational roadmap for PT PLN in the electricity sector. The RUPTL 2025–2034 includes electricity sector transition targets, including achieving a new and renewable energy mix of 34.3% by the end of 2034, constructing 42,569 MW of renewable energy power plants, and developing 10,256 MW of energy storage systems to support renewable energy integration. MEMR may impose administrative sanctions if PT PLN fails to implement the RUPTL 2025–2034, submit required reports, or comply with ministerial orders to amend or change the plan.

Please also refer to section A.11(c) above regarding the plans to require PUSK, issuers and public companies to establish and disclose a transition plan to manage the impacts of sustainability-related risks and opportunities and achieve sustainability targets, with the detailed reporting format to be prescribed by the OJK.

Yes, while OJK Reg. 51/2017 and OJK CL 16/2021 do not explicitly require the disclosure of climate-related targets, they oblige the disclosure of certain sustainability targets that were achieved in the past three years.^[1] PR 112/2022 establishes certain targets for PT PLN (i.e. the State Electricity Company) to meet, including prioritising the purchase of electricity from power plants utilising renewable energy.

The government has also outlined its commitment to energy efficiency through GR No. 33 of 2023 regarding Energy Conservation (dated 16 June 2023) which has been further implemented through several regulations issued by the MEMR setting out the technical requirements and implementation procedures. The regulations require various stakeholders – including governmental bodies and private entities such as energy producers and users – to implement energy conservation measures, which include, among other things, energy management, the use of energy-efficient technologies, regular energy audits, and compliance with energy efficiency standards, both upstream (primarily aimed at conserving energy resources) and downstream (focused on enhancing energy efficiency and conservation through energy-saving practices and the adoption of energy-efficient technologies), and in energy management.

Businesses in Indonesia are subject to limited mandatory circular-economy-related requirements, primarily under the waste management and producer responsibility framework. Law No. 18 of 2008 regarding Waste Management (dated 7 May 2008) requires producers to manage packaging and/or goods they produce that cannot, or are difficult to, naturally decompose. This obligation is further implemented under MOEF Regulation No. P75 of 2019 regarding the Roadmap for Waste Reduction by Producers (MOEF Reg. P75/2019), which mandates producers in key sectors (i.e. manufacturing (including food and beverages, consumer goods, and personal care products), food and beverages services, and retail) to prepare and implement a waste reduction roadmap for the period 2020-2029.^[1]

MOE is continuing the revision of MOEF Regulation No. P.75/2019, with the revised regulation reportedly targeted for completion in September 2026.^[2] The revision is intended to strengthen producers’ obligations to take back post-consumer packaging, expand participation in the waste reduction roadmap, and require all relevant companies to participate in the EPR scheme. MOE has also indicated that the revised regulation will introduce a Producer Responsibility Organisation mechanism to support post-consumer packaging collection, while encouraging producers to design packaging that is easier to collect and recycle. This follows continued implementation gaps, with only 26 companies reportedly having prepared waste reduction roadmaps, despite around 8,600 food and beverage companies operating in Indonesia. MOE is also reportedly identifying approximately 200 major companies controlling more than 70% of market share and engaging with foreign embassies to encourage compliance by foreign companies operating in Indonesia.

Indonesia has also incorporated circular economy principles into its regulatory landscape. Although not expressly defined or regulated under a single comprehensive framework, principles of the circular economy can be identified in various existing regulations. One such example is in MOEF Regulation No. P.75/2019, which addresses waste reduction by promoting limitations on waste generation, as well as encouraging recycling and reuse practices, which also applies to international businesses operating in Indonesia. Currently, based on Article 22 paragraph (3) MOEF Regulation No. P.75/2019, non-compliance with the aforementioned measures may trigger disincentives imposed by the government, in the form of public release of a performance evaluation reflecting poor performance on the company. However, there are presently no statutory sanctions applicable for such non-compliance.

Indonesia has launched its Circular Economy Roadmap and National Action Plan 2025–2045, which frames circular economy not merely as waste management, but as a systemic transition from a linear “take-use-dispose” model to an economic model that keeps resources in use and preserves their value for as long as possible.^[3] It focuses on five priority sectors, namely food, retail/plastic packaging, textiles, construction and electronics, which together represent a significant portion of Indonesia’s economy and employment. By 2030, implementation in these sectors is projected to reduce GHG emissions. The roadmap also identifies enabling conditions for implementation, including stronger cross-ministerial governance, financing mechanisms, fiscal and non-fiscal incentives, and improved data management. Its implementation is planned in phases up to 2045, beginning with foundation-strengthening during 2025–2029 and moving toward integrated circular business models by 2040–2045.

Indonesia currently does not have a mandatory, economy-wide corporate sustainability due diligence regime equivalent to the EU’s CSDDD, requiring companies to actively identify, prevent, mitigate and remediate environmental and human rights impacts across their value chains.

However, Indonesia has begun developing a policy and implementation framework that may serve as a foundation for future mandatory requirements. The key framework is Presidential Regulation No. 60 of 2023 regarding the National Strategy on Business and Human Rights (dated 26 September 2023) (PR 60/2023). PR 60/2023 encourages business actors to integrate human rights principles into their operations, including through human rights due diligence to identify, prevent and mitigate adverse impacts arising from business activities.

This framework is being operationalised through the PRISMA platform, a business and human rights risk assessment tool introduced by the MOHR.^[1] At present, PRISMA remains a voluntary self-assessment mechanism, although companies, including private companies, state-owned enterprises and regional government-owned enterprises, are encouraged to conduct assessments. The assessment covers a range of indicators relevant to sustainability due diligence, including labour policies, working conditions, trade unions, environmental impacts, agrarian and indigenous peoples’ rights, grievance mechanisms and supply chain management.

There are indications that Indonesia may move toward a more mandatory regime.^[2] Government statements and stakeholder discussions suggest that PRISMA is intended as an initial step toward more structured and comprehensive human rights due diligence. The government has also linked the framework to international market access and emerging global supply chain requirements, including due diligence expectations under foreign regulations.

In addition, against the backdrop of Indonesia’s OECD accession goals and US trade pressures, a regulation prohibiting the import of goods involving forced labour (Minister of Trade Regulation Number 9 of 2026) took effect on 15 April 2026.^[3] The primary obligation rests on importers to, amongst other things, provide supporting evidence to demonstrate the absence of forced labour in the production process if an investigation is initiated. Although this is a border enforcement measure and does not constitute a corporate sustainability due diligence regime, it is likely to encourage importers to enhance supply chain due diligence of imported products and retain relevant documentary evidence.

Indonesia has implemented a range of policy measures to promote sustainable finance and investment to mobilise capital and funding toward businesses’ sustainable and climate transition.

Sustainability Reporting

A key foundation of Indonesia’s sustainable finance policy is OJK Reg. 51/2017, which requires financial service institutions, issuers and public companies to integrate sustainable finance principles into their business activities, as discussed in Section A.2 above. The reporting obligation under OJK Reg. 51/2017 supports sustainable investment by allowing investors, regulators and the public to assess whether an institution is implementing sustainable finance principles.

Taxonomy and Climate Risk Management

Indonesia has also developed classification infrastructure through the Indonesia Taxonomy for Sustainable Finance (TKBI).^[1] The TKBI is intended to guide the allocation of capital and financing toward activities that support Indonesia’s Net Zero Emission objectives by providing criteria for determining whether an economic activity can be considered sustainable. The TKBI also provides Technical Screening Criteria for NDC-related sectors, including energy, manufacturing, agriculture, forestry, fishing, construction and transportation, allowing industries to identify whether their activities may qualify for sustainable financing.

In the banking sector, OJK has introduced climate risk tools to support the integration of climate considerations into banking supervision and financial decision-making. Climate Risk Management & Scenario Analysis (CRMS) provides banks with a framework for managing climate-related risks, including through governance, strategy, risk management and disclosure.^[2] It allows banks to assess the resilience of their business models and strategies against different climate scenarios over short-, medium- and long-term horizons. CRMS improves the comparability and transparency of climate risk assessment in the banking sector and supports more informed lending and investment decisions.

OJK has also introduced Climate Risk and Banking Resilience Assessment (CBRA) to assess the potential impact of climate risks on asset quality, profitability and capital across the banking industry.^[3] It also evaluates the adequacy of capital buffers to absorb shocks arising from both physical climate impacts and the economic transition to a low-carbon economy. CBRA also helps authorities and investors identify where capital may need to be redirected toward more sustainable activities.

Blended finance and energy transition funding

Ministry of Finance Regulation No. 103 of 2023 regarding the Provision of Fiscal Support through a Funding and Financing Framework for the Acceleration of Energy Transition in the Electricity Sector (dated 13 October 2023) establishes the Energy Transition Platform as a government-backed blended finance mechanism to mobilise public, private, domestic and international capital for Indonesia’s energy transition. The platform supports funding for transition projects that may be difficult to finance on purely commercial terms, including the early retirement of coal-fired power plants, early termination of power purchase agreements, renewable energy projects replacing retired coal capacity, and supporting grid infrastructure. It may also provide loans, other financing facilities, public-private partnership schemes, government support, guarantees and carbon unit monetisation, while requiring eligible renewable energy projects to be classified as green or yellow under the TKBI and to comply with ESG and technology credibility requirements.

Macroprudential incentives for sustainable lending

Bank Indonesia Regulation No. 9 of 2025 regarding the Macroprudential Liquidity Incentive Policy (dated 1 December 2025) provides macroprudential liquidity incentives in the form of a reduction in banks’ statutory reserve requirement for banks meeting the relevant criteria, including criteria relating to inclusive financing and sustainable activity financing. Under the regulation, sustainable activity financing includes environmentally friendly credit or financing, and Bank Indonesia may determine the applicable criteria based on, among others, the share of credit or financing provided by banks to certain sectors and other factors such as interest rates or profit-sharing percentages. Banks are required to submit reports on their credit or financing distribution commitment plans, and Bank Indonesia may conduct supervision and evaluation of banks receiving the incentives. If the data submitted by a bank is inaccurate, Bank Indonesia may recalculate the statutory reserve requirement and impose sanctions or require the return of incentives.

Sustainable capital market instruments

OJK Regulation No. 18 of 2023 regarding the Issuance and Requirements of Sustainability-Based Debt Securities and Sukuk (dated 10 October 2023) regulates the issuance of sustainability-themed debt securities and Sukuk, including green bonds and Sukuk, social bonds and Sukuk, sustainability bonds and Sukuk, sustainability-linked bonds and Sukuk, and Sukuk Wakaf (which is used in relation to the optimisation of waqf assets). The regulation also recognises sustainability-linked bonds and Sukuk. Issuers are required to obtain reviews from independent external review providers and submit annual reports on fund utilisation, environmental or social impact, and progress toward sustainability targets. If an activity no longer meets the applicable sustainable criteria, the issuer must prepare an action plan within the prescribed period, and if remediation fails, the instrument may lose its sustainable status, and investors may be entitled to request a buyback or receive compensation through an increased coupon rate.

Indonesia’s regulatory direction of travel indicates a continued move toward the operationalisation of its carbon economic value framework, with increasing focus on carbon market infrastructure, registry requirements, reporting and transition finance. This is reflected, among others, in the issuance of PR 110/2025, which amended the existing carbon economic value regulation, and OJK Reg. 10/2026, which amended OJK Reg. 14/2023 on carbon trading through carbon exchanges. These developments suggest that Indonesia is moving toward more detailed implementation rules for carbon trading and climate-related market mechanisms.

In parallel with these implementing-level developments, Indonesia is advancing the preparation of the Draft Law on Climate Change Management, which has been included in the 2026 Priority National Legislation Program. The draft remains under legislative process, and its date of enactment has not yet been determined. The Draft Law on Climate Change Management is intended to serve as an umbrella framework for climate change management in Indonesia, covering planning, control, monitoring and law enforcement. The draft provides for climate change inventories, national and regional climate change management plans, and enhanced mechanisms relating to carbon economic value, including carbon trading, carbon offsets, performance-based payments and carbon levies. It also provides for the establishment of a Climate Change Management Agency, which would report directly to the President and be responsible for policy formulation, coordination of mitigation and adaptation efforts, and strengthening Indonesia’s position in international climate forums.

Taken together, these developments highlight Indonesia’s phased approach to a low-carbon transition, balancing goals with practicality through regulatory reform, targeted projects, and flexible policies.

No. There have been no publicly reported legal proceedings, regulatory actions or investigations in Indonesia concerning sustainability-related statements, marketing claims or disclosures, whether environmental or social-related.

No, there are no laws or regulations that deal specifically with greenwashing.

Likely grounds include:

1. breaches of directors’ fiduciary duties.
2. tort claims for misrepresentation; and
3. criminal provisions on fraud, whether provisions on capital market-related fraud under the Capital Markets Law or general fraud provisions under the Criminal Code.

None at the moment. Whilst other jurisdictions may have observed climate change litigation, claims for breach of directors’ duties in relation to sustainability matters, ESG-related shareholder litigation and/or anti-ESG lawsuits, there have been no such publicly reported proceedings or actions in Indonesia.