InfoSAWIT, JAKARTA – Civil society organization Transformasi untuk Keadilan Indonesia (TuK Indonesia) is urging the Financial Services Authority (OJK) to strengthen the substance of its planned revision to sustainable finance regulations, warning that Indonesia risks weak oversight and growing greenwashing practices if reforms remain largely administrative.

The appeal focuses on the revision of OJK Regulation (POJK) No. 51/POJK.03/2017 concerning Sustainable Finance Implementation for Financial Service Institutions, Issuers, and Public Companies.

TuK Indonesia formally submitted its recommendations to OJK on May 21, 2026, arguing that the revision should become a turning point for improving governance amid increasing climate risks, social conflict, and environmental challenges.

According to the organization, the regulatory update should not merely revise reporting requirements but instead strengthen accountability for the social, environmental, and human rights impacts of financial activities.

Limited Public Participation Raises Concern

TuK Indonesia criticized the revision process as lacking sufficient transparency and public participation, particularly involving civil society groups and communities directly affected by investment and financing activities.

Erma Nuzulia Syifa, Research and Policy Analysis Staff at TuK Indonesia, said sustainable finance regulations should emerge from an open policymaking process rather than closed-door administrative discussions.

“This revision should not become merely an administrative exercise conducted behind closed doors. Sustainable finance regulations must come from transparent processes that involve communities directly affected by problematic financing—from agrarian conflict and environmental degradation to human rights violations,” Erma said in an official statement quoted by InfoSAWIT.

The organization argues that nearly a decade after POJK 51/2017 was introduced, implementation remains heavily document-oriented.

Corporate sustainability reports, it said, often prioritize compliance paperwork rather than demonstrating measurable changes in financing behavior or business practices.

At the same time, financing linked to deforestation, land disputes, environmental pollution, criminalization of communities, and indigenous rights violations continues to surface in various sectors.

Greenwashing Risks Under Scrutiny

TuK Indonesia warned that weak oversight has enabled sustainability claims to function more as corporate branding tools than genuine commitments.

According to Erma, the absence of dedicated public complaint mechanisms related to Environmental, Social, and Governance (ESG) implementation further complicates accountability.

“Many sustainability reports appear convincing on paper, yet realities on the ground tell a different story. Weak supervision creates the biggest risk—greenwashing—where sustainability claims become image-building tools without meaningful environmental or social improvements,” she said.

The organization also emphasized that the revised regulation still lacks firm integration of human rights principles as binding indicators in sustainable finance implementation.

This gap, TuK Indonesia noted, places Indonesia behind evolving global standards that increasingly position human rights as a core component of business governance and investment practices.

“Human rights are no longer optional in global business practices. International regulations are increasingly making them mandatory indicators across supply chains and financing systems. If Indonesia lags behind, the credibility of our sustainable finance framework will inevitably be questioned,” Erma added.

Calls for Stronger Oversight and Complaint Mechanisms

• In its submission to OJK, TuK Indonesia proposed several reforms, including:
• broader participation of civil society and affected communities in sustainability report verification;
• transparent and accessible public complaint systems;
• tighter monitoring against greenwashing practices; and
• mandatory human rights indicators within sustainable finance standards.

The organization stressed that financial institutions play a strategic role in shaping national development and therefore cannot be detached from responsibility over how capital flows impact people and ecosystems.

“Money flowing from financial institutions always creates real-world impacts. Sustainable finance should not stop at green terminology and annual reports, but ensure that no community is sacrificed for business profit,” Erma concluded. (T2)