INNOVATION IDEA
SUSTAINABLE FINANCE
Written by:
Akira Resta Hartono
Faculty of Economics and Business
Universitas Gadjah Mada
Yogyakarta
September 10, 2022
Introduction
Indonesia has relied on coal-powered power station for many years. According to IDX,
61% of Indonesia’s electricity comes from coal-powered power station (Endrawati, 2021). The
impact these plants have on environment is huge. When coal is burned, it produces energy and
airborne toxins such as nitrogen oxide, sulfur dioxide, and lead. This may cause health issue
ranging from asthma to neurological disorders. In the long-run, coal burning causes climate
change. The carbon in coal turns into carbon dioxide when it’s burned. Carbon dioxide is heat-
trapping gas. As a result, the heat is trapped in the carbon dioxide and warms the planet.
Sustainable finance try to help reduce the adverse effects on the environment.
Sustainable finance is the process of making investment decisions in the financial sector
while considering the effects it has on environmental, social, and governance (ESG) factors
(Bakken, 2021). The environmental factors refer to mitigation of climate crisis or use of
sustainable resources. The social factors are consumer protection and diverse hiring practices,
and human and animal rights. Governance factors refer to employee relation, compensation
program, and the management of the organization. In order to contribute to sustainable finance
on the environment factors, I propose these innovation ideas:
1. Solar Panels Usage
Solar panels can be used to supplement the electricity needs for BRI’s headquarter. This
will lower BRI’s dependence on PLN, and more on sustainable power source. As a result, it
will lower the electricity bill. Although the cost of solar panel is high, its maintenance cost is
relatively low because there isn’t many moving part on a solar panel. It just needs to be cleaned
a few times in a year. Most reliable solar panel manufacturers offer warranty of 20—25 years.
The technology development in quantum physics and nanotechnology also gives solar panel
an advantage. It will increase the efficiency of electricity input in solar panel. Indonesia’s
weather also benefits the use of solar panel because Indonesia have sunshine all year round.
This ensures the steady flow of electricity throughout the year.
2. Waste Management
Waste management will help reduce the adverse effect on environment. It can be done
by using 4R, reduce, reuse, recycle and replace. To reduce our waste, we can use less paper
and replace it with digital documents. To reuse and recycle waste, BRI can partner up with
non-profit organization such as Greenpeace Indonesia and Indonesia Solid Waste Association
to manage BRI’s waste. Those organization will manage the waste from BRI so it doesn’t end
up in landfill.
3. Interest Rate Discount
Corporate customer who uses sustainable energy and/or manage their own waste in a
way to reduce adverse impact on the environment will receive lower interest rate. In order to
get the lower interest rate, at least 30% of the electricity that they use in one month have to be
from sustainable energy source. If they manage their own waste, they need to reuse/recycle
most of their waste. This incentive will encourage corporate customers to use sustainable
energy because it will reduce their operation and interest expenses. Since the waste
management is cheaper to be applied compared to the sustainable energy, corporates are likely
to improve their waste management to get the lower interest rate. This might increase the
volume market volume for BRI. For example, BRI’s interest rate for corporates is at 8%. If
30% of the electricity usage is from sustainable energy, they will have 6% interest rate instead
of 8%.
Conclusion
To conclude, I propose the use of solar panel for BRI’s headquarter to increase the
usage of sustainable energy source. I also try to encourage corporations to use sustainable
energy and proper waste management by giving them lower interest rates. These ideas will help
BRI to contribute in reducing negative impact on the environment from the usage of
unsustainable energy source and poor waste management.
References
Bakken, R. (2021, August 9). What Is Sustainable Finance and Why Is It Important? |
Harvard Extension School. https://extension.harvard.edu/blog/what-is-sustainable-
finance-and-why-is-it-important/
Endrawati, O. (2021, August 2). 61 Persen Sumber Listrik RI Berasal dari Pembangkit Batu
Bara. https://www.idxchannel.com/economics/61-persen-sumber-listrik-ri-berasal-dari-
pembangkit-batu-bara
Union of Concerned Scientists. (2017, November 15). Coal Power Impacts | Union of
Concerned Scientists. https://www.ucsusa.org/resources/coal-power-impacts
Vourvoulias, A. (2022, August 30). Advantages & Disadvantages of Solar Energy |
GreenMatch. https://www.greenmatch.co.uk/blog/2014/08/5-advantages-and-5-
disadvantages-of-solar-energy
