Published on September 14, 2023

Fostering Private Sector’s Engagement in Sustainable Bonds

Indonesia has firmly committed to strengthening its efforts towards achieving the Sustainable Development Goals (SDGs) and realizing a low-carbon future. These efforts are mainstreamed in the Medium-Term National Plan, including achieving SDGs as one of the top priorities for Indonesia moving forward. Before the COVID-19 pandemic, Bappenas estimated that US$ 4.7 trillion was required to achieve the SDG targets, with a funding shortfall estimated at US$ 1 trillion. As we mark the halfway point to the deadline for achieving Agenda 2030, the lack of SDG financing has grown more pressing than ever. This should not be borne by the government alone. Scaling up private sector investment and innovation is essential to achieving the SDGs.

Since 2018, the Government of Indonesia has been taking actions to manifest the country’s SDGs and climate commitments through the issuances of thematic debt instruments in which the proceeds are exclusively allocated towards projects with a substantial impact on the social sectors and green economy—including the Government of Indonesia’s issuances of Green Sukuk, SDG Bond and most recently a Blue Bond. These issuances have contributed to raising and mobilizing nearly US$ 10 billion. Despite the success of sovereign thematic bonds, the country is still behind its neighbors in issuing local currency corporate thematic bonds, comprising less than 7% of the outstanding amount. Moreover, in a recent survey conducted by the Asian Development Bank (ADB), the respondents highlighted that the thematic bond market has the potential to expand but is inhibited by the lack of awareness, a pipeline of projects, and incentives and policy clarity from the government. If left unaddressed, such shortfalls may become a lost opportunity in scaling up thematic bonds for Indonesia's green, resilient, and inclusive development.

Acknowledging these needs and opportunities, UNDP, in collaboration with the Indonesia Financial Services Authority (OJK), Indonesia Stock Exchange (IDX), and ADB, organised a workshop series on sustainable bonds between May and June 2023. This workshop series was spread over three sessions to increase participants' understanding of sustainable bonds' theory and market application, the globally accepted principles on Green, Social, Sustainability and Sustainability Linked Bonds (GSS+), and the domestic policy, taxonomies, and other relevant regulations. The workshop series also presented practical examples and case studies from practitioners to enhance learning, highlighting the importance of the private sector’s role in driving much-needed solutions for sustainable development through thematic bonds.


Potential issuing entities and investment companies listening to experiences from the frontlines in promoting GSS bond issuances and investments.


The first workshop session on 23rd May focused on understanding the landscape and motivating the private sector to issue thematic bonds. Over 130 participants attended, of which more than a third were women, representing various local financial institutions and corporations. It began with an overview from UNDP on thematic bonds with recommendations to help develop the corporate market in Indonesia. A case study from Malaysia’s successful green corporate sukuk was then shared with the audience. ADB presented their findings on the landscape of thematic bonds with recommendations. The Financial Services Authority (OJK) encouraged the participants to consider thematic bonds by informing the audience about the regulations and incentives for such instruments. Finally, the day’s proceedings were wrapped up by a joint presentation from UNDP and ADB on their work on thematic bonds.

For the second session on 25th May, held entirely online, participants were given a walkthrough on the critical elements for thematic bond issuance. It was delivered by the International Capital Market Association (ICMA), the leading global authority on thematic bond standards. Further, the session touched upon market trends and guiding principles for new types of thematic bonds relevant to the Indonesian context, like Sustainability-Linked, Transition, and Blue Bonds.

The final workshop session was conducted on 22nd June. For this session, a selected group of participants from the previous two sessions were invited, i.e., Indonesian companies showing interest in issuing thematic bonds and institutional investors, i.e., investment managers, security companies, insurance companies, and pension funds. The first half of the session focused on the necessary steps and case studies for GSS+ Bond issuances targeted at prospective issuers. In contrast, the second half focused on enhancing knowledge and sharing best practices for building sustainable investment portfolios among investors.


Representatives from listed companies as potential issuers participating in the session on understanding the landscape and significance of GSS bonds


Through the UN Joint Programme Accelerating SDGs Investments in Indonesia (ASSIST) – funded by the UN Joint SDG Fund- UNDP Indonesia supports innovative debt instruments linked with SDGs. This is fulfilled through capacity building and technical assistance across the bond cycle, like the development of thematic frameworks and the project evaluation and selection process and carries over until the bond’s impact reporting process.


Representatives from listed companies as potential issuers participating in the session on understanding the landscape and significance of GSS bonds


This workshop series represents a significant step forward in unlocking the potential of thematic bonds in Indonesia. By fostering a deeper understanding of thematic bond principles, market trends, and regulatory frameworks, these sessions informed issuers and investors about the opportunities and their pivotal role in advancing the SDGs. As Indonesia prioritises its commitment to sustainability and low-carbon initiatives, the efforts to educate and engage stakeholders in the thematic bond market serve as a promising catalyst for green, resilient, and inclusive development, creating a path towards a more sustainable and prosperous future for the nation.

Written By: Devjit Roy Chowdhury and Ralista Haroen 

Reviewed By: Muhammad Didi Hardiana



This article was originally published at UNDP


The Joint SDG Fund's joint programmes are under the prestige leadership of the Resident Coordinator Office and implementing United Nations Agencies. With sincere appreciation for the contributions from the European Union and Governments of Denmark, Germany, Ireland, Italy, Luxembourg, Monaco, The Netherlands, Norway, Portugal, Republic of Korea, Spain, Sweden, Switzerland and our private sector funding partners, for a transformative movement towards achieving the SDGs by 2030.