Sustainable banking in Indonesia


Mandatory sustainable finance regulation took effect in January 2019 in Indonesia. This PhD project explores how bank employees interpret the key norms embedded in the sustainable finance regulation.


Sachiko started her PhD at the Department of Business Law and Taxation after working in commercial as well as development financing in the Asia-Pacific region. Previously, she completed a Masters of Business Law at Monash University. Her final project dealt with the effectiveness of transnational private regulatory frameworks using a case of the Roundtable on Sustainable Palm Oil. Sachiko’s research interests lie in the roles and responsibility of investors as well as businesses in curbing environmental degradation and climate change through either mandatory or voluntary regulatory regimes.


Project background and aims

Businesses are increasingly held responsible for environmental degradation. The financial sector, which does not directly cause this harm, has over the past decade been increasingly criticised for the conduct of their borrowers. A set of normative standards, known as ‘sustainable finance’, have evolved since 1980’s to ensure that financers align economic, environment and social performance. These standards have diffused into developing countries, such as Indonesia. This project will explore how different social groups in Indonesia, such as bankers, business persons, environmentalists and the state regulator to interpret and respond to global norms governing sustainable finance.

The working hypothesis is that fragmented interpretive positions of different social groups are likely to lead to uneven interpretations and responses to sustainable finance norms. It is posited that the uneven distribution of knowledge, which is pronounced in rapidly developing countries, is the main factor resulting in the fragmentation of interpretive positions. This investigation aims to generate predictive insights into possible responses to sustainable finance initiatives and the capacity of sustainable finance norms to change attitudes towards the environment in Indonesia.


This is an empirical research project. It will use a social construction approach that identifies the epistemic assumptions used by the respondents to adopt, reject or re-interpret the sustainable finance norms incorporated into the mandatory Sustainable Finance Regulation. Data for investigating the working hypothesis will be collected from in-depth interviews conducted in urban centres in Indonesia and written sources.