ANALYSIS OF BANKING INTEREST IN SUSTAINABLE FINANCE

Abstract

Sustainable finance is a strategic approach that integrates economic, social, and environmental aspects into the business activities of financial institutions. In Indonesia, the Financial Services Authority (OJK) through POJK No. 51/POJK.03/2017 requires all financial services institutions, including BUKU 1 and BUKU 2 banks, to implement sustainability principles in their operations and reporting. This study aims to analyze the level of interest, readiness, and obstacles faced by small and medium-sized banks (BUKU 1 and 2) in implementing sustainable finance. The research method used was a quantitative descriptive approach using content analysis techniques on annual reports and bank sustainability reports for the 2019–2023 period. Observed variables included three main aspects: internal education, adjustments to standard operating procedures (SOPs), and the development of sustainable finance action plans (RAKB). The results show an increase in disclosures related to sustainable finance since 2021, in line with increased regulatory socialization, environmental reputation promotion, and strengthening of digital sustainability initiatives post-pandemic. However, its implementation remains limited to corporate social responsibility (CSR) activities and has not been fully integrated into core business strategies. The main factors hindering the adoption of sustainable finance in BUKU 1 and 2 banks are limited financial resources, a lack of expertise, and minimal economic incentives from the government. This research emphasizes the importance of policy support, fiscal incentives, and technical assistance from the Financial Services Authority (OJK) to enable small banks to play an active role in strengthening the sustainable financial system in Indonesia.