Climate-Related Financial Risks
ESG Risk Management in Financing Activities
BCA manages ESG risks in its financing activities by ensuring that each borrower meets the required documentation and specific criteria for each credit product. BCA has issued Environment and Social Risk Management (ESRM) guidelines for its Business Teams to assess ESG risks among corporate borrowers.
Inter-Unit Collaboration in Mitigating ESG Risks
Marketing
Conducting due diligence, providing credit to healthy businesses, and determining the Sustainable Business Activity Category
Credit Analysis
Analyzing proposals from prospective corporate and large commercial debtors related to ESG, ensuring that credit is granted in accordance with applicable regulations
Compliance Unit
Ensuring the company's compliance with banking laws and regulations
Decision Maker
Responsible for credit decision-making, from business development to credit risk analysis
Operating Branch
Monitors customer business, credit quality, and profitability, and establishes anticipatory measures
Supervision
Oversees and detects potential credit problems and takes action to avoid supervision
Integration of ESG Aspects in Financing
In its financing activities, BCA applies a series of strict credit requirements for all segments. BCA also implements an escalation mechanism in the credit approval process that involves various work units and credit committees, up to the Board of Directors.
Sectoral Credit Policy
Establishing credit policies for sectors with high ESG risk
Plantation & Palm Oil Industry
Coal Mining
Timber & Forest Products
Toll Road Construction
Cement & Iron Industry
Oil & Gas
Power Utilities
Pulp & Paper
Exclusion List
Illegal Trade in Wild Animals or Wild Animal Products
Weapons Production & Trade
Illegal Logging
Gambling & Money Laundering
Violating the rights of local communities
Damage to World Heritage Sites
Forced labor, child exploitation, human rights violations
Production & Distribution of Narcotics
BCA's Efforts in Risk Management
BCA's Risk Management Division is responsible for identifying and managing risks arising from business activities, including credit risk and risks related to LST and climate change.
Since 2022
BCA has classified debtors based on their support for environmental protection and climate change mitigation, in accordance with the Indonesian Green Taxonomy.
Since 2023
BCA began piloting LST risk assessments on debtors in high-risk sectors such as palm oil and coal mining.