Exploring Environmental and Social Risk Management of Indonesian Banks

Environmental and social problems are expected to be the next crisis after the pandemic. It is known that financial institutions carry a pivotal role in shaping the economic direction of a nation. With the rising social and environmental issues, this paper attempts to explore and analyse the environmental and social risk management of Indonesian banks. The data of this research were taken from in-depth interviews with seven Indonesian banks. This study employs a qualitative research method in assessing the management of environmental and social risk. The paper found that there are some initiatives among the banks in the implementation of social and environmental risk management programmes. The initiatives cover most of the social and environmental issues currently faced by the nation. However, there is no specific issue addressed by the banks to optimise the effect of the programmes. Moreover, there is a lack of a robust framework guiding the practices of the banks. Government and non-governmental organisation supports are essential in building a robust and sound policy assisting the implementation of the industries. Our results seek to reinforce the research and development facing environmental and social issues globally.