CPI and BI Launch Guidelines for Sustainable UMKM Businesses
Jakarta, CNBC Indonesia - Climate Policy Initiative (CPI), in collaboration with Bank Indonesia (BI), has launched the Guideline Book for Implementing the Sustainable UMKM Business Model: Mitigation Action. The book is intended as a comprehensive reference for micro, small and medium enterprises (UMKM), financial institutions, and other stakeholders in promoting the transformation of UMKM toward sustainable and inclusive business practices.
The guidelines are the result of refining the Green UMKM Development Guidelines previously issued by Bank Indonesia in 2024, with expanded scope for cross-sector use, more actionable benchmarks for UMKM, and indicators aligned with the sustainable taxonomy as a reference for banks’ green financing allocations.
The book presents a classification of sustainable UMKM business models, more practical indicators and assessment metrics, and a self-assessment framework tailored to the capacities and characteristics of UMKM in Indonesia.
As part of the self-assessment framework in the guidelines, Bank Indonesia provides a form to facilitate UMKM actors in carrying out a self-assessment in a simple and structured manner. It includes questions about business profile and key sustainability indicators based on criteria for climate change mitigation, the do no significant harm principle, social aspects, as well as financial and governance aspects.
The assessment results will indicate the stages of adoption of sustainable business practices among UMKM, consisting of UMKM Eco-Adopters, Eco-Entrepreneurs, and Eco-Innovators. The introduction of the guidelines is expected to help UMKM improve competitiveness, widen access to sustainable financing, and respond to growing market demand for environmentally friendly and sustainable products and services.
Governor of Bank Indonesia, Perry Warjiyo, stated that Bank Indonesia has launched ‘Guideline for Implementing the Sustainable UMKM Business Model: Mitigation Action’ as a basis to strengthen the governance of the business and to push sustainability aspects within the UMKM business model.
The guidelines are designed to be practical and staged so that business actors can undertake emissions mitigation by integrating production and operational processes into sustainability principles.
Meanwhile, CPI Indonesia Director, Tiza Mafira, said the launch represents a strategic step to bridge policy needs, financing, and practice on the ground.
“UMKM are the backbone of Indonesia’s economy, but they still face significant challenges in adopting sustainable practices. Through this guideline, we aim to present practical, relevant, and contextual instruments so that UMKM can begin the transition gradually, while also improving their access to markets and sustainable financing,” said Tiza, quoted on Saturday, 7 March 2026.
The formulation and drafting of the guidelines refer to various national and international standards and best practices, and were validated through Focus Group Discussions (FGD) with regulators, academics, financial institutions, civil society organisations, and UMKM representatives. As such, the guidelines are expected to serve as a joint reference in support of Indonesia’s green and low-carbon economic development agenda.
Going forward, CPI and Bank Indonesia will support the implementation of the guidelines through socialisation, pilots, and capacity-building phases, so that the benefits can be felt broadly by UMKM across sectors and regions.