IDX Establishes Green Equity Designation
As part of its commitment to strengthening the sustainable finance ecosystem and increasing the visibility of listed companies contributing to environmental goals, the Indonesia Stock Exchange (IDX) has issued a Board of Directors Decree regarding the establishment of Green Equity Designation, effective from Friday, 31 July 2026. This decree is a further implementation of Exchange Regulation No. I-A, which empowers the IDX to categorise listed companies based on their sustainability contributions.
The regulations were developed in alignment with the Indonesian Sustainable Finance Taxonomy and international best practices, including the Green Equity Principles issued by the World Federation of Exchanges. The Green Equity Designation is awarded to listed companies or prospective listed companies that, based on reviews by external review providers, meet specific criteria. These include the business’s contribution to green economic activities or transition, compliance with financial and governance requirements, and transparency in sustainability reporting. To maintain these standards, listed companies are required to undergo periodic assessments and resubmit external review reports to the IDX for evaluation.
The primary objective of this designation is to improve the transparency and quality of sustainability information available to investors, the public, and stakeholders, including the banking sector. The initiative is also expected to drive business transformation towards a green, low-carbon economy while expanding access to sustainable funding sources and investor bases. This move supports Indonesia’s commitment to sustainable development goals and emission reduction targets.
Since the development of the Green Equity Designation began in 2025, four listed companies and three external review providers have participated in a pilot programme. The positive feedback from this pilot serves as a foundation for the IDX to refine the regulations for wider implementation. Moving forward, companies that participated in the pilot may continue the designation process in accordance with the established mechanisms.
“The Green Equity Designation is a concrete step by the IDX to connect the sustainability agenda with the real funding needs of listed companies. Through more structured and verified information, we are making it easier for both domestic and global investors to identify companies that truly contribute to the low-carbon transition, while simultaneously expanding access to sustainable funding sources,” stated the Director of Development at IDX, Iding Pardi.
Through this initiative, the IDX hopes to provide structured information to investors and stakeholders, enhancing the visibility of listed companies and supporting the development of sustainability-based indices and investment products in the Indonesian capital market. However, the IDX emphasises that the Green Equity Designation does not constitute a ranking, investment recommendation, or a guarantee of financial performance, returns, or investment risk. Investors are advised to conduct thorough analysis and consider their risk profiles and investment objectives before making decisions.