IDX Officially Launches Green-Based Stocks, Marking a New Era of Sustainable Investment!
As part of its commitment to strengthening the sustainable finance ecosystem and increasing the transparency and visibility of listed companies contributing to environmental goals, PT Bursa Efek Indonesia (IDX) has issued a Board of Directors Decree regarding the establishment of Green-Based Stocks, effective Friday, 31 July. This decree is a further implementation of Exchange Regulation No. I-A, which empowers the IDX to categorise listed companies based on their support for sustainability aspects.
The formulation of these regulations considers the Indonesian Sustainable Finance Taxonomy, as well as international best practices, including the Green Equity Principles published by the World Federation of Exchanges. The Green Equity Designation is granted to listed companies or prospective listed companies that, based on reviews by external review providers, are declared to have met specific criteria. These include the business’s contribution to green economic activities or transition, compliance with financial and governance requirements, and sustainability information disclosure.
To ensure ongoing compliance, listed companies are required to undergo periodic assessments and resubmit review reports from external providers to the IDX for evaluation. Overall, the introduction of Green-Based Stock regulations aims to improve the transparency and quality of sustainability information available to investors, the public, and other stakeholders, including the banking sector. This regulation is also expected to drive business transformation towards a green, low-carbon economy while expanding access to funding sources and a sustainable investor base for listed companies.
This initiative is part of the IDX’s contribution to supporting Indonesia’s sustainable development targets and emission reduction commitments. Since the development process began in 2025, four listed companies and three external review providers have participated in a pilot programme, reflecting a positive initial response from stakeholders. Feedback from this pilot phase has served as a foundation for the IDX to refine the regulations for wider implementation.
“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 Iding Pardi, Director of Development at the IDX.
Through this initiative, the IDX hopes to provide more structured information to investors, the public, and stakeholders, including banks. It is also expected to increase the visibility of listed companies to global and domestic investors and support the development of sustainability-based indices and investment products in the Indonesian capital market. Furthermore, the IDX emphasised that the Green Equity Designation does not constitute a ranking, investment recommendation, or a guarantee of financial performance, returns, or investment risk. “Investors must still conduct thorough analysis and consider their risk profiles and investment objectives before making investment decisions,” concluded Iding.