Indonesia’s financial sector operates under two key regulations that both address sustainable finance: POJK Number 51/POJK.03/2017 and SEOJK Number 16/SEOJK.04/2021. Both share the same driving purpose, which is to push financial institutions toward greater responsibility in environmental, social, and governance (ESG) matters.
Although they appear similar, POJK 51 and SEOJK 16 differ in their nature, scope, and function regarding the implementation and preparation of sustainability reports. Understanding the distinctions between the two is crucial for financial industry players, investors, and the general public interested in how regulations shape responsible business practices in Indonesia.
Table of Content:
What Is POJK 51?
POJK 51 is a formal regulation issued by the Financial Services Authority (OJK) in 2017. It carries binding legal force and applies to all Financial Services Institutions (LJK) under OJK supervision, including banks, financing companies, insurance firms, and other financial entities.
At its core, POJK 51 requires every LJK to embed sustainable finance principles into their business strategy and submit an annual Sustainable Finance Action Plan (known by its Indonesian acronym, RAKB). Beyond the action plan, institutions must also publish a Sustainability Report that demonstrates how far they have integrated ESG considerations into their day-to-day operations.
POJK 51 sets the foundational framework: what must be done, who is obligated to do it, and when it must be reported. In essence, it serves as the legal backbone of Indonesia’s entire sustainable finance ecosystem.
Read Also:
How Does a Company’s IPO Strengthen Its ESG and Sustainability Commitments?
What Is SEOJK 16?
SEOJK 16 is a Circular Letter issued by OJK in 2021, four years after POJK 51. Unlike a formal regulation, a circular letter functions as technical guidance or an implementation directive. SEOJK 16 specifically governs the format and procedures for submitting periodic reports by issuers and public companies.
Its scope is therefore narrower, applying only to companies listed on the stock exchange or those with public company status. One of its most significant provisions concerns sustainability disclosures within annual reports. Public companies are required to present ESG-related information in a more structured and standardized manner.
SEOJK 16 responds to growing demands from capital markets for greater transparency from issuers, particularly around risks and opportunities tied to environmental and social issues.
The Key Differences
The first distinction lies in the type of legal instrument each represents. POJK 51 is a full regulation with higher legal standing and mandatory compliance for all LJKs.
SEOJK 16, as a circular letter, functions more as technical guidance, though it still carries compliance obligations for its intended audience. The second difference involves the range of entities covered.
POJK 51 applies broadly across the financial services industry, from banks to insurers. SEOJK 16 has a more targeted reach, limited to issuers and public companies listed in the capital market. The third difference concerns the substance each regulation focuses on.
POJK 51 governs the adoption of sustainable finance principles across an institution’s entire business, covering action planning and standalone sustainability reporting. SEOJK 16 is more concerned with how sustainability information is disclosed within existing annual reports, using more detailed and uniform presentation standards tailored to the needs of capital market investors.
How the Two Regulations Work Together
Despite their differences, POJK 51 and SEOJK 16 operate within the same ecosystem and complement each other well. POJK 51 builds institutional commitment and systems across the financial sector as a whole, while SEOJK 16 ensures that commitment is communicated clearly to the public and market participants.
For companies that are both financial institutions and publicly listed, such as banks that have gone public, both regulations apply simultaneously. Put simply, POJK 51 answers the question of what needs to be done, while SEOJK 16 addresses how it should be reported to the public.
Together, they reflect OJK’s commitment to steering Indonesia’s financial industry toward more responsible, sustainable, and transparent practices for a better future.
Prepare Your POJK 51 and SEOJK 16 Sustainability Report with Validerra
Ensure your company’s Sustainability Report complies with POJK 51 and SEOJK 16. Validerra provides professional assistance to create a structured, credible, and regulation-aligned report for your company and stakeholders. Consult your Sustainability Report needs with Validerra.
Author: Ainur
Editor: Lina
References
Otoritas Jasa Keuangan. (2017). Peraturan OJK Nomor 51/POJK.03/2017 tentang Penerapan Keuangan Berkelanjutan bagi Lembaga Jasa Keuangan, Emiten, dan Perusahaan Publik. Jakarta: OJK.
Otoritas Jasa Keuangan. (2021). Surat Edaran OJK Nomor 16/SEOJK.04/2021 tentang Bentuk dan Tata Cara Penyampaian Laporan Berkala Emiten atau Perusahaan Publik. Jakarta: OJK.