Consultation on PSPK 1 on General Requirements for Disclosure of Sustainability-related Financial Information (DE PSPK 1) and PSPK 2 on Sustainability-related Disclosures (DE PSPK 2)

Letter to Ikatan Akuntan Indonesia, 21 March 2025.

We refer to the Institute of Indonesia Chartered Accountants’ (Ikatan Akuntan Indonesia IAI) invitation to comment on the exposure drafts for PSPK 1 and PSPK 2 Sustainability Disclosures and welcome the opportunity to provide feedback. This consultation represents a key milestone in the IAI’s Roadmap for the Sustainability Standards (Standar Pengungkapan Keberlanjutan/ SPK) to deliver reliable, relevant, and integrated sustainability information that meets the needs of investors and creditors.

Norges Bank Investment Management (NBIM) is the investment management division of the Norwegian Central Bank and is responsible for investing the Norwegian Government Pension Fund Global. NBIM is a globally diversified investment manager with USD 1.7 trillion at 31 December 2024, of which USD2.3 billion (IDR 37,778 billion) was invested in the shares of 86 Indonesian listed companies.

As a long-term investor, we consider our returns over time to be dependent on sustainable economic, environmental and social development, as well as on well-functioning, legitimate and efficient markets. We are active investors in over 65 countries and require reliable, consistent and comparable sustainability-related financial information across global capital markets. We strongly support the ISSB as the global baseline of investor-focused standards for sustainability-related financial disclosures. The ISSB standards share the same conceptual foundations regarding, inter alia, materiality and relevance as the International Accounting Standards Board (IASB) financial reporting standards. Investors will be able to receive sustainability-related financial information that is concurrent, connected and complementary to financial statements. This is critical for us to formulate a holistic view of a company’s performance and prospects over different time horizons and inform our investment decisions, risk management processes and ownership activities.

Accordingly, we commend the IAI’s proposal as a significant step towards enhancing the Indonesian sustainability reporting regulatory framework. We would like to highlight 3 areas for further alignment with IFRS S1 and S2 that will enhance global comparability of companies and support cross-border capital flows.

  1. Timing of reporting. IFRS S1 requires an entity to report its sustainability-related financial disclosures at the same time as the related financial statements to provide investors with a coherent and connected understanding of the entity’s financial position and performance. DE PSPK1 proposes a one-month lag between these disclosures. We encourage IAI to consider a proportionate approach to phase in the requirement for sustainability-related financial disclosures to be published concurrently with the related financial statements.

  2. Transition reliefs for scope 3 emissions. IFRS S2 has a one-year built in transition period for the disclosure of scope 3 emissions and the use of methods other than the GHG Protocol (2004). DE PSPK 2 proposes a three-year transition relief period. Scope 3 GHG emissions can be material for some industries and the use of other methods reduces comparability across jurisdictions. We encourage IAI to consider using a proportionate approach to reduce the transition relief period.

  3. Use of Global Industry Classification Standard (GICS) to report financed emissions. IFRS 2 requires commercial banks and insurance firms to use GICS to report financed emissions disaggregated by sector. DE SPK 2 requires these financial institutions to use their regulators’ industry classification system even if they are already using GICS for other purposes. We encourage IAI to require entities already using GICS to do so for financed emissions reporting. Regarding entities not already using GICS, ISSB is currently deliberating the use of alternative classification schemes to account for application challenges. We recommend that IAI awaits and aligns with the ISSB’s final decision to maximise global comparability.

We thank you for considering our perspective and remain at your disposal should you wish to discuss these matters further.

Yours sincerely

Carine Smith Ihenacho                                                                       
Chief Governance and Compliance Officer 

Jeanne Stampe   
Lead Policy Advisor

Download the letter (pdf)