Indonesia OJK Sustainability Reporting: The ISSB-Aligned Mandate Taking Shape

Indonesia OJK Sustainability Reporting: The ISSB-Aligned Mandate Taking Shape

Indonesia's financial regulator spent February and March 2026 asking the market a blunt question: are you ready to report sustainability data the way investors actually use it? The Otoritas Jasa Keuangan (OJK), Indonesia's Financial Services Authority, ran a public consultation on a draft regulation that would bolt International Sustainability Standards Board (ISSB) alignment onto the country's existing sustainability reporting rule. The consultation closed on 13 March 2026.

Spectreco, a sustainability technology and advisory firm with hubs in Atlanta, London, Lisbon, Dubai, Muscat, and Lahore, works with financial institutions and listed issuers across Asia preparing for exactly this kind of shift: from narrative ESG reporting to investor-grade, assured climate disclosure.

Here is what the draft regulation covers, how it connects to the national standards Indonesia published in July 2025, and what main board issuers, banks, and asset managers should be doing before the first reporting year begins.

What Does POJK 51 Require From Indonesian Companies Today?

Since 27 July 2017, OJK Regulation No. 51/POJK.03/2017 on the Implementation of Sustainable Finance has required financial services institutions, issuers, and public companies to file an annual sustainability report, either bundled into the annual report or published as a standalone document.

POJK 51 was ahead of its time. It pushed Indonesian banks, insurers, and listed companies to disclose environmental and social initiatives years before most of Southeast Asia had any binding rule at all. But the report it demands is narrative. There is no mandatory climate metric, no standardised emissions disclosure, and no independent assurance requirement.

That gap is exactly what the OJK's new draft closes. Instead of writing a fresh rulebook, the regulator is layering a technical reporting standard, built by Indonesia's accounting profession, on top of the entity scope POJK 51 already defined.

What Are PSPK 1 and PSPK 2?

PSPK 1 and PSPK 2 are Indonesia's first national sustainability disclosure standards, published on 1 July 2025 by the Ikatan Akuntan Indonesia (IAI), the Institute of Indonesia Chartered Accountants, through its Sustainability Standards Board. Both are modeled directly on IFRS S1 and IFRS S2, the general and climate-specific disclosure standards issued by the ISSB.

Source: Ikatan Akuntan Indonesia, standards launch announcement, July 2025; KPMG Indonesia, At a Glance: PSPK 1 & PSPK 2, October 2025

PSPK 1: General Requirements

PSPK 1 sets out how a company discloses sustainability-related risks and opportunities that could reasonably affect its cash flows, financing access, or cost of capital. It covers governance, strategy, risk management, and metrics and targets, the same four pillars ISSB built into IFRS S1.

PSPK 2: Climate-Related Disclosures

PSPK 2 is the climate companion standard. It requires Scope 1, Scope 2, and material Scope 3 greenhouse gas emissions, climate scenario analysis, transition plans, and board-level oversight of climate risk, measured against the GHG Protocol Corporate Accounting Standard.

Both standards are effective for annual reporting periods beginning on or after 1 January 2027. Notably, PSPK 1 and PSPK 2 do not themselves say which entities must apply them or on what phased schedule. That decision sits with OJK, which is exactly what the February to March 2026 consultation was about.

What Is OJK's Proposed ISSB-Aligned Mandate?

OJK's draft regulation, formally titled the Implementation of Sustainable Finance for Financial Sector Business Entities, Issuers and Public Companies, would require the entities already covered by POJK 51 to report against PSPK 1 and PSPK 2 on a phased timeline. The proposal also adds two requirements POJK 51 never had: mandatory independent assurance of reported sustainability information, and a formal transition plan addressing climate risks and opportunities.

Source: IAS Plus (Deloitte), Indonesian regulator consults on mandating sustainability reporting aligned with ISSB standards, February 2026; XBRL International, Indonesia consults on ISSB-aligned sustainability reporting mandate, 2026

Phase 1, FY2027: Main Board Issuers, Large Banks, and the Exchange

Main board issuers, large banks, and the Indonesia Stock Exchange (IDX) itself would be first in line, reporting against PSPK 1 and PSPK 2 for the financial year beginning 1 January 2027.

Phase 2, FY2028: Additional Issuers and Debt Issuers

A second wave brings in additional listed entities and debt issuers, widening the mandate beyond the largest, most closely watched names on the exchange.

Phase 3, FY2029: Smaller Banks and Asset Managers

By FY2029, smaller banks and asset managers would be pulled into scope, closing most of the gap between POJK 51's broad entity list and full ISSB-aligned reporting.

One detail matters more than the effective date itself. BDO Indonesia notes that while the standards take effect for periods beginning 1 January 2027, the first reporting period would likely begin 1 January 2026. Companies need a full year of comparative data to disclose against once the standard applies.

Ni Nyoman Sri Amandari, ESG Taskforce Lead at BDO in Indonesia, put it directly: "SPK 1 and SPK 2 signal a move towards accountability. Companies will need to demonstrate not only their sustainability initiatives, but also how climate and sustainability risks directly influence financial performance and long-term enterprise value."

Source: BDO Indonesia, Indonesia's New Sustainability Disclosure Standards Are Coming

The independent assurance requirement lines up with a separate global deadline. ISSA 5000, the first global assurance standard built specifically for sustainability reporting, takes effect for periods beginning on or after 15 December 2026, the same window Indonesian issuers will be closing their first PSPK-aligned reporting year in.

How Does Indonesia's Timeline Compare Across Southeast Asia?

Indonesia is not moving first in the region, but it is moving at real scale. Singapore set the regional pace: SGX RegCo and the Accounting and Corporate Regulatory Authority built a tiered, ISSB-aligned climate disclosure regime that started with Scope 1 and Scope 2 reporting for all SGX-listed companies from FY2025, phasing broader ISSB disclosures in through FY2030 by company size.

Most Southeast Asian coverage of Indonesia still stops at POJK 51. Few outlets have connected the July 2025 PSPK standards to the OJK's 2026 consultation, which is the actual mechanism that will make ISSB-aligned reporting mandatory rather than aspirational. As the largest economy in ASEAN, Indonesia's phased mandate will set a reference point for how the rest of the region sequences bank and issuer coverage.

What Should Indonesian Issuers and Banks Do Before FY2027?

Waiting until the regulation is finalised is the most expensive way to prepare for it. A few practical moves shrink the gap now.

• Run a baseline gap assessment. Compare current POJK 51 disclosures against PSPK 1 and PSPK 2 requirements to find where governance, strategy, and metrics content is missing entirely.
• Start Scope 1 and Scope 2 data collection in 2026. If the first reporting period is effectively 1 January 2026, comparative emissions data needs to exist before the standard's effective date arrives.
• Map Scope 3 data sources early. Financed emissions and value chain data take the longest to build reliable processes around, particularly for banks. Recent amendments to IFRS S2 give financial institutions some relief on Category 15 financed emissions scope, but only where local regulators adopt the relief, which OJK has not yet confirmed for Indonesia.
• Assign board-level ownership of climate risk. PSPK 2 expects governance disclosures that show the board actually oversees climate risk, not a sustainability team operating in isolation.
• Budget for assurance now. Mandatory independent assurance changes vendor selection, internal controls, and reporting timelines. Leaving it until FY2027 is too late to build defensible data lineage.

None of this requires waiting for OJK's final rule. The entity scope, the standards, and the direction of travel are already public.

Frequently Asked Questions (FAQs)

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Get Ready for Indonesia's ISSB Mandate Before FY2027

PSPK 1 and PSPK 2 are published, OJK's phasing is on the table, and the entities in scope are already known. What most Indonesian issuers and banks lack is not information. It is a data pipeline that can survive independent assurance. Book a Spectreco Indonesia ISSB readiness assessment to benchmark your current POJK 51 disclosures against PSPK 1 and PSPK 2, map your Scope 1 through 3 data gaps, and build an assurance-ready reporting timeline before the FY2027 clock starts.

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