Overview of PSPK 1 & 2
Introduced: December 17, 2024 (exposure drafts by DSAK-IAI)
Effective from: Financial years beginning January 1, 2027 (mandatory climate disclosure)
Last modified: March 31, 2025 (public consultation closed)
Region(s): Indonesia
About PSPK 1 & 2
Indonesia is transitioning from narrative-style ESG reporting to PSPK 1 & 2 (ISSB-Based Sustainability Standards).
These are mandatory, decision-useful climate disclosure with the introduction of PSPK 1 (General Requirements) and PSPK 2 (Climate Disclosures). These standards—localized versions of IFRS S1 and S2—will replace OJK Regulation No. 51/2017. The phased rollout emphasizes a “climate-first” approach: PSPK 2’s climate-related disclosures will be mandatory starting in FY 2027, with broader ESG topics under PSPK 1 to follow after 2029.
The goal is to enhance comparability, transparency, and investor confidence in climate risk reporting across Indonesian financial markets.
Criteria for compliance
Compliance is mandatory for all entities already covered under OJK Reg. 51, including:
- All companies listed on the Indonesia Stock Exchange (IDX), regardless of market cap
- Banks, insurers, pension funds, and other significant financial institutions under OJK supervision
Compliance timelines
2025
Final PSPK 1 and 2 standards expected; early voluntary adoption permitted
FY 2027
First mandatory PSPK 2-aligned climate reports (due in 2028)
Post-2029
Phased implementation of full ESG disclosures under PSPK 1
Disclosure requirements
Entities must report climate-related information aligned with IFRS S2, including:
- Scope 1 and Scope 2 GHG emissions (Scope 3 if material or tied to targets)
- Climate governance roles and board oversight
- Climate-related scenario analysis and transition plans
- Quantitative climate metrics and progress against targets
During the transitional period, general reporting principles from IFRS S1 apply only to climate-related disclosures.
Key obligations
- Submit climate disclosures via IDX/OJK-approved electronic platforms
- Include climate disclosures alongside annual financial reports
- Ensure board-level approval and public availability of all sustainability information
Third-party assurance
There is no formal audit requirement during the initial rollout. However, the OJK has signaled future interest in assurance mandates after sufficient market readiness and verifier capacity are established.
Penalties for non-compliance
Failure to comply may trigger:
- Administrative sanctions under OJK Law (warnings, fines, license restrictions)
- Possible suspension of public-company status
- Reputational and financing risks with institutional investors and lenders
- Debarment of directors
- Legal liability for material misstatements or omissions in ESG filings
