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Transforming financial systems has been considered a promising avenue to ensure financial flows consistent with low carbon and climate resilient development. An important first step to do so has often been the development of sustainable finance roadmaps. Drawing on key stakeholder interviews in Indonesia in 2019–2020, this article examines how Indonesia's sustainable finance roadmap has unfolded on the ground and investigates key challenges to its effective implementation. The study finds that there has been high procedural compliance by financial institutions through developing sustainable finance action plans and submitting annual sustainability reports to the financial regulator. However, there is considerable variation and inconsistency in interpreting what constitutes a 'green' project among financial institutions, enabling some financial institutions to engage in little more than tokenism. With the limited regulatory oversight currently provided, it is difficult to see how financial institutions might be incentivised to do more or how tangible sustainability outcomes can be achieved. This article proposes potential means of overcoming some of the blockages in implementing the roadmap, which include greater intervention to incentivise climate finance by Indonesia's central bank. Key policy insights Indonesia's sustainable finance roadmap is well underway in which most financial institutions have been compliant to sustainable finance regulations. However, with limited substantive regulatory oversight it is difficult to see tangible sustainable outcomes; Sustainable finance regulations and regulatory oversight needs to be improved through enhanced disclosure standards and risk management processes and incentives for compliance; Greater intervention by Indonesia's central bank is needed to fast-track sustainable finance by stipulating green macro prudential regulations that incentivise or direct resources away from carbon intensive sector. [ABSTRACT FROM AUTHOR]

Currently, Indonesia has adopted Low Carbon Development (LCD) in its Medium-Term Development Plan (RPJMN) 2020-2024. One of the priority activities is agriculture, which accounts for 12.21% of total greenhouse gas emissions. The agricultural sector is the victim affected by CO2 emissions, such as degradation, shrinkage of agricultural resources, land and water, shifting planting seasons, crop failures, decreased food production due to rising air temperatures, floods, and droughts. Greenhouse gas emissions are predicted to continue to increase along with the increasing demand for food. The purpose of this study is to predict and find an alternative policy framework for low-carbon development in the agricultural sector in Indonesia. This study uses a quantitative and qualitative approach by Artificial Neural Network (ANN), and multicriteria policy (MULTIPOL) analysis. The data were obtained through secondary data in 2014-2018, and the primary data are in-depth interviews, Focus Group Discussions (FGD), and field observations. The results of ANN show that the predictions of provinces that need to adopt low-carbon development in Indonesia are dominated in production centers such as Java Island, so an alternative policy framework using MULTIPOL is needed. Furthermore, this research establishes three scenarios, eight policies, twenty-six actions, and nine evaluative criteria in analyzing the LCD of the agricultural sector. The results indicate that LCD can be conducted by integrating the speed scenario (S2) with a value ranging from 6.3 (policy to increase capacity and quality of human resources) to 18.7 (circular economy). This scenario accommodates policies related to low carbon reduction and agricultural production increase, such as a circular economy, co-benefit adaptation strategies, low carbon technology innovation, and strengthening low carbon networks. [ABSTRACT FROM AUTHOR]