Indonesia’s sustainability standard setter has issued two national standards based on IFRS S1 and IFRS S2. PSPK 1, on general sustainability-related financial disclosures, and PSPK 2, on climate-related disclosures, take effect on January 1, 2027, with early adoption permitted.
At the same time, Indonesia’s Financial Services Authority, OJK, is updating the regulatory framework that governs sustainability reporting by financial services institutions, issuers, and public companies. Companies need to distinguish the effective date of the standards from the legal scope and timing set by regulation.
What PSPK 1 and PSPK 2 establish
The Indonesian Financial Accounting Standards Board and Sharia Accounting Standards Board issued the standards on July 1, 2025.
PSPK 1 provides general requirements for financially material sustainability-related risks and opportunities. PSPK 2 addresses climate-related risks and opportunities. Their structure follows the ISSB global baseline: governance, strategy, risk management, and metrics and targets.
The standards are designed to improve comparability while working within Indonesia’s reporting environment. Companies in international groups should maintain one crosswalk among PSPK, IFRS Sustainability Disclosure Standards, group policies, and any other jurisdictional requirements.
Standards do not determine regulatory scope by themselves
OJK Regulation 51/2017 already established sustainable-finance and sustainability-reporting requirements for financial services institutions, issuers, and public companies. It includes sustainability action plans and sustainability reports under a phased framework.
In February 2026, OJK opened a public consultation on amendments to Regulation 51/2017. The proposed direction would strengthen sustainability governance and align disclosure with PSPK 1 and PSPK 2.
Until the amendments are final, a company should not present consultation language as an enacted reporting mandate. It should separately document:
- Its current obligations under Regulation 51/2017 and other applicable rules.
- The January 1, 2027 effective date of PSPK 1 and PSPK 2.
- Proposed changes that remain subject to OJK rulemaking.
- Voluntary, parent-company, lender, customer, or investor reporting commitments.
Legal and finance teams should approve the applicability analysis and update it when OJK issues final rules.
Build a bilingual disclosure architecture
Multinational reporting often fails at the last translation step. Do not treat the Indonesian report as a translated copy with no local owner.
Create a disclosure map that records the PSPK paragraph, required content, Bahasa Indonesia and group terminology, preparer, reviewer, data source, evidence, and publication location. Maintain a terminology glossary for material concepts, reporting boundaries, risk categories, targets, and GHG methods.
Review local and group reports together. A number, target, or risk description should not change meaning across languages or reporting channels without an approved explanation.
Prioritise the climate data foundation
Reconcile the sustainability reporting group to financial consolidation and create a complete register of sites and emission sources. For Scope 1 and Scope 2, preserve activity data, units, methods, estimates, factor sources, factor versions, and approvals.
For Scope 3, screen all applicable categories and focus first on material value-chain relationships. Document whether calculations use spend, activity, or supplier-specific information and how quality will improve over time.
Indonesia’s large geography and complex supply chains make source ownership important. Assign responsibility at both local operating-company and group levels, with a clear escalation path for missing data and late submissions.
A preparation sequence for 2027
During 2026, complete an applicability memo, PSPK gap assessment, reporting-boundary reconciliation, and data-owner map. Then run a dry GHG inventory and narrative disclosure using a representative reporting period.
Before the effective date, approve methods, estimates, materiality governance, scenario-analysis assumptions, and the reporting calendar. Build the evidence index as the dry report is produced; reconstructing it after publication is slow and unreliable.
Finally, test consistency with financial statements, annual-report risk disclosures, targets, and public environmental claims. If external assurance is planned, conduct an assurance-readiness review early enough to remediate the findings.
Information in this article was verified on August 9, 2026. OJK amendments and implementation requirements may change. This overview is general information, not legal advice.
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