Southeast Asia’s largest economy, Indonesia, plays a pivotal role in global decarbonization as the eighth largest emitter while also being home to essential resources for the energy transition, such as critical minerals for low-carbon technologies, nature-based solutions and carbon sinks to offset greenhouse gas emissions. McKinsey identified ten bold moves that Indonesia could take to become a global beacon for green growth. These include tapping into its potential to generate renewable energy; transforming its power grid; accelerating electric mobility; building a battery value chain; creating a thriving market for nature- and tech-based carbon management solutions; developing green fuels, and building green industrial estates. Catalyzing this growth will require innovative financing, capability building, and global partnerships.
The Indonesia International Sustainability Forum (ISF), for which McKinsey has been an event knowledge partner for 2023 and 2024, is a platform for innovation and collaboration on sustainable, inclusive growth. This year, over 11,000 participants from 53 countries attended the event, headlined by more than 250 speakers and panelists.
In his opening address, Indonesia’s President Joko Widodo highlighted that global collaboration is crucial for tackling climate issues. This set the stage for other world leaders such as Malaysia's Deputy Prime Minister and Minister of Energy Transition and Water Transformation Dato Sri Haji Fadillah bin Haji Yusof, as well as Singapore’s Senior Minister Teo Chee Hean to talk about working together more closely within ASEAN (the Association of Southeast Asian Nations) to unlock the region’s full potential.
McKinsey hosted panels that covered various sustainability topics. On Day 1, Global Co-leader for Sustainability Daniel Pacthod moderated a panel on energy storage solutions and critical minerals, which included Jörg Teichmann from PowerCo SE, Bernardus Irmanto from Vale Indonesia, Oscar Lou from CATL, Danielle Martin from ICMM, and Jane Cohen from the International Energy Agency. The panelists talked about the critical role of energy storage and critical minerals in the energy transition. An energizing discussion led by senior partner Hemant Ahlawat explored strategies for zero-emission transportation and the need to move beyond the hype and act, but at an appropriate scale. Participating in this discussion were Henry Tanoto from Toyota Astra, Anand Stanley from Airbus Asia Pacific, Tony Fernandes from Air Asia, Jesslyn Widjaja from Golden Agri Resources, and Drew Kodjak from the International Council on Clean Transportation.
Moments from day one of ISF 2024.
Top row, left to right: Martin Santoso (far right) moderating a panel with Gigih Udi Atmo of Ministry of Energy and Mineral Resources of Indonesia (middle), and Julfi Hadi of Pertamina Geothermal Energy (left); Daniel Pacthod leading a plenary discussion; Ashwin Balasubramanian (second from right) with the panel that discussed hydrogen solutions.
Bottom row, left to right: (left to right) Khoon Tee Tan with John Anis of Pertamina NRE, Kenneth Kong of Asia KBR, and Michael Whiteley of HSBC; Hemant Ahlawat moderating a plenary discussion; Rajat Agarwal (far right) with the panel that spoke on electric vehicle infrastructure acceleration.
On Day 2, a full house gathered for a session on financing the energy transition hosted by McKinsey and Global Blended Finance Alliance (GBFA). After a keynote speech by former minister and presidential envoy Mari Elka Pangestu of GBFA, partner Ashwin Balasubramanian moderated a panel with Mochamad Soleh from PT Perusahaan Listrik Negara (PLN), Muhamad Alhaqurahman Isa from Indonesia’s Ministry of Energy and Mineral Resources, Jen Tan from Sembcorp Energy Indonesia, and Mathieu Geze from HDF Energy Indonesia. The panel highlighted the need for robust financial strategies and international collaboration to enable Indonesia’s green investment ambitions. Panelists spoke about the challenges and opportunities in financing the energy transition in emerging economies such as Indonesia, and the role of countries, blended finance, and public-private partnerships.
McKinsey’s senior partner Khoon Tee Tan, associate partner Martin Santoso, and partner Rajat Agarwal moderated discussions on green hydrogen, geothermal energy, emission-free transportation; and senior partner Guillaume de Gantes and engagement manager Winny Arindrani were panelists in discussions on green investment principles, environmental and social governance, and financial performance. Indonesia’s Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan closed the day by reiterating that multi-stakeholder engagement is critical for successfully combatting climate change.
Moments from day two of ISF 2024.
Clockwise from top left: (left to right) Mari Elka Pangestu of Global Blended Finance Alliance led a panel discussing innovative financing with Christian Deseglise of HSBC, Harapman Kasan of UOB Indonesia, Agus Sari of Landscape Indonesia, and Katherine Stodulka of SYSTEMIQ; Kaushik Das with Rachmat Kaimuddin, Deputy Coordinating Minister of Maritime Affairs and Investments in Infrastructure and Transportation showcasing C-TIF; Guillaume de Gantès (far left) with participants in a roundtable discussion on green investment principles, environmental and social governance, and financial performance; Winny Arindrani (middle) speaking in that roundtable.
The Forum concluded with senior partner Kaushik Das and Indonesia’s Deputy Minister Rachmat Kaimuddin from the Ministry of Maritime Affairs and Investment discussing the Climate Transition Impact Framework (C-TIF), including the country’s role as the first C-TIF lighthouse case study. The C-TIF is a framework to help climate action decision makers quantify the socioeconomic impacts of climate transition pathways and understand the projected co-benefits and burdens.
At ISF, we witnessed strong commitment from businesses, governments, financiers, think tanks, and various stakeholders to driving green growth, building sustainable businesses, and facilitating capital flow into clean technologies. McKinsey is excited to be at the forefront of shaping sustainable and inclusive growth in Indonesia by bringing together public sector stakeholders, business leaders and specialists.