Climate Policy Initiative (CPI), in collaboration with Bank Indonesia (BI), has officially launched the Guidebook on Implementing Sustainable MSME Business Models: Mitigation Action. The guidebook is intended to serve as a comprehensive reference for micro, small, and medium enterprises (MSMEs), financial institutions, and other stakeholders in supporting the transformation of MSMEs toward sustainable and inclusive business practices.

This guidebook is an enhanced version of the Green MSME Development Guide previously published by Bank Indonesia in 2024. Its scope has been expanded so that it can be applied across various business sectors, provide more practical guidance for MSMEs, and include indicators aligned with sustainable taxonomies commonly used as references for green financing by banks. The book presents a classification of sustainable MSME business models, more applicable indicators and assessment metrics, as well as a self-assessment framework tailored to the capacities and characteristics of MSMEs in Indonesia.

As part of the sell-assessment framework, Bank Indonesia provides a form specifically designed to help MSME actors conduct simple and structured self-evaluations. The form includes questions related to business profiles and key sustainability indicators based on criteria that cover climate change mitigation, the do no significant harm principle, social aspects, and financial and governance aspects.

The assessment results will indicate the stage of adoption of sustainable business practices achieved by MSMEs, which are categorized as Eco-Adopter, Eco-Entrepreneur, and Eco-Innovator. The presence of this guidebook is expected to help MSMEs improve competitiveness, expand access to sustainable financing, and respond to growing market demand for environmentally friendly and sustainable products and services.

The Governor of Bank Indonesia, Perry Warjiyo, stated that Bank Indonesia has launched the Guidebook on Implementing Sustainable MSME Business Models: Mitigation Action as a foundation to strengthen business governance and encourage sustainability aspects in MSME business models. The guidebook is designed to be practical and gradual so that businesses can mitigate emissions by integrating production and operational processes into sustainability principles.

Meanwhile, CPI Indonesia Director Tiza Mafira emphasized that the launch of this guidebook represents a strategic step to bridge the needs of policy, financing, and on-the-ground practices. “MSMEs are the backbone of Indonesia’s economy, yet they still face significant challenges in adopting sustainable practices. Through this guidebook, we aim to provide a practical, relevant, and contextual instrument that enables MSMEs to begin the transition gradually while improving their access to markets and sustainable financing,” said Tiza.

The formulation and preparation of this guidebook incorporate various national and international standards and best practices. They were tested against Focus Group Discussions (FGDs) with regulators, academics, financial institutions, civil society organizations, and MSME representatives. As such, this guidebook is expected to serve as a shared reference in supporting Indonesia’s green and low-carbon economic development agenda.

Going forward, CPI and Bank Indonesia will support the implementation of this guide through stages of socialization, pilot testing, and capacity building so that its benefits can be widely felt by MSMEs across sectors and regions.

Learn more about the guidebook