Job Opening

Posting Title: UNEP Finance Initiative (UNEP FI)- Consultant for Good Growth Partnership in Indonesia fiscal incentives technical support
Department/Office: United Nations Environment Programme
Duty Station: GENEVA
Posting Period: 03 October 2022 - 09 October 2022
Job Opening Number: 22-United Nations Environment Programme-192204-Consultant
Staffing Exercise N/A
United Nations Core Values: Integrity, Professionalism, Respect for Diversity
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Result of Service

The ultimate result of the service will be strengthened enabling conditions for the provision of public and private capital at scale for sustainable commodity production and the establishment of enhanced fiscal policies to support sustainable land use in Paraguay.

Work Location

Working remotely

Expected duration

2 months

Duties and Responsibilities

The United Nations Environment Programme (UNEP) is the leading global environmental authority that sets the global environmental agenda, promotes the coherent implementation of the environmental dimension of sustainable development within the United Nations system and serves as an authoritative advocate for the global environment.

The overall objective of the UNEP’s Economy Division is to encourage decision makers in government, local authorities and industry to develop and adopt policies, strategies and practices and technologies that promote sustainable patterns of consumption and production, make efficient use of natural resources, ensure safe management of chemicals and contribute to making trade and environment policies mutually supportive. It promotes the development, use and transfer of policies, technologies, economic instruments, managerial practices and other tools that assist in environmentally sound decision making and the building of corresponding activities.

The United Nations Environment Programme Finance Initiative (UNEP FI) is the strategic partnership between the United Nations and over 400 banks, insurers and investors. For over 28 years UNEP FI has been shaping and driving the international sustainable finance agenda, setting global standards and growing a global network of leading financial institutions. Through its work-streams and regional activities, peer learning, methodology development, training and research, UNEP FI carries out its mission to help the financial industry align with and contribute to the Sustainable Development Goals and with that take on the crucial role it must play in achieving a sustainable future.

UNEP Finance Initiative in collaboration with the International Finance Corporation and in partnership with UNDP, WWF US and Conservation International, is executing a GEF funded project on enabling transactions for removing deforestation from commodity supply chains (“Good Growth Partnership”, hereinafter referred to as GGP) with a focus on palm oil in Indonesia and Liberia, soy in Brazil and beef in Paraguay. The project is comprised of three components:

1) Support to commercial transactions
2) Support to Financial Markets & Institutions
3) Support to Governments

In a rapidly evolving operating environment that increasingly recognize the importance of forests in supporting the functioning of agricultural commodity supply chains, risks created by unsustainable deforestation present a considerable threat for the long-term value of companies producing, transforming, transporting and selling these commodities.

The issue of finance mobilization to face the challenges related to forest and ecosystems loss has taken center-stage in the discussions. According to UNEP report State of Finance for Nature (2021) there is a USD 4.1 trillion financing gap to be closed for the world to meet the climate change, biodiversity, and land degradation targets, with current investments in Nature-based solutions amounting to only USD 133 billion, mostly from public sources. However, in a context where the share of government expenditure dedicated to ODA and agricultural investment is declining, it is key to ensure that scarce public resources are not only used most efficiently, but also help mobilize private finance.

Effective fiscal policies can play a role in redirecting private financial flows and support investments into more sustainable products, inputs, and activities, accelerating the move of production and consumption behaviours towards more resilient, environmentally sound, healthy, and socially fair food system. Through the use of financial incentives (subsidies, credit, loan guarantees, income support, payment for ecosystem schemes, tax credit, etc.), the government can help generate an environment conducive to green investments (e.g. by providing critical financial support attached to ecological services to small-scale producers), reduce the cost and risks for private investors in green technologies (e.g. through tax credits or feed-in tariffs). Fiscal instruments can also help raise public revenue (eg. through fuel or pollution tax, water tariffs) which can then be reallocated to social or environmental services, and support sustainable practices through targeted incentives (e.g. payment for ecosystem services, organic farming schemes).

There is extensive evidence that existing economic incentives (in the form of subsidies, credits, or tax relief, etc.) in the agri-food sector are often not aligned with sustainable objectives, but instead favor economic activities that cause environmental harm and biodiversity loss. The reform of those perverse incentives is one of the key opportunities for reform, as this will both free public and private resources towards ecological services, and incentivize investments in NbS (nature based solutions) that are currently underpriced and underprovided.

This consultancy will focus on GGP activities in Indonesia. As part of the ongoing technical support on issues relating to fiscal policy reform under Component 3 of the transaction child project, gaps and challenges with respect to the existing fiscal incentives regime have been identified.

Indonesia’s economy is mainly dependent on its existing natural resources, if not managed sustainably the country will lose its most diverse tropical forests in the world. For instance, the growth of the palm oil industry came at the expense of lost forests, biodiversity and huge greenhouse gas emissions from peatland conversion: between 1990 and 2005 as much as 55-60 per cent of palm oil expansion was at the expense of natural forest. Up to 170 million including remaining tropical forest in Indonesia could be lost between 2010 and 2030 if current trends continue according to WWF’s Living Forest Report in 2015.

Acknowledging the crucial role of financial institutions in the transition to a sustainable economy, in 2014 OJK (Otoritas Jasa Keuangan/ Indonesian Financial Services Authority), the regulator which supervises all financial institutions including banks, has launched the Sustainable Finance Roadmap Phase I. The first roadmap focused on regulatory framework and reporting disclosures, capacity building, and incentive development. In 2016-2017, a pilot project on First Movers on Sustainable Banking were held. Eight major banks representing 46.5% national baking assets voluntarily pledge to become the first movers on sustainable finance and provided with ESG integration technical assistance supported by WWF-Indonesia as OJK’s partner. In 2016, OJK initiated sustainable finance award as a non-fiscal incentive for financial institutions and in 2017, OJK launched the umbrella regulation on sustainable finance which requires Financial Services Sector (FSS) to implement sustainable finance principles, submit the Sustainable Finance Action Plan (RAKB) to OJK, as well as a Sustainability Report that must be published to the public. OJK Regulation on Sustainable Finance emphasizes awareness on sustainable finance principles, as well as a starting point for market exploration for sustainable project financing.

The conservation of biodiversity and maintenance of the environment has been acknowledged by the Government of Indonesia as the foundation of low-carbon development and the achievement of SDGs targets. Therefore, since 2014, the government has been developing instruments of ecological fiscal transfers to regions, fiscal incentives and funds (e.g., development funds, village funds). The Minister of National Development Planning has been reformulating these fiscal instruments in preparing a regulation that serves as guidelines for regional governments in developing regional planning and budgeting so that those development plans incorporate ecological concerns. However, this concept has yet to show optimal contribution to the preservation of biodiversity and the environment. The regulation aimed at improving the quality and fostering innovations of regional sustainable agriculture planning and budgeting of regional development based on sustainable agriculture that is in line with the Sustainable Development Goals.

This approach allows multistakeholder to participate in the arrangements. The concept also covering the fiscal arrangements focusing on strategic priority for agricultural sectors such as oil palm, rubber, coconut, cocoa, coffee, sugar and tobacco. The incentive will be given to local governments who have developed and implemented policies supporting sustainable agriculture using the KPI indicators. The government will award the local government with an incentive or an earmarked revenue to support the sustainable agriculture. The sustainable agriculture focuses on national regulations.

OJK will leverage the Green Taxonomy 1.0 to identify and develop the necessary incentive for financiers to help their clients meeting the green category on oil palm, cocoa and coffee that will scale up the business competitiveness. Through the Ministry of Environment and Forestry, the GOI recently issued a ministerial decree (Decree Number 168 of 2022) to set the target achieving net sink (net carbon sink) on Forestry and Other Land Use sector in 2030 in order to accelerate the NDC achievement. This regulation will cover the operational strategy of net-sink through halting deforestation, reducing forest and land degradation, enhancing carbon storage of natural landscape, restoration and sustainable management of peatland, etc., which would also impacted land-based soft commodities production.

The consultancy will provide OJK with recommendation on the identified options of market incentives to adopt the green taxonomy 1.0, in particular to promote the adoption of sustainable oil palm. In particular, it will be exploring the necessary incentive to compensate the cost incurred by implementing sustainable agriculture that adopts national and international recognized certification standard asked in the Indonesia Green Taxonomy 1.0 for certain sectors for oil palm. The study will also be taking into account the possibility of additional cost compensation (possibly through carbon economy as regulated by the Presidential Regulation Number 98 of 2021, regarding the provision of carbon valuation (carbon pricing) to accelerate the achievement of Indonesian NDC) that potentially will be designed through fiscal budget instruments and carbon crediting and payments mechanism in promoting sustainable oil palm and provide the incentive design recommendation.

Technical support
In-country technical advice on sustainable finance in relation to GGP and other sustainable land use activities of UN Environment

The specific objectives of the consultancy include:

• Developing a white paper on “Identifying Suitable Incentive Mechanism” to comply with the Indonesia Green Taxonomy 1.0 on Agriculture and Forestry Sector

• The study will become an initial baseline/recommendation to develop a more in-depth incentive mechanism for and enhancing finance flows towards sustainable agriculture


• Annotated workplan and preliminary report that includes overview of key feedback that was provided by public and private stakeholders during the consultation phase of the modification of Law 3001 by November 2022.
• Final report that details key recommendation for the Ministry of Environment to adopt in for the modification of Law 3001 and proposed fiscal incentives for the Government of Paraguay to consider in support of this amended law by December 2022.

1st deliverable- Briefing that provide recommendation on the suitability of the incentive mechanisms (market and regulatory). This will include the recommendations on the effective/ necessary incentive based on the market and/ or regulatory side are in place. (est. 15 pages)

2nd deliverable- Activity 3. Develop proposed (recommendations) of a roadmap to articulate the recommendation on suitable incentive mechanisms. The brief will provide key milestones and recommendations that needs to be in place in building the necessary incentive. (est. 15 pages)

The consultant shall be under the overall supervision of the Head of UNEP FI and report directly to the UNEP FI Signatory Programme Officer and Programme Officers-Nature. The consultant should take direction from the Programme Officer while final deliverables shall also be approved by Head of UNEP FI.

Qualifications/special skills

Academic: Bachelor’s Degree is required in one or several of the following areas: economics, finance, business administration, international relations, development studies or environmental management, or related areas.

Professional experience: At least seven years of work experience, working in sustainable finance either in the private sector, or an international or non-governmental organization working on environmental finance or environmental issues.

Special Skills & knowledge: The ideal candidate should have strong expertise in the integration of ESG criteria for the financial sector and previous experience in assisting banks in their integration efforts, either directly as a collaborator in a financial institution or as someone who has trained banks in the past. Knowledge of REDD+, zero deforestation commodity supply chains, and other landscape investments would also be an asset. Experience of coordinating or implementing projects within the UN system would be an advantage.


Languages: English is a working language of UNEP FI. Fluency in Spanish is a requirement for this position and proficiency in English is an asset.

No Fee


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