The Paris Agreement has significantly changed the global landscape of trade, business, and investment, leaning towards a greener and more sustainable business. This is not surprising considering the fact that the industry sector is an important actor in global carbon emissions. The data from IEA shows that globally, the industrial sector contributed to 31,7% of carbon emissions, followed by agriculture at 20%, transportation at 16%, other sectors at 25.3%, and constructions at 7%.

IBCSD understands that corporate decarbonization is not an easy task. It requires a shifting of mindset from the C-suites to all employees, an upgrade in technology, and a revolution in business pathways. In this documentation, you will find stories and practices of companies that are working on the mission to decarbonize their industry in various ways.

READ MORE IBCSD NET ZERO STORIES

 

adidas, a leading global sports brand, has partnered with IBCSD and other partners through Kadin NZH to encourage its suppliers in Indonesia to commit to Science-Based Targets Initiative (SBTi) as part of the commitment to achieving net-zero emissions.

Kadin NZH is a joint program between IBCSD, Indonesian Chamber of Commerce (Kadin), WRI Indonesia, CDP, and WWF, which aims to engage and support Indonesian businesses in achieving net-zero emissions by 2050.

In a recent Corporate Assistance Program held on May 8th 2023 in Serang, Indonesia, adidas engaged with 20 selected supplier facilities to provide them with a better understanding of how to map their emission sources and categorize them based on Scope 1, 2, or 3. The program also emphasized the importance of SBTi in achieving net-zero emissions.

Octavianus Bramantyo, representing Kadin NZH, expressed his gratitude for adidas’ collaboration and commitment to encouraging its suppliers to commit to SBTi. He acknowledged that the partnership between Kadin NZH and adidas is an important step towards achieving net-zero emissions.

adidas believes that creating a community for sustainability requires strong collaboration among stakeholders and Kadin NZH can serve as a platform for this collaboration, allowing stakeholders to share knowledge and work together towards a sustainable future. In addition, Kadin NZH program can provide Indonesian businesses with the necessary tools and resources to commit to SBTi and contribute to global efforts to achieve net-zero emissions. The program’s exclusive partnership with SBTi, WRI, CDP, and WWF can provide additional assistance to companies starting their net-zero journey.

 

adidas emphasizes that committing to net-zero is not just a way for companies to showcase their sustainability efforts, but it also provides significant benefits for businesses. Investors are increasingly looking for companies that are committed to net-zero, which can offer a competitive advantage in the long run.

adidas’ partnership with Kadin NZH and IBCSD is a significant step towards achieving the company’s net-zero emissions goals. Through this collaboration, Adidas is empowering its suppliers in Indonesia to take action towards sustainability and contribute to global efforts in achieving net-zero emissions. The involvement of IBCSD in this collaboration highlights the importance of engaging businesses in sustainable practices and policies in Indonesia.

 

The private sector plays an important role in the transition to a net-zero economy. At the global level, the number of companies committed to net-zero emissions by 2050 is increasing significantly. It is expected that more and more companies at the national and sub-national levels will also commit to making the transition to net-zero.  

To increase the participation and synergy of businesses at the sub-national level in the journey towards a zero carbon economy, IBCSD together with the Indonesian Chamber of Commerce and Industry (Kadin), World Resource Institute (WRI) Indonesia, CDP, and WWF Indonesia through the KADIN Net Zero Hub (NZH) held a Ramadan Iftar Business Forum with the theme Raising Awareness and Capacity of Industries in the Region Towards Carbon Neutral 2050 at Novotel Semarang on Wednesday, April 12, 2023.

“Companies must start to be prepared in setting net-zero targets together. Through this event, members of KADIN Central Java and companies in Central Java can get to know the NZH platform and can become a forum for exchanging information about net-zero,” said Chairman of KADIN Central Java, Harry Nuryanto, in his remarks at this event.

Head of KADIN Net Zero Hub, Muhammad Yusrizki, said, “Today, we are already at 1.1°C from the maximum temperature increase limit of 1.5°C, so we need to immediately work towards net-zero using Science Based Targets (SBT). Investment institutions and banks have also started to encourage investment in companies that are transitioning to net-zero, so companies in Indonesia need to go there too. KADIN NZH is ready to help with this transition.”  

“We need to spread the message to the industry to encourage more companies to make the transition to net-zero, because the positive effects on the planet will be felt when more industries do so,” said WRI’s Net-zero Specialist, Tatwadhika R. Siddharta. “Transitioning to net-zero can make companies resilient to potential risks to the business in the future,” he continued.

CDP’s SBT Engagement Manager, Dedy Mahardika said, “Based on previous studies, it is known that net-zero transition efforts made by companies can increase company profits in the long run.” This shows that net-zero efforts are also economically beneficial.

“We would like to invite companies in the region to come together through KADIN NZH,” said IBCSD Program Development Manager, Aloysius Wiratmo. He continued, “KADIN NZH serves as a forum to assist companies in Indonesia to achieve net-zero targets by providing a number of programs to increase industry awareness and capacity.”

The event was also attended by members of KADIN Central Java and a number of companies in Central Java. With this event, it is hoped that there will be more companies in the region that are committed and synergize together in realizing net-zero in Indonesia.

The private sector plays an important role in Indonesia’s decarbonization efforts. The graduation of 10 companies from the Corporate Assistance Program under the auspices of the KADIN Net Zero Hub (NZH) is the first evidence of the private sector’s commitment to help Indonesia achieve its target of reducing carbon emissions by 43.2 percent by 2030.

“Through the KADIN Net Zero Hub Corporate Assistance Program, 10 champion companies have been incubated to be able to develop targets and commitments based on SBTi,” said Shinta W. Kamdani, Deputy Chairperson of the Coordinator for Maritime Affairs, Investment and Foreign Affairs in her remarks at the KADIN NZH Corporate Assistance Program (CAP) Graduation event which took place in Jakarta, on Tuesday, February 28, 2022.

The event was an appreciation event for companies that have completed the Corporate Assistance Program (CAP) under KADIN NZH. CAP is a 5-month intensive technical assistance program to help companies inventory and calculate greenhouse gas (GHG) scope 1, 2, and 3 emissions and commit to net zero. Scope 1 is direct emissions, scope 2 is indirect emissions from company consumption, while scope 3 is other indirect emissions generated in the company’s value chain.

CAP facilitates training, 1:1 consultations with mentors, industry best practice sharing sessions, pre-assessment, and guidance and tools that have been adapted to the Indonesian context.

“Many companies in Indonesia have done good sustainability practices. We hope that NZH and CAP can facilitate the good to become great, because they adopt internationally recognized science-based GHG accounting protocols and net zero emission targets,” said Nanda Noor as Sustainable Business & Corporate Engagement Manager of WRI Indonesia.

KADIN Net Zero Hub, which was launched in November 2022 at B20, is KADIN’s real effort in encouraging more private sector involvement in decarbonization. KADIN Indonesia collaborates with WRI, CDP, and IBCSD as key partners to develop KADIN NZH as a platform to build strategic partnerships and accelerate the net zero ecosystem in Indonesia.

“KADIN Net Zero Hub was established to help companies plan, implement, and report concrete actions in achieving net zero, one of which is through the Corporate Assistance Program (CAP) program that we are celebrating today. With this KADIN NZH platform, we hope that Indonesian companies can achieve net zero,” said Octavianus Bramantya as a member of the KADIN Net Zero Hub team.

In the CAP program, companies are assisted to adopt several international standards such as the GHG Protocol and Science-Based Targets Initiative (SBTi) framework. These targets are used to ensure that all company climate actions have a strong science base and are aligned with the 1.5 C pathway so as to reduce the possibility of worse impacts from the climate crisis.

“SBTi is a standard that has been used globally by more than 4,600 companies from various sectors. By aligning science-based emission reduction targets through SBTi, companies in Indonesia can not only contribute to climate change, but also open up various business opportunities and increase competitiveness with peers in the region and related sectors,” said Dedy Mahardika as SBT Engagement Manager, SEA and Oceania from CDP.

The companies that have completed the CAP program recognize that this mentoring is very important for the private sector in Indonesia. The ten companies are PT Ever Shine Tex Tbk, PT Pan Brothers Tbk, PT Chemstar Indonesia Tbk, PT Avia Avian Tbk, PT Omega Mas, PT Buana Triarta, PT Honicel Indonesia, PT Samora Usaha Makmur, PT Indo Oil Perkasa, and PT Hakiki Donarta. Among the 10 companies, there were 4 companies that successfully delivered science-based net zero commitments, namely PT Pan Brothers, PT Samora Usaha Makmur, PT Honicel Indonesia, and PT Ever Shine Tex. In addition, PT Indo Oil Perkasa as an MSME has successfully submitted a net zero target to be validated by SBTi.

“Both markets and investors are turning to businesses that are ambitious about climate change because it not only reduces environmental and social impacts, but also ensures the future viability of the business itself. By joining NZH, companies can get direct assistance to develop and initiate strategies in achieving climate targets, especially towards net zero,” said Indah Budiani as Executive Director of IBCSD.

Going forward, NZH Chamber of Commerce will continue the CAP program to help more companies reduce their carbon emissions. Currently, 80 companies have expressed interest and 68 of them have signed a memorandum of agreement to join KADIN NZH.

Below are excerpts from the companies that have joined the CAP program under KADIN Net Zero Hub:

Michael Sung, Director of PT Ever Shine Tex Tbk: “NZH CAP helps us to analyze more deeply our emissions from our production process and supply chain. The clarity helps us to adjust our strategy both from energy efficiency, renewable energy and procurement, to go net zero.”

Erik Hendra, Manager of PT Buana Triarta: “In accordance with our company’s vision and mission, which is to become an ambassador for Indonesia’s forestry resources by maximizing the added value of forestry products through good business operations and an integrated supply chain and ensuring business and industry sustainability through market research and creative product development, we fully support the Net Zero Hub program and contribute to reducing carbon emissions as a sense of our concern for the sustainability of the ecosystem which is currently under repair.”

Tanu Yota, Center of Technical & Technological, Excellence Director and Business Unit Head of Samora Group: “As something new, the knowledge of Samora Group’s Net Zero Carbon (NZC) team still needs to be scaled up to all subsidiaries. Learning from the CAP attended by the NZC Corporate team, Samora Group is consulting with KADIN Net Zero Hub so that internal training can be facilitated for all NZC teams in all our subsidiaries. So that the NZC program can be successful.”

Wenty Rasjid, Corporate Secretary of PT ChemStar Indonesia Tbk: “As one of the textile chemical manufacturers in Indonesia, PT. ChemStar Indonesia Tbk. sees that climate change is one of the challenges that the world is facing. One of the causes of climate change is GHG emissions produced by the industrial sector. Therefore, PT ChemStar Indonesia Tbk. is encouraged to commit to net-zero to reduce carbon emissions. With the assistance and guidance through KADIN NZH CAP, PT ChemStar Indonesia Tbk. has started to calculate the company’s carbon footprint and develop a strategy to reduce it.”

  

***

Contact:

Sakinah Ummu Haniy, Senior Communications Coordinator WRI Indonesia, [email protected], +62-813-8343-5507

Fitriannisa Soegiharto, Communications Manager CDP, [email protected], +62813-8095-9299

Nurina Izazi, Communication Manager IBCSD, [email protected], +62-813-3261-4268

Do you know how significant your company’s carbon impact is? Do you know how to reduce your emissions? Governments and businesses must take immediate action in the next few years to decrease greenhouse gas emissions to zero. This is in conformity with the Paris Agreement, a historic worldwide agreement to reduce emissions of greenhouse gases in order to limit the global temperature rise to 1.5 degrees Celsius and avert the worst effects of climate change. Therefore, either governments or businesses must assess and control emissions from value chains, private and public sector activities, goods, and other regulations to enable the ensuing GHG reductions. Understanding your GHG footprint is the first step toward climate control. Here are the details.

What exactly is GHG accounting?

GHG accounting, often known as carbon calculation, is the process of determining the total greenhouse gas (GHG) emissions and removals produced directly and indirectly by company or organizational operations. The World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) developed GHG as an international standard for estimating and reporting corporate emissions by classifying GHG into Scope 1, 2, and 3 according to the source.

The GHG Protocol serves as a guide to help governments and businesses reach net zero by providing comprehensive and global standards for accounting, reporting, sector guidance, accounting tools, and training in managing and reducing emission levels based on reports that identify a climate change action agenda.

What are scopes 1, 2, and 3? 

The following greenhouse gas (GHG) emissions are categorized into three scopes by the GHG Protocol, which are the most widely used guidelines for carbon accounting: 

Scope 1: Direct Emissions 

These emissions are produced directly from facilities that your business owns or controls. Examples include emissions from the combustion of fuel used in vehicles, combustion owned or controlled by boilers, and emissions from the synthesis of chemicals used in manufacturing. 

Scope 2: Indirect emissions

These emissions are caused by the services you use to operate your company. Consider the amount of power, gas, steam, heating, and cooling used by the company as an example. 

Scope 3 – Other indirect emissions

These emissions result from activities that are not carried out directly by the company but whose sources are related to your company’s operations. Scope 3 emissions are also known as value chain emissions. These scope 3 emissions are not under the direct control of the business, but organizations can influence activities that can produce these emissions by involving many stakeholders and other businesses throughout the value chain. Upstream emissions and downstream emissions are also divided into 2 categories.

• Upstream emissions

Upstream emissions that occur from pre-production to before processing, such as employee or business trips from the organization, Upstream emissions include 8 categories, namely purchased goods and services, capital goods, fuel, and energy. Upstream transportation and distribution, waste accumulated in operations, business travel, employee commuting, and upstream leased assets

• Downstream emissions

These downstream emissions occur during post-production, or after the product leaves the company, such as distribution, product use, and product lifestyle. Downstream emissions include 7 categories, downstream transportation and distribution; the processing of sold products; use of sold products; end-of-life treatment of sold products; downstream leased assets; franchises; and investments.

The shift to clean zero is a catchphrase that has captured the attention of the corporate world. Many businesses believe it is impossible to do so while preserving profit margins. It would be advantageous for businesses to begin working on emission reduction today. Climate change has the ability to dramatically alter habitats, which serve as living beings’ natural homes.

According to Weforum.org’s “getting real” study, businesses are successful when they dare to address this issue with the more ambitious goal of reducing emissions throughout the whole spectrum of activities required to supply their product or service. Therefore, these are the crucial steps to becoming a net-zero business.

 

• Begin calculating and evaluating emissions

The first step in becoming a net zero business is to quantify and identify emissions from your whole business value chain, including operations, supply chain, and investment portfolio, in order to establish a baseline for planning and setting emission reduction objectives. The GHG Protocol divides a company’s emissions into three scopes: Scopes 1, 2, and 3. For some businesses, “scope 3” is the main source of emissions. Companies must take prompt action to minimize scope 3 emissions. Based on an analysis of your company’s emissions, you may then target short- and long-term science-based zero-zero and net-zero initiatives.

• Set a net zero target

In October 2021, the Science Based Objectives (SBTi) initiative launched a new Net-Zero Standard to help businesses set verifiable, scientifically sound net-zero targets to guide net-zero strategy. To achieve net zero, a long-term goal of 90-95% reduction in emissions by 2050 is required, with the remaining 5-10% of emissions that cannot be eliminated being offset by carbon sequestration. Meanwhile, short-term aims include lowering emissions over the next 5-10 years or halving emissions by 2030. These short-term targets assist businesses in attaining their net zero emission targets without the use of carbon offsets or other forms of carbon credits. This action can immediately lead to significant reductions in emissions, leading to a future with zero emissions.

• Reduce your carbon footprint

Reduced emissions are critical to achieving net zero business. You may accomplish these emission reductions across your business’s value chain by improving energy efficiency, increasing stakeholder engagement, using renewable energy, and investing in business transformation. Businesses can minimize their carbon footprints in a number of ways, from basic activities like recycling.

• Offsetting residual emissions

To achieve net-zero emissions, we must reduce emissions by 90-95%; the remaining 5-10% must be gradually offset with carbon-removal activities. Discover which projects you can support as new carbon sinks and begin offsetting alongside emission reductions. These initiatives help not just the environment but also co-benefits such as biodiversity preservation and community support, both of which are part of the UN Sustainable Development Goals. One carbon credit is equal to one tCO2e saved or absorbed, which may lead to one tCO2e of emissions.

A company’s performance can be assessed by how much it contributes to environmental sustainability and the well-being of the community in which it operates. According to Gray et al. (1995), businesses should take their social and environmental obligations more seriously to support the work they have done in these areas. This will assist the company in gaining the community’s trust and support, which will have a positive impact on the community. Furthermore, excellent corporate governance, as promoted by the Institute for Corporate Directorship (IIDC), plays a vital role in the company’s success.

Sustainable-based investment, often known as environmental, social, and government (ESG), is on the rise. ESG highlights the relevance of sustainability in all of the company’s business activities. The practice and application of this ESG score assist investors in making capital market transactions. Investors will look at the company’s environmental performance indicators as evidenced in its activity reports and their influence on the environment, such as carbon emissions, greenhouse gas emissions, renewable energy, and others. Furthermore, the company’s social performance measures, such as environmental welfare and discrimination, are as clear as its governance indicators on stakeholder relationships. Businesses should disclose the findings of these three metrics transparently to prevent risky investments. Therefore, organizations need to pursue this path and integrate ESG into their operations and practices.

 

Companies’ Benefits and Risks

A vast number of companies and countries throughout the world have now made zero promises. However, many governments and businesses are concerned about an uneven transition to net zero. This will give less time to adapt to, build, or finance the essential green infrastructure and technology. According to the 2022 global risk report, the number one risk over the next decade is the failure of climate action, or physical danger, such as an increase in the frequency and severity of extreme weather. Of course, this erratic transition will exacerbate the risks and have an impact on the company’s ability to conduct business, triggering economic volatility and disrupting the financial system. This is anticipated to have the biggest impact on carbon-intensive industries, their businesses, and the supply chain. 

By mid-century, the transition of the global economy to net zero emissions will have high upfront costs. It will require $275 trillion in cumulative global capital expenditures, or about 7.5% of global GDP over the period 2021–2050. The McKinsey researchers state that it will start as a push to net zero, with physical asset spending rising to 8.8% of GDP between 2026 and 2030.

Achieving net zero emissions would probably involve high electricity costs. This will depend on how big the rise is and how long the transition is managed. If businesses do not switch to sustainable energy sources, unchecked climate change could have a negative impact on productivity, economic production, and growth.

 

Now is the time to act.

The path to net zero is a long and challenging one. There are several advantages for your company and the environment. “Going clean” provides advantages; 

1. Cleaner and healthier air
2. Improve our quality of life 
3. Protecting the environment
4. Mitigating climate risk
5. Boost efficiency, cut costs, and promote innovation
6. Potentially enhances revenues and profits by supporting clients in decreasing their carbon impact

According to the CDP, businesses could potentially earn $2.1 trillion in economic benefits from pursuing commercial opportunities associated with climate change. These include increased income from the demand for low-emission products and services, as well as changes in customer attitudes. If your business has SBTi-certified science-based objectives, you could highlight to stakeholders that your net-zero ambitions are credible.

 

IBCSD recently conducted a Coaching Clinic for the KADIN Net Zero Hub to assist the signatory companies’ initiative toward net zero. The Greenhouse Gas Accounting Training is part of the facilitation of a coaching clinic that is exclusively offered to signatories to emphasize their awareness of calculating GHG emissions in the business operations of each sector and company before setting the Science Based Target Initiative.

 

During the session, 10 companies joined the coaching clinic, including PT Hakiki Donarta, PT Chemstar Indonesia, PT Honicel Indonesia, PT Surya Biru Murni Acetylene, PT Pan Brothers, PT Ever Shine Tex, PT Asia Pacific Rayon, PT Riau Andalan Pulp Paper, PT Buana Triarta, and PT Omega Mas. 

 

KADIN NZH is a platform to build partnerships that support Indonesia’s net zero ecosystems by helping companies plan, develop, implement, and disclose their corporate mitigation actions. IBCSD, as the secretariat of KADIN Net Zero Hub, collaborates with Dedy Mahardika as a representative of CDP Asia Pacific as a knowledge partner to support this coaching clinic. 

 

Are you interested in joining KADIN Net Zero Hub?

Please reach out to [email protected].

Climate change has become a life-threatening global emergency in the last three decades. According to scientists, the world’s temperature will increase by 2.7 degrees Celsius this century. It is creating a significant increase in global temperatures that causes natural disasters and massive damage in this planet. Climate change, as the emerging issue at UNFCCC COP26 in Glasgow, has encouraged countries and businesses to pledge an ambitious target to limit global warming to 1.5 degrees Celsius.

There is still much work to be done in terms of implementing a net zero emissions target. As of February 2021, over 110 businesses that directly utilize substantial amounts of energy or manufacture things that consume energy had declared net-zero emissions objectives or targets. This is a sharp rise from previous years. Each stakeholder has unique advantages and roles that, when combined, constitute crucial capital for low-carbon development.

Then, what exactly is Net Zero Emission? Here is the explanation: 

What is “Net Zero Emission”?

Net Zero Emissions refers to the condition of achieving a balance between greenhouse gas emissions produced by human activities and greenhouse gas emissions released from the atmosphere as a carbon removal process. To achieve this, a transition from the current energy system to a clean, zero-energy system is necessary. 1 

The term “net zero” is important because it denotes the point at which global warming comes to an end. Emissions produced by humans should be fully absorbed by the earth’s ecosystem. The Paris Agreement requires countries and companies to strike a balance between anthropogenic emissions by source and their absorption by greenhouse gas sinks.

It’s important to remember that emissions generated by human activity, such as the use of fossil fuels in production and transportation, should be reduced as quickly as possible to zero. Therefore, nothing evaporates into the atmosphere and creates greenhouse gases. The remaining greenhouse gases are offset by an equivalent quantity of carbon removal, which may be accomplished by doing things like planting more trees, preventing deforestation, preventing land degradation, conserving marine ecosystems, and using direct air capture and storage technology (DACS).

What is an example of achieving net zero emissions?

Countries have issued new regulations in terms of providing electrical energy that is adapted to the NZE program. The IESR report on Deep Decarbonization of Indonesia’s Energy System: A Pathway to Zero Emission by 2050 shows that the energy sector (power generation, Transportation, and industry) can achieve zero emissions by 2050 because it has technical and economic feasibility. With four fundamental pillars—renewable energy, electrification, a reduction in the use of fossil fuels, and clean fuels—that act as a road map. The study also projects that the electricity sector will become the first sector to be carbon-free by 2045 by utilizing renewable energy sources and battery technology. In this way, it is possible to reduce GHG emissions by at least 70% by 2050.

Reducing global carbon dioxide (CO2) emissions to net zero by 2050 is a consistent effort to limit the long-term increase in the global average temperature to 1.5 degrees Celsius. We still have time to prevent the worst consequences of climate change and build a future where everyone is safer. On the bottom line, a net zero future is achievable.

Sources : 

• https://www.wri.org/insights/net-zero-ghg-emissions-questions-answered

• https://www.climatecouncil.org.au/resources/what-does-net-zero-emissions-mean/

• https://netzeroclimate.org/what-is-net-zero/

• https://www.forestdigest.com/detail/1137/apa-itu-net-zero-emissions

https://ppsdmaparatur.esdm.go.id/seputar-ppsdma/berkenalan-dengan-net-zero-emission

climate change adaptation and mitigation among private sector, the Indonesia Business Council for Sustainable Development (IBCSD) and the Indonesian Chamber of Commerce and Industry (KADIN) collaborated in conducting a virtual webinar “What net zero emission means for the private sector” (14/12). This event is part of a bigger IBCSD initiative entitled  “Towards Net Zero Emission” to encourage business leadership and collective action in initiating a concrete long-term plan toward a low-carbon economy and net zero emission by following the government’s goals.

Following the Paris Agreement, which was revisited at COP26, the number of companies declaring their commitment to net-zero emissions and taking action to tackle climate change has tripled globally. At least one of the world’s five largest publicly traded companies has committed to zero net emissions by 2050.[1]

In her remarks as the President of IBCSD, Shinta W Kamdani stated, “As we all know, Indonesia is striving for low-carbon economic development by expanding measures to mitigate and adapt to climate change. To achieve net zero emissions by 2050, in line with global business trends and national targets, IBCSD and KADIN will work together to raise public awareness and understanding of the necessity of the NZE transition, promote business leadership and collective action, and collaborate among diverse stakeholders. The discussion today is intended to be one of the milestones that contribute to the private sector managing Net Zero Emissions in order to establish a sustainable economy.”

In her remarks at the Webinar “Journey Towards Net Zero Emission (NZE): What Does NZE Mean for Private Sector?” which was held virtually by IBCSD (13/12), the Director-General of Climate Change Control, Ministry of Environment and Forestry, Ir. Laksmi Dhewanti, MA explained, “Through the Nationally Determined Contribution (NDC) target, Indonesia has committed to reducing GHG emissions by up to 41% by 2030 with the support of international partnership. Indonesia’s unconditional target of 29 % NDC has been dispersed to five key sectors, including forestry and other land uses, energy, waste, industry process, and agriculture. The most significant contributors to the NDC objectives are the forestry and energy industries. The Long-Term Strategy on Low Carbon and Climate Resilience (LTS-LCCR) was developed with a long-term policy strategy in mind until 2050. This document provides guidance on how to set NDC and policy reform goals in light of current developments and demands. In essence, this endeavor is not just the responsibility of the government, but it also emphasizes the importance of all stakeholders’ contributions. As a result, we encourage the participation of various stakeholders, particularly the private sector in the implementation of the NDC and the climate change mitigation and adaptation strategy. More collaboration and networking hopefully will occur as a result of this event to meet NDC goals.”

 

As for several steps that have been taken by the government for low-carbon development, the Director of the Environment of the Ministry of National Development Planning/BAPPENAS, Ir. Medrilzam stated “Currently undergoing a green economic transformation is based on the premise of low carbon development. According to the Bappenas scenario, the green economy is expected to increase per capita income by about 6% in Indonesia Emas 2045. Indonesia will need massive investments of around 3-5% of GDP every year from now on to achieve the NZE. The government will be unable to finance all of them. As a result, the government provides fiscal tax incentives and import taxes for New Renewable Energy (NRE) Developers, as well as non-fiscal incentives like as license liberalization and prizes, to encourage private sector economic engagement. However, there are still risks of stranded assets, planning for green employment migration, and knowledge and innovation transfer. Indonesia will only become a market for technology from wealthy countries if we do not significantly innovate on technology.

On the same occasion, Executive Director of Institute for Essential Services Reform (IESR), Fabby Tumiwa added, “Business may implement four solutions; the first of which is to reduce reliance on fossil fuels through RNE, electrification, and the use of clean energy sources in response to increasing emissions from the sector. If we want to attain Net Zero Emissions by 2030, renewable energy should account for at least half of the primary energy supply. As a result, companies should conduct an inventory of their contribution to greenhouse gas emissions, set explicit objectives, and provide measurable transparency of target performance to the public in order to match the corporate NZE aim with the Paris Agreement target in 2030.”

Seeing this, Regional Lead – Commit to Action (CTA) Carbon Disclosure Project (CDP), Amelia Tan said, “In order to attain NZE, businesses must have science-based targets, both short and long-term by making adjustments in terms of emission residual mitigation and neutralization. The Science Based Target Initiative (SBTi) will assists your business in determining how much and how rapidly it can cut greenhouse gas emissions while also driving actual action in its operations. The International Sustainability Standard Board (ISSB) has produced financial reporting sustainability disclosure requirements that have been incorporated with state and stakeholder regulations referencing the SBTi.”

Apart from the government, a low-emissions transition also needs to be carried out by the private sector. Head of Commission on Climate Change KADIN, Dharsono Hartono explained “The issue of Net Zero Emission isn’t going away anytime soon. KADIN has 7 priority focusing on decarbonization of diverse private sectors to support the Presidential Decree on the Economic Value of Carbon, which is based on the NZE objectives of countries and businesses. One of them by concentrating on restoration and conservation initiatives which represents a significant potential for Indonesia. We believe that Indonesia has 300 billion tons of CO2 stored, which might be the country’s entry point into the carbon market. In this context, KADIN has begun to carry out many activities as a government business partner, including webinars, working on the sale of domestic carbon credits that can assist the government in meeting NDC objectives, and pushing for public-private partnerships.”

Joining the session as discussant, Azis Armand, Vice President and Group CEO of Indika Energy explained “Indika, as a holding company with an 80% coal energy portfolio, considers the crucial need to decarbonize its operations and portfolio to decrease its carbon footprint. Indika focuses on transferring energy to solar panels and mobile combustion fossil fuels to electric automobiles in its operations. Indika has divested high-carbon assets and invested in low-carbon economies in our asset portfolio. We believe Indika can reach net zero emissions in 2050 by achieving a 20% decrease in emissions in 2025 and a 40% utilization of renewable energy technologies in 2030.”

Meanwhile Deputy Director of APRIL Group’s Sustainability and Stakeholder Engagement, Dian Novarina shared, “With four pillars, the APRIL Group aspires to move to NZE by 2030. One of these is a positive climate target that includes net zero emissions from land usage, increasing the use of renewable energy in fiber operations to 50% and mill operations to 90%, and decreasing carbon emissions in all products to 25%. All APRIL 2030 commitments have precise indicators that make them measurable, auditable, and transparent.”

Desi Anwar, the webinar moderator concluded 2050 Net Zero Emission is a collective goal to which all stakeholders must commit in energy transition plan, collaborate in innovation, technology, and investment, and transparent reporting as well as calculations. Net Zero Emission is not only the responsibility of one corporation or one country, but of the entire globe as residents of the planet.

 

Rewatch the discussion here: A Journey Towards NZE: What does NZE Mean for Private Sector?

For further the webinar video, please access https://rebrand.ly/VideoNZE2021

To download the material, please go through https://rebrand.ly/MateriNZE2021