Along with the company’s commitment, the government, in this case the Ministry of Industry through the Green Industry Center, also supports the net zero ambition. “Industry needs to immediately make decarbonization efforts due to climate-related risks and disasters that can disrupt the supply of raw materials, as well as due to demand from the market and regulations that encourage a more environmentally friendly industry,” said Andalia Gustari as Functional Industry Supervisor of the Green Industry Center of the Ministry of Industry.
“Significant steps through the Enhanced Nationally Determined Contribution increase Indonesia’s emission reduction target from 29% to 31.99%,” as stated by Dharsono Hartono, as Chairman of KADIN NZH in his remarks at the KADIN Net Zero Hub Corporate Assistance Program Graduation Batch 2 event which took place in Jakarta, on Monday, November 27, 2023. He continued, “Industrial decarbonization can be achieved with high commitment. The Kadin NZH Corporate Assistance Program was created to provide a forum for training and realization of decarbonization commitment.”
The event aimed to recognize companies in the adidas supply chain that successfully completed the Corporate Assistance Program (CAP) under the KADIN NZH. CAP is a 5-month intensive technical assistance program aimed at helping companies identify and quantify greenhouse gas (GHG) emissions in scopes 1, 2, and 3, while committing to net zero. CAP facilitates training, 1:1 consultations with mentors, industry best practice sharing sessions, pre-assessment, and guidance on the use of tools that have been adapted to the Indonesian context.
“There are 20 companies in the adidas supply chain incubated through CAP batch 2, consisting of industries in the apparel, footwear, finished goods (bags and balls), and raw materials sectors,” said Clorinda Wibowo, Senior Manager of WRI Indonesia. “From these 20 companies, there is a potential carbon reduction of 3.5 million tons of CO2 in 2035 from Scope 1-3. This is a huge impact that we can be proud of our efforts,” she continued.
The launch of KADIN Net Zero Hub in November 2022 at B20 shows the real commitment of Kadin Indonesia in encouraging more private sector participation in decarbonization efforts. KADIN Indonesia collaborates with WRI Indonesia, CDP, IBCSD, and WWF Indonesia in the development of KADIN NZH as a platform to form strategic partnerships and accelerate the development of the net zero ecosystem in Indonesia.
Within the framework of the CAP program, companies receive support to integrate several international standards, such as the GHG Protocol and Science Based Target Initiatives (SBTi). The purpose of implementing these standards is to ensure that all the company’s climate actions are based on a solid scientific basis and in line with the 1.5 degree Celsius pathway, so as to reduce the potential for more severe negative impacts from the climate crisis.
“After committing to SBTi, companies have 24 months to validate the target. During this validation process, companies need to develop several criteria and ensure the target ambition is in line with the 1.5 degree Celsius decarbonization pathway, submit it to SBTi for formal validation, communicate the target to other stakeholders, and finally, disclose to SBTi,” said Ingo Hauter, Account Manager (Reporter Services & Supply Chains) at CDP. “Currently, the trend to disclose to SBTi is growing rapidly in Southeast Asia,” he added.
“The key to achieving net zero targets requires an appropriate strategy,” said Rizkia Sari Yudawinata, Sustainable Finance Program Lead, WWF Indonesia. “After reporting and disclosure, companies need to implement a net zero strategy, one of which can be accelerated by a climate transition financing plan. Rizkia also mentioned the need for companies to seek access to funding through sustainable financing, which has now been developed by various financial institutions.”
The support from KADIN NZH and its program partners in assisting companies towards net zero is welcomed by companies that have joined and completed the CAP program.
“It started as a simple reason to join the NZH Chamber of Commerce, since our company does not produce a very significant amount of emissions, and our factory has a large roof that is suitable for installing solar panels. As time goes by, everyone is complaining about the earth getting hotter. As a company, we have to take action and this is our chance to commit to net zero,” said Rahardrian Prananditya, Corporate HSE & Sustainability Department Head of PT Apparel One Indonesia.
“This program can help improve efficiency. We have opportunities and potential improvements to make our production system more efficient. We can also find out where the biggest sources of emissions are, so that we can make the right strategies to reduce these emissions,” said Semuel Izaac L., SEA-Labor & HSE Manager of PT Tah Sung Hung.
Going forward, NZH Chamber of Commerce is committed to continue developing the CAP program to support more companies in reducing their carbon emissions. Currently, 81 companies have officially joined KADIN NZH by signing a memorandum of agreement.
It is hoped that more companies will join to support Indonesia’s net zero ambition. “Today’s markets and investors are increasingly interested in businesses that emphasize their commitment to climate change. This not only has a positive impact on the environment and society, but also ensures future business continuity. By joining NZH, companies can get direct support in designing and implementing strategies to achieve climate change targets, especially towards net zero,” said Indah Budiani, Executive Director of IBCSD.
Find out more about the event in this post-event summary!
