Globally, only four commodities drive the majority of deforestation: palm oil, soy, beef and wood products. The pulp and paper sector is one of the major wood products and risks contributing to tropical deforestation and other adverse impacts. The sector also has opportunities to develop more sustainable business models and production systems. Aidenvironment conducts analysis of the major sustainability risks and opportunities in Indonesia’s pulp and paper sector in order to contribute to the transformation of the sector.
Indonesia is a top 10 global producer of pulp and paper. The raw material for this industry primarily comes from industrial tree plantations (hutan tanaman industry or HTI). Industrial tree plantations are the second largest plantation sector in Indonesia after oil palm and cover more than 10 million hectares of land in Indonesia. Industrially grown trees are not only used for the production of pulp and paper, but also for timber products and energy generation.
Indonesia’s pulp and paper sector faces a number of sustainability challenges. These include deforestation, the degradation of peatland ecosystems and land conflicts with communities. Whereas deforestation rates in Indonesia have dropped markedly in recent years, the pulp and paper sector has not seen a transformation towards a No Deforestation, No Peatland, No Exploitation (NDPE) industry. Sustainability risks may turn into financially material business risks.
The Indonesian pulp and paper sector is dominated by a handful of large and influential corporate actors. These are vertically integrated actors that operate industrial tree plantations, pulp mills and paper factories. They also have substantial influence over their suppliers. At the same time, a number of other industrial tree plantation owners operate in markets outside of the pulp and paper sector. Aidenvironment investigates and monitors a set of the most influential companies that either have leverage to change the sector, and/or that face particularly salient sustainability risks.
Aidenvironment has started a project to promote pulp and paper sector transformation by
The project “Corporate Transformation in Indonesia’s Pulp and Paper Sector” is supported by the Good Energies Foundation.
Aidenvironment documents 133,000 ha of deforestation committed by ten timber companies in Indonesia and Malaysia since 2016, all connected to palm oil buyers, some with NDPE policies.
Praktik pelingkupan yang diselaraskan dengan TCFD. Laporan ini adalah bagian dari proyek berjudul “Transformasi Korporat di Sektor Pulp dan Kertas Indonesia”
A report on one of Indonesia’s largest deforesters
Sebuah laporan mengenai salah satu deforestasi terbesar di Indonesia
A TCFD-aligned scoping exercise
Just four pulp and paper companies in Indonesia were responsible for 11,000 hectares of forest clearing during 2021, analysis by Aidenvironment shows. The figure is similar to Indonesia’s 2020’s deforestation figures, when five companies were responsible for 13,000 hectares of ...
This piece is an op-ed by Aidenvironment palm oil expert Chris Wiggs Last week, I participated in the Innovation Forum webinar “Deforestation: is there too much focus on palm oil”. This piece is my own selection of highlights from the ...
The Sinar Mas group, owned by the Widjaja family, is one of the largest conglomerates in Indonesia. Its flagship companies Asia Pulp & Paper (APP) and Golden Agri-Resources (GAR) have no-deforestation commitments. However, some Sinar Mas companies are not under ...
Just three pulp and paper companies in Indonesia were responsible for around 4,700 hectares of forest clearing during the first half of 2021, analysis by Aidenvironment shows. The figure indicates Indonesia is on its way to matching 2020’s deforestation figures, ...
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