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.
Please reach out to us if you are interested in:
A report on one of Indonesia’s largest deforesters
Sebuah laporan mengenai salah satu deforestasi terbesar di Indonesia
A TCFD-aligned scoping exercise
Aidenvironment recently released a report with Chain Reaction Research on the outsized impact of South Korean companies on the palm oil leakage market. The report reveals top South Korean buyers of palm oil do not have NDPE commitments. It finds ...
Amsterdam, 16 March 2021. One of Indonesia’s largest companies, the Royal Golden Eagle (RGE) group, is connected to 9,400 hectares of deforestation in 2020. RGE is among Indonesia’s largest companies in palm oil, pulp, paper and textile fibers. It claims ...
A recent report by Aidenvironment sheds light on one of Indonesia’s largest deforesting companies. Since 2016, the Nusantara Fiber group has converted 26,000 hectares of forest, an area larger than Amsterdam, into industrial tree plantations. It has been found that ...
This introduction is part of Aidenvironment’s project “Corporate Transformation in Indonesia’s Pulp and Paper Sector” that aims to stimulate the sustainable transformation of key pulp and paper companies through monitoring, research, and engagement. We will launch the project website on ...
