Meanwhile, April Group, a member of the RGE group of companies, has chosen to focus on biodiversity. April announced on Oct 10 a five-year collaboration with the International Union for Conservation of Nature (IUCN) to expand conservation science and pilot a private sector guide to protecting species and ecosystems.
The Indonesian government has committed to restore up to 12 million ha of mineral soil and 2 million ha of peatlands, aiming for the nation’s Forestry and other Land Use sector (Folu) to be a net carbon sink by 2030.
The aim is for Indonesia’s natural system to absorb more carbon dioxide from the atmosphere than it releases, effectively removing emissions.
Speaking at APP’s launch event, Indonesia’s ambassador to Singapore, Suryo Pratomo, says his country is the second-most biologically diverse in the world after Brazil, rattling off a list of numbers about Southeast Asia’s most populous nation.
See also: Global investors are pouring more money into climate tech
“Forests cover more than half of our total land area, of which 50% are primary forests, the most biodiverse and carbon-dense type,” says Suryo, a former journalist who was appointed ambassador to Singapore in 2020. “Indonesia is also home to the world’s largest area of mangrove ecosystems and tropical peatlands, which can store up to 20 times more carbon [than] tropical rainforests. More than 20% of the world’s mangrove area is in Indonesia, and Indonesia hosts 36% of the world’s tropical peatlands.”
Along with the US$300 million commitment, APP launched a call for partnerships to scale forest conservation and restoration in Indonesia under its Forest Positive Policy, or FPP.
To achieve the unprecedented 1 million ha conservation target, APP’s sustainability committee chairman Bernard Tan welcomes “NGOs and research institutions to financiers, customers, standard-setters and policymakers” to work with the company. “We need technical partners for landscape conservation, operational partners to execute on the ground and financial partners to scale and speed up conservation and restoration.”
See also: ABC Impact, DBS, UOB partner on US$110 mil sustainability-linked subscription loan facility
Tan, a former Brigadier-General in the Singapore Armed Forces and later chief marketing officer of ST Engineering, adds: “Large-scale projects in Indonesia are more feasible now than ever before, thanks to the enabling frameworks the government has put in place. There’s a recognition now that there is real value in preserving nature — carbon markets and innovative financing mechanisms have the potential to be big enablers in this respect.”
APP has a storied history with Singapore. In 2015, its paper products were temporarily banned by companies like supermarket chain NTUC FairPrice after APP — along with parent Sinar Mas — failed to prove they were not behind forest fires in Indonesia that led to a regional haze.
The transboundary haze had pushed the 24-hour Pollutant Standards Index (PSI) level in Singapore into the hazardous mark and even triggered school closures.
Tan, who is fluent in Bahasa Indonesia, joined APP in 2017. Among his tasks was to convince Singapore stores to restock APP products; he succeeded in 2019, though Indonesian media linked another bout of haze-producing forest fires in September that year to APP and April.
In his opening remarks on Oct 8, Tan says there is a strong “moral case” for APP’s new sustainability platform. “If we do not take the lead, who will?”
The business case
In a subsequent panel discussion held under Chatham House rules, one speaker noted a move from the agriculture sector’s long-established “doing no harm” commitments — like APP’s 2013 “No Deforestation, No Peat and No Exploitation” (NDPE) pledge — to a recent push to “doing more good”.
To stay ahead of Singapore and the region’s corporate and economic trends, click here for Latest Section
However, as the recent green wave among corporate and governments gets drowned out by concerns over international trade and geopolitical tensions, this panellist calls for the industry to “push yourselves to go further”.
“The wind around sustainability has severely changed even in the last 12 months. That, of course, has to do with geopolitics, with economic uncertainty, with trade and all these topics that are now filling the conversations in boardrooms.”
Conservation targets are, at most, complementary to forestry firms today and, at least, a by-product of overarching corporate agendas. This panellist adds: “I go around the world saying the conversation around sustainability has moved from morality to materiality. Why is this important to your business? Why is it important to Singapore [and] Indonesia at the country level? Well, a big reason is [that] this is about competitiveness and about resilience.”
The business case behind APP’s new sustainability campaign is not about saving the animals or the forest, says this straight-talking panellist. “This will reduce the risk of fires. This will then translate into lower insurance costs… What does that mean for the cost of capital of my company? That’s the way we need to begin to think about this stuff, because then we get the mainstream economics behind [this].”
Unlocking funds
Speaking to the media, Tan says the actual work of implementing nature-based solutions under APP’s conservation plan is “technically and operationally quite difficult”. “Every project that we do is actually very complicated… In Indonesia, ensuring that you have the correct licences and having community consent is probably the enabler; all these things take time.”
Instead, the company will first focus on setting up two independent units outlined in its FPP: an independent restoration unit within the company to deliver on policy aims; and an independent advisory panel reporting to the board, which will guide APP’s sustainability strategy and the FPP. Tan hopes to get the latter up and running by January.
“In the first year, what you will see is a lot of the structures being set up, and we will announce them… They will be able to structure the work plan, [which] will be quite aggressive.”
Responding to The Edge Singapore, Tan thinks it is “completely reasonable” for APP to publish an annual progress report on the FPP separate from its main sustainability report.
In its announcement, APP’s US$300 million pledge is presented as “US$30 million annually over the next 10 years”. Tan believes this sum can spur greater funding in two ways.
First, there are many funders that are keen on Indonesia’s nature-based solutions, but find that they do not meet certain criteria, says Tan. “To really unlock it, you either need to bring those requirements a little bit down to be reflective of the local conditions, or you bring [the nature-based solutions] up so that they can have some connection. What we are hoping to do, as a very large company, is to actually bring this up, so that funds can be unlocked.”
Second, Tan believes revenues from the carbon market can be unlocked to sustain the conservation projects, but the verification process could take around three years. “There’s no reason for us to wait three years; we have to express a little bit of confidence that the markets will work. If it works, then this whole thing will scale. If it doesn’t work, we’ll plod along and wait until it works. But we’re hoping that the world will move in a trend and direction where the carbon markets will [pick up].”
Table: APP