On the 4th of August 2022, Asia Pulp and Paper (APP) Sinar Mas received top ratings from the global environmental sustainability review agency EcoVadis for its Environmental, Social, and Governance (ESG) performance and impacts.
With an overall ‘Advanced’ score, the Indonesian organization, which is also one of the world’s largest integrated pulp and paper manufacturers, is now within the 97th percentile of its respective industry concerning sustainable development.
Asia Pulp and Paper was assessed for their performance, initiatives, and outlook in 4 key areas according to EcoVadis’ survey – Environmental, Labor & Human Rights, Ethics, and Sustainable Procurement.
EcoVadis was founded in 2007 and has since grown to become the world’s largest and most trusted provider of business sustainability ratings, with a global network of more than 100,000 rated companies.
Using an assessment method that takes its cue from international sustainability standards such as the Global Reporting Initiative, the United Nations Global Compact, and ISO 26000, each step of an EcoVadis assessment is overseen by a scientific committee of sustainability and supply chain experts to ensure objective third-party sustainability assessments. EcoVadis also provides companies assessed under their scheme with further advisories on potential areas of improvement in their framework, as well as particular levels of priority that require further attention.
Asia Pulp & Paper received an ‘Outstanding’ for Environment, ‘Advanced’ for Ethics, and ‘Moderate’ for both Labor & Human Rights as well as Sustainable Procurement in the EcoVadis’ assessment.
Implementing Gold Standard Initiatives across Indonesia
Asia Pulp and Paper is no stranger to receiving praise from sustainability pundits globally, with the company obtaining a gold rating from EcoVadis beforehand in April 2018. Not long after, the Indonesian pulp and paper giant was named “Most Sustainable Company” in their industry at the World Finance Sustainability Awards by World Finance Magazine and was later awarded an A- grade by UK-based non-profit organization CDP Worldwide in December 2020 in the Forest category.
The secret behind Asia Pulp & Paper’s successful ratings lies within its many initiatives, each underscoring a key component of the four categories under assessment in EcoVadis’ scheme. These initiatives set Asia Pulp & Paper apart as a driver of sustainable development in Indonesia, and provide examples for other organizations and companies crafting their sustainability strategy.
Under EcoVadis’ Environment category, Asia Pulp and Paper was assessed to have solid policies and quantitative objectives in areas such as biodiversity, energy and water consumption, and GHG emissions.
The organization was also recognised for its forward-thinking and environmentally-conscious use of alternative fuels such as biomass to improve energy efficiency and simultaneously lower carbon emission intensity during its production cycle. Additionally, there were several initiatives piloted by Asia Pulp & Paper that raised its Environmental assessment and helped the company earn its ‘Outstanding’ rating.
The first is the Forest Protection and Restoration Commitment under their broader Forest Conservation Policy, which sees Asia Pulp & Paper looking beyond merely protecting forests within the concession areas of suppliers. Instead, it has gone beyond expectations to work with various stakeholders such as indigenous communities, NGOs, and government bodies to suspend the development of areas that are not forested. Under this policy, independent assessments of sites that serve as High Conservation Forests (HCF) and High Carbon Stock (HCS) Forests will be identified and protected. A strict zero-tolerance policy is enforced on suppliers and vendors who are non-compliant or fail to abide by the Forest Protection and Restoration Commitments.
Asia Pulp & Paper has also meticulously mapped out an Integrated Fire Management (IFM) program that revolves around the prevention and timely resolution of potential forest fires. Implemented in 2016, the IFM takes a landscape-level approach derived from global best practices for fire management and consists of four pillars: prevention, preparedness, early detection, and rapid response.
Asia Pulp & Paper showcases how companies must take a collaborative approach to forest management and protection to fully put forth a long-term sustainability strategy.
Ethics was another area of the EcoVadis assessment where Asia Pulp and Paper scored high with an ‘Advanced’ rating. The organization was assessed to have measurable objectives related to diversity, equity, and inclusion (DEI) with a strong level of transparency within its own rank of employees and with external stakeholders such as indigenous and local communities.
The critical policy driving this outlook is the tenet of Free, Prior, and Informed Consent (FPIC) under Asia Pulp & Paper’s Forest Conservation Policy. Conflict-resolution measures – whether in the form of mapping land disputes, establishing new subcommittees to handle land dispute resolution, or creating and implementing working plans to address specific conflicts – are also conducted to arrive at a fair and justifiable solution for all parties involved.
The results of these proactive efforts were evident in 2020, with 55% of land disputes handled by Asia Pulp & Paper being resolved efficiently. That number has been growing, with Asia Pulp & Paper reinforcing its commitment and revising its strategy to recognise the complexity of village politics and the implicit need to forge shared understanding between stakeholders.
Labor & Human Rights
As one of Indonesia’s largest integrated paper and pulp manufacturers, Asia Pulp and Paper recognises its responsibility to protect and uphold the welfare, labor, and human rights of its workers and stakeholders within and outside of the organization.
The organization’s work in the Labor & Human Rights criterion of the EcoVadis assessment has earned it a ‘Moderate’ rating so far, which belies the meaningful work done on the ground with indigenous communities within and nearby Asia Pulp & Paper’s concession areas. This can be most clearly seen through the launch of the Desa Makmur Peduli Api (DMPA) program in 2015.
Developed with an integrated forestry and farming system in mind, the DMPA program has involved 394 villages and 92 women groups from five regions across Indonesia to date. Indigenous villages under the DMPA are given the resources and funding needed to participate in activities that promote alternative sources of income as a way to uplift the village to a stronger economic stature.
During 2020 and 2021 when the COVID-19 pandemic was posing a challenge for many indigenous communities across the country, DMPA villages were introduced to activities such as honey cultivation, fruit and vegetable agriculture, and the sale of herbal drinks to help them maintain their income and livelihood. The DMPA program has also continuously provided its stakeholders with routine digital transformation webinars to guide communities on utilizing the digital marketplace to develop their businesses and engage in sustainable avenues of income.
The DMPA program has also gone down to the ground to directly educate stakeholders on long-term economic empowerment, particularly with regard to uplifting the economic status of women in these communities. Through a partnership with the Doktor Sjahrir Foundation (DSF), Asia Pulp & Paper has invited women living in and around its concession areas to participate in the Kalimantan Rattan Project for sources of alternative livelihood. After undergoing training sessions by the Project, women across 2 villages (Mengkiang and Miau Baru) have since produced 600 crafts and counting since 2019.
A key driver behind these social initiatives is Asia Pulp & Paper’s recognition of the beneficial social and economic impacts of uplifting indigenous villages out of poverty. By offering various types of resources and assistance for communities to tap on, the organization is able to help villages envision alternative modes of livelihood that are both sustainable and meaningful to implement in the long term.
Finally, Asia Pulp and Paper has also achieved a ‘Moderate’ in the Sustainable Procurement section of EcoVadis’ assessment, and continues to refine its procurement strategies in line with best practices recommended by the industry.
One initiative pioneered by Asia Pulp & Paper in this area is the Integrated Sustainable Forest Management Plan (ISFMP) which was developed through a long collaborative process involving compiling and consolidating data regarding HCF and HCF areas. These data points form the blueprint for the sustainable management of land resources in each of Asia Pulp & Paper’s supplier concessions. Specific ISMFPs implemented by Asia Pulp & Paper also directly serve as action plans for suppliers to improve sustainability and management practices on the ground.
Suppliers that fail to adhere to their ISFMPs are considered persona non-grata by Asia Pulp & Paper. The organization has also pledged to actively forfeit all business dealings with companies under this label. While this measure might seem draconian to some, it reflects the renewed commitment by the organization to pursue sustainable development from the ground up.
Learning from Initiatives and the Near Future
The initiatives that Asia Pulp and Paper have rolled out are just the tip of the iceberg, and the organization is always on the lookout for ways to refine and improve its eco-awareness at all levels. Despite having attained a good showing in EcoVadis’ recent assessment, Asia Pulp & Paper continues strengthening its measures to reinforce its sustainability strategy.
Companies seeking to embark on new eco-aware ventures can look at Asia Pulp & Paper’s combination of ground-up and top-down policies to balance the practical demands of manufacturing and business with the realities of long-term sustainable development.