Chamber of Commerce: Industrial Decarbonization No Longer Negotiable
Changing the way business is done is a must, according to Indonesian Chamber of Commerce and Industry Chairman Arsjad Rasjid. Our products so far do not meet the ideals of low emission standards.
By
AGNES THEODORA,
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KOMPAS/HENDRA A SETYAWAN
Indonesian Chamber of Commerce and Industry (Kadin) Chairman Arsjad Rasjid
BALI, KOMPAS - The movers of industry are faced with a dire necessity. They need to be more serious and quicker in carrying out decarbonization. Doing so is important, as it will prevent them from getting thrown out of a global market and supply chain that has become increasingly sustainable. The business sector simply cannot just run in the same perfunctory manner as it has been doing thus far.
The Indonesian Chamber of Commerce and Industry (Kadin) noted that 76 percent of the energy used by the manufacturing industry currently still comes from fossil fuel energy. The total sources of energy consumption in the manufacturing sector are comprised of electrical energy (23 percent), coal (33 percent), gas (33 percent), fuel oil (10 percent) and LPG (1 percent).
"Changing the way business is done is a must. Our products so far do not meet the ideals of low emission standards. We have to let go of our comfort in doing things in a business-as-usual manner," said Arsjad Rasjid, who is chairman of the Indonesian Chamber of Commerce and Industry, during the opening of the B20 Summit Side Event in Bali, on Friday (11/11/2022).
It was during this occasion that the chamber launched the Net Zero Hub program initiative. The initiative was designed to create a national ecosystem for domestic businesses for reducing carbon emissions that occur as a result of production processes. The chamber's Net Zero Hub will be a "container" for corporations and others who choose to go faster in decarbonizing industry.
According to Arsjad, the chamber will use this initiative to provide technical assistance to companies willing to implement low-carbon commitments and help them with establishing decarbonization schematics that are based on applicable international standards -- specifically, the Science Based Targets Initiative (SBTi). This is a crucial factor, considering that many national companies find it difficult to decarbonize because they do not understand how to calculate the carbon emissions they generate and how to reduce them.
More than 50 companies to date have registered to be part of the Net Zero Hub initiative, which was initiated by the chamber in collaboration with the United Nations Development Program (UNDP). Most of these companies attended the B20 Summit and the G20 Summit in Bali. It was during this occasion that a total of 17 cooperation agreements and memorandums of understanding with a total combined value of around US$5 billion were signed to carry out the process of industrial decarbonization.
KOMPAS/HENDRA A SETYAWAN
Indonesian Chamber of Commerce and Industry (Kadin) Chairman Arsjad Rasjid getting ready to deliver a speech on the implementation of the Indonesia Net Zero Summit 2022 in Nusa Dua, Bali, on Friday (11/11/2022). The Indonesia Net Zero Summit is part of the Business 20 (B20) Summit, which is the official G20 dialogue forum with a global community that includes 2,000 participants representing more than 6.5 million businesses.
Arsjad said the number of companies involved was expected to continue to grow in the future. "The high interest in this initiative indicates that the industrial sector is starting to be really serious about addressing the issue of climate change," he said.
He explained that the commitment to decarbonizing industry is now more than just a sweet promise or an attempt at following a pseudo-green economic trend (or "greenwashing"). With the international business world watching and with the demands of the global market for a more sustainable and responsible business world, a company's credibility is now at stake.
However, these efforts will be difficult to carry out without conducive regulations and the development of new and renewable energy (NRE) that industry can access. "This effort can also be difficult to carry out if there is no obligation to mandate companies to make reports on sustainability or help link funds for industrial decarbonization and energy transition efforts in Indonesia," Arsjad said.
So far, the business community has pledged numerous commitments and submitted many declarations. However, not all of them are willing (or are able) to fulfill these commitments.
As such, there needs to be integrated collaboration between the private sector and the government to carry out decarbonization seriously, according to Arsjad. "We need clean energy solutions to reduce emissions and face global challenges. Only together can we face the current global crisis," he said.
A matter of "survival"
During this same occasion, B20 chairperson Shinta W. Kamdani noted that more and more companies are currently realizing the importance of implementing sustainable business practices. The business sector has thus far often been blamed for producing too much in the way of emissions.
However, things are not that simple. The business world and the government must face the dilemma of running a sustainable business in the long term while also being encouraged to maintain accelerated economic growth in the short term.
KOMPAS/HENDRA A SETYAWAN
Various companies sign business cooperation agreements during the sidelines of the opening of the 2022 Indonesia Net Zero Summit in Nusa Dua, Bali, on Friday (11/11/2022). The Net Zero Summit was attended by 700 participants from 30 countries. Together they discussed opportunities, challenges, and calls to action for global companies to decarbonize industry.
"This is a dilemma that must be faced by the business world, between maintaining current economic growth or pursuing sustainability for long-term growth. However, one thing is certain: Industrial decarbonization is no longer negotiable. It must be done at all costs," said Shinta, who is also deputy chairperson of the Indonesian Chamber of Commerce and Industry.
According to the UNDP's Indonesia Representative, Norimasa Shimomura, the transition to a sustainable business these days is part of an effort to survive in the market. "This is a survival issue. Today's consumers are more sensitive to social and environmental issues. They can easily abandon goods and services that are clearly 'dirty' and unethical," Norimasa said.
So far, the business community has pledged numerous commitments and submitted many declarations. However, not all of them are willing (or are able) to fulfill these commitments. Norimasa also provided a reminder that the Net Zero Hub initiative should not just end up as yet another empty gesture.
According to Norimasa, Indonesia has to establish a final result target with a clear time frame for carrying out industrial decarbonization. "Don't compromise and bargain again. There must be a clear target with a clear timeline. This commitment must be more serious because this time there will be assistance and support from the chamber and the UNDP," Norimasa said.
