General Overview

Sustainable operation, namely business operations with regard to economic, environmental and social aspects, is the focus and concern of Holding Perkebunan Nusantara PTPN III (Persero). This is motivated by the realization that the Company’s existence is required not only to seek profit or profit, but also to preserve the environment and care about social issues

Every year, PTPN assesses which material ESG topics are most relevant for our business. This materiality assessment refers to the GRI Standards Reporting Principles and AA1000 Accountability Principles. In general, the process of determining and reviewing our material topics can be summarized in the following stages:

1. Topic Identification
PTPN develops a list of ESG topics that may have a material impact on our business and stakeholders by analyzing industry and sustainability trends, as well as reviewing ESG topics outlined in relevant industry sustainability reporting standards.

2. Stakeholder engagement and topic prioritization
PTPN prioritizes based on the potential impact of each topic on the company’s ability to create longterm value for its business and stakeholders. This process was conducted through several forums involving internal and external stakeholders.

3. Validation and Ratification
The selected ESG material topics are reviewed and approved by senior management

4. Integration and Review
The list of ESG material topics forms the basis for the sustainability strategy, performance metrics to be monitored, and for associated management targets.

Through the process described above, PTPN has determined the following material topics for the Company:

1. Greenhouse Gas (GHG Emission)
2. Use of Energy and Renewable Energy
3. Biodiversity & Conservation
4. Forest Fire Prevention and Management
5. Water Usage Efficiency
6. Waste and Pollution

1. Diversity & Inclusion
2. Occupational Health & Safety
3. Worker Competency Development
4. Employment Practices and Industrial Relations
5. Local Community Involvement and Rights
6. Local Community Empowerment

1. Good Corporate Governance
2. Complaints and Whistleblowing
3. Ethics and Anti-Corruption
4. Product Quality and Safety

General Topics
1. Supply Chain ESG Compliance
2. Contribution to the National Economy

PTPN’s Sustainability Commitment and Strategy

Under this strategy, the Company started its sustainability efforts by creating a strong foundation to mobilize the PTPN organization towards sustainable practices. The Company has formally established a dedicated ESG task force structure under the direct supervision of the Board of Directors with the Vice President Director serving as Program Director, with governance rules which include regular reporting on the progress of the Company’s sustainability initiatives. PTPN further refers to international and national regulations and standards as a general guide to the sustainability principles that must be followed in accordance with their respective topics, and from there, the Company developed sustainability policies that serve as the foundation for all future sustainability initiatives which will be taken by the Company.

On top of this strong foundation, there are 4 pillars that represent the key stakeholders that need to be involved in the Company’s sustainability efforts. In the first pillar, Corporate Governance is very important to ensure that the Company is run accountably in accordance with best practices, to pay attention to the rights and interests of the owners of the Company, namely shareholders. The second pillar takes into account the interests of PTPN’s human resources as the main driver of any initiative within the Company. The third pillar relates to suppliers and ensures that the sustainability principles that PTPN honors, are also respected by third parties that work with the Company. And last but not least, in the fourth pillar, PTPN also pays attention to the surrounding communities who certainly cannot be separated from the impact of the Company’s operations in the region, both positive (which must be strengthened and amplified) and negative (which must be mitigated as best as possible).

These four pillars then sustain PTPN’s performance to deliver good operational performance, conducting operations with due regard to environmental risks and adopting best environmental sustainability practices. With such sustainable and environmentally friendly processes, PTPN then needs to be able to continue providing products with the highest quality and safety assurance for customers. This then leads to the Company’s contribution in promoting Indonesia’s national economy, both by contributing direct economic value in the form of the Company’s financial performance as a state-owned enterprise, as well as indirect contributions through the provision of employment and reviving the domestic supplier landscape.

PTPN’s overall sustainability/ESG strategy is certainly inseparable, and even an integral part, of the Company’s overall vision in which sustainability is an important element: “To become a world-class leading and competitive national agribusiness company that contributes sustainability towards the nation’s advancement.”