Are Indonesian companies waking up to climate risk? (BMO GAM)

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Indonesia is one of the world’s biggest emitters of greenhouse gases, driven by deforestation and land-use change. With palm oil, rubber, sugar and coal being vital to the country’s economic growth and trade balance, calls to address the climate impacts of their production and use face significant hurdles. Meanwhile, the intense monsoons and rain of January 2020, which left tens of thousands of people displaced, were a stark reminder of the country’s vulnerability to climate risks.

We travelled to the country to meet with companies in those industries to better understand their current practices and encourage a more strategic approach to managing the risks and opportunities that climate change will have on their businesses.

Promotion

Slow progress in sustainable palm oil

We met with one of the largest palm oil companies in the country to discuss challenges the industry faces in justifying investment in implementing Roundtable on Sustainable Palm Oil (RSPO) standards and achieving certification. Current demand projections for certified products show insufficient uptake as consumer goods companies in countries such as India, China and Pakistan, which account for the lion’s share of global consumption, hardly require any certified palm oil.

 

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