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ESS Cultures 29 February 2024
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PT SMI declares Carbon Neutrality on its 15th anniversary

In fulfilling its mandate to accelerate infrastructure development nationwide, PT SMI ("the Company") adheres to and prioritizes sustainability principles by implementing Environmental, Social, and Governance (ESG) policies, commonly known today as ESG. The ESG policy is applied to daily operational activities and across all business processes, including financing and investment, project development, and consulting services. The implementation of ESG policies aims to enhance operational efficiency, uphold high governance standards, and create financially stable, environmentally friendly projects that provide broader social and economic benefits, ensuring that sustainable financial principles are implemented meaningfully rather than merely as a label.

An essential element of the Company's ESG policy implementation is contribution to efforts in addressing the climate crisis. The Company is committed to support the Government in achieving national targets for reducing Greenhouse Gas emissions as outlined in the Enhanced NDC document and fulfilling the commitment to achieve Net Zero Emission by 2060 or earlier. The Company strives to make a positive contribution to climate change mitigation and adaptation efforts by promoting and funding relevant infrastructure development activities, including renewable energy, energy efficiency, environmentally friendly transportation, clean water provision, waste management, and climate resilience infrastructure across Indonesia.

Through these activities, particularly in renewable energy, the Company potentially supports the addition of around 1,310 MW of renewable energy generation capacity. If these renewable energy power plants operate as planned, the potential energy produced would be 7 million MWh per year, and the potential avoided GHG emissions would reach 6.4 million tons of CO2 equivalent per year.

Furthermore, since 2019, the Company has ceased providing financing or making new investments aimed at increasing coal-fired power generation capacity. In line with a mandate from the Government in 2022, PT SMI also contributes to the national energy transition process by serving as the ETM Country Platform Manager that is developed to facilitate a just energy transition with a focus on carbon reduction and promoting environmentally friendly energy.

Meanwhile, PT SMI also acknowledges that its operational activities also generate carbon emissions. Based on calculations verified by the TUV Rheinland verification and validation agency, carbon emissions generated during the year 2023 amounted to 1,910.60 tons of CO2 equivalent.

To demonstrate its commitment, the Company intends to become carbon neutral by 2028. In this context, the Company plans to offset carbon emissions, including scopes 1, 2, and part of scope 3, starting from 2024. These efforts will be undertaken through various strategies in the Company’s Corporate Social and Environmental Responsibility activities, including tree planting in critical land areas, mangrove planting in coastal areas, providing energy efficiency facilities for social facilities, developing renewable energy infrastructure in social facilities, and purchasing Emission Reduction Certificates in the Carbon Market. In 2024, PT SMI will commence these activities by planting trees in critical land areas in three regions of West Java: South Bandung in the upstream area of the Citarum River Basin, North Bandung, and Bogor-Puncak-Cianjur, through a community empowerment approach aimed at providing positive impacts on economic, social, and environmental aspects.

The activities will include (1) technical planning with expert assistance, (2) fostering community nursery grounds to produce quality plant seedlings, (3) vegetation planting using agroforestry approaches, (4) supporting and training farmer groups in collaboration with Local Governments and Extension Officers at the site level, and (5) supporting post-harvest processing and product marketing.

Concurrently, the Company continues to encourage its debtors to reduce carbon emissions from financed projects. For projects that achieve carbon emission reductions, the Company will provide support and encourage the monetization of these carbon emission reductions to provide additional financial value that can serve as additional motivation for debtors to play a more significant role in addressing the climate crisis. The Company hopes that these small steps will inspire all stakeholders of PT SMI, debtors, and other financial institutions to contribute to efforts in addressing the climate crisis, thereby leaving a better world for future generations.

 

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