According to the United Nations Environment Program (UNEP), by 2022, public funding sources account for 83% of the estimated USD154 billion annual investment in nature-based solutions. Additionally, according to Global Sustainable Fund Flows (Morningstar,
2022), global sustainable fund assets totaled US$2.74 Trillion in December 2021 compared to the previous year, a 53 percent increase.
These global sustainable funds include open-ended funds and exchange-traded funds with sustainable investment objectives and/or use ESG criteria in their investment decisions.
Meanwhile, based on a research report from the CSIS Center for Strategic and International Studies in 2022 on Green Economy in Indonesia’s Vision 2045, it is projected that the GDP opportunity from the green economy, including through green investment, could reach 20 percent of the state budget or 612 trillion rupiah. Therefore, if Indonesia fails to take advantage of this economic opportunity, it has the potential to lose trillions of rupiah worth of growth and prosperity.
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Therefore, efforts are needed to bridge the gap between the implementation of sustainable palm oil production and a gradual shift towards nature-based innovation. All within a collaborative framework to reduce deforestation.
According to Rizal Algamar, Tropical Forest Alliance Director for Southeast Asia, “Funding for nature-based innovation is one of the critical elements to ease the transition of commodity-producing regions towards sustainable development. Companies and investors see potential synergies between sustainable palm oil and nature-based innovation to drive prosperous jurisdictions with healthy nature.”
Algamar continued that cooperation between policymakers, companies, investors, smallholders/independent farmers and civil society is critical to achieving equitable and inclusive sustainable palm oil. The joint efforts of these parties are critical to addressing the climate crisis and reversing the trend of biodiversity decline.
Recent Developments
In developing district readiness, members were provided with a district mentoring program in line with the blueprint for sustainable jurisdictional transformation. The mentoring program includes a systematic process for farmers to manage land sustainably through collective action with the right partners.
Currently, one of the ongoing mentoring programs is to ensure that independent smallholders are certified and connected to traceability mechanisms for various commodities. On the other hand, the Government of Indonesia has also taken various steps to control the rate of deforestation due to land conversion.
One of them is the issuance of the National Action Plan for Sustainable Palm Oil Plantations (NAP KSB).
(NAP KSB) followed by the implementation of sustainable palm oil regulations at the district level such as in Sintang and Aceh Tamiang. This plan includes several key components, namely strengthening data on oil palm plantations, increasing the capacity of farmers, promoting sustainable environmental management, resolving land conflicts, accelerating the ISPO (Indonesian Sustainable Palm Oil) certification process, and improving market access.
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Beyond palm oil, the readiness of the value chain of nature-based commodities also continues to be prepared, while ensuring that the portfolio is built in accordance with the direction of national policies and planning.
“In terms of national planning and policy, the RPJPN 2024-2045 policy direction has been formulated, namely the development of innovation and research-based industries, especially to encourage the blue economy, bioeconomy and bioprospection. The government has now detailed plans to use this approach, including the development of new innovation-based economic sectors, the development of high value-added green industries such as food biochemistry, herbs and nutrition. This is contained in the RPJPN 2025 – 2045 development document as one of the new economic transformation strategies, which we need to make a momentum together so that Indonesia’s 20-year planning can be realized through the lifestream economy. Indonesia’s 20-year plan can be realized through a sustainable economy,” said Dr. Ir. Musdhalifah Machmud, M.T., Coordinating Ministry for Economic Affairs.
“The government supports all efforts to realize a sustainable economy, among others, through promoting sustainable practices in the plantation industry on a multicommodity basis, both palm oil, cocoa, coffee and rubber for a balance of social, economic & environmental interests which simultaneously need to innovate economic models outside of plantation commodities that can support forest conservation and are locally based,” she added.
To support government sustainability practices, LTKL uses a multi-stakeholder governance strategy at the district level. This stakeholder collaboration strategy is carried out to accelerate the achievement of regional development targets in accordance with sustainable policies and planning. The involvement of collective actions between local governments, companies, NGOs, academics, farmer groups, researchers, donors, and philanthropists, will be continuously rolled out.
Some member districts have established multi-stakeholder platforms that serve as partnership centers, data and information centers, and investment centers for sustainable development, including sustainable agriculture. Multistakeholder collaboration with the 5 pillars of this recipe does not stop at the 9 LTKL member districts.It is targeted that by 2026 the sustainable jurisdiction blueprint can be replicated in 100 other districts in Indonesia, and then by 2030 it can become a model for district economic management throughout Indonesia. (T3)
