Volume VII, November 2013
Indonesia Business Council for Sustainable Development From Editor in Chief Tiur Rumondang
Your Local Solution to Tide Over Jakarta Traffic
Dear readers,
Spending hours stuck in the traffic has made Jakarta as unpleasant place to commute. People tends to stay where they are until the end of working hours and using any available provider and service to help movement of goods and document. Beat the Jakarta traffic has become frequent social media topic to warn their fellow traveller to avoid any certain points of gridlock. Another attempt to beat the ‘never ending sorrow’ has been the investment by the local authority and still estimate that they are likely to worsen in future years. Some people are trying their best effort to live with it and some will continue complaining the circumstances. The challenges of typical big city problem have existed for many years, and the future generations are the ones who are less fortunate to face this growing challenges. The responsibility is ours, including the young generation with their best endeavour to confront their future.
We are pleased to bring you the 7th IBCSD Newsletter, November 2013 edition. As we celebrate Indonesia’s Youth Oath Day, this edition also want to bring you our essential perspective of the young generation which could take part of sustainable development. The growing population of Indonesia will need to take serious action in educating the youth for sustaining their livelihood The big question is how, and how big the story can go for the youth in influencing the future. With the youth spirit, an article about Bike Messenger is given as an example of business innovation coming from Indonesia young generation. As best practice, we want to show refrigerant management in removing the risk to the ozone layer, by Holcim Indonesia. In addition, we would like to invite you all to some exciting events that we conducted in partnership with various organizations, in the month of November 2013, and await your participation, member and non member companies. Happy Reading!
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This small company recruitment is nothing like usual company with a set of skills and professional requirements. Any people who love and equipped by bicycle will be welcome to join as the demand of such services growing. With IDR 50.000 (around US$ 5), customer can enjoy the same day picked up and delivery service in most of greater Jakarta area except for North Jakarta. VVIP service is set with price IDR 100,000 (around US$ 10) for 2 hours time from picked up until delivery service. The investment they have made is mostly on bike, spare parts, and skills of bicycle riding, indeed. Customer support through dedicated call centre is one of the most important function of the services which accessible during normal working hours. The existent services is available for at least 7 clients per day and expected to grow with soon to be ‘corporate’ service package. These young green entrepreneurs also make use the rise of social media to expand the business. With the unavoidable traffic of Jakarta, the bicycle use In the recent 10 years, many young people wants that able to utilize pedestrian track and opposite to fill their adolescence with reaching green road lanes can be the best option offered for initiative through many ways. This spirit mostly now and future needs of delivery services. come from growing trends of ‘go green’ campaigning and creates anything different in Such action of Indonesia young entrepreneur has their adulthood. Somehow, these passionate become another challenge for Indonesia's young young entrepreneurs with their energetic mind generation that have to survive in the future create the solution to tide over the Jakarta competing world. Other inspiring ideas from Traffic and launch the inner thought born from young people can trigger another big ideas to be their leisure hobby of bicycling. Hendi Rahmat able to create forward-thinking business and at and Duenno Ludissa are 2 young people whose the same time building the puzzles of future establish Westbike Messenger about 2 months piece of greater challenges, taking into account ago started with 3 messenger. Business is not the boundaries of our planet. their pursued target but it is likely an almost zero emission service transaction that Jakarta may Want to try the first ride? need. westbikemessengerservice@gmail.com Call center 021 33310808 www.westbikemessenger.com
Young Generation for Sustaining the Nation In this era, youth is a moral compass, a social control and a strategic agent of change in developing countries. Improving the role and responsibility of youths will be a strategic and necessary move to improve the development of the country. Although it is a time consuming plan, it is worth the investment as building for the future is a crucial step in sustaining the development of the country. In 2011, Statistic of Indonesia stated that in the year 2000, the number of births will augment to 4.5 millions per year. As a nation with growing population, Indonesia has a great opportunity in producing a new youth generation. United States, Japan, and several other countries in Europe are not endowed with this advantage due to the incline of birth rates. Education is one of the strategies in generating a strong youth generation. According to McKinsey report in 2012, number of skilled workers in Indonesia will rise to an astonishing 113 million, which almost doubled the amount of 55 million of skilled workers in 2012. Employment skills could be attained, formally or informally, through education. Therefore, education is the key foundation to improve the Indonesian economy as it provides a stepping stone to gain access to myriads of job opportunities. Through employments, youths could maintain economic activities which ultimately will lead to the sustainability and development of the Indonesian economy. Cesc Fabregas, Samir Nasri, and Wayne Rooney became world class soccer stars as a result of early age training. This highlights the importance of youth investment as early age training and education are influential to achieve future success. Indonesia also has multiple youth success stories. In 1908, Budi Utomo led a youth movement which successfully unfolded
into historical turning point called the Youth Oath, or Sumpah Pemuda, where the youths’ motto is to be united through one motherland, one nation and one language. The union of influential youths soon led to the Proclamation of Indonesian Independence after being colonized by multiple colonies, such as the Dutch and the Japanese, for approximately 450 years. These historical facts show that youths can actively participate as pioneers in renewal and developing a nation. Due to the rapid economic development in Indonesia, sustainability becomes an emerging issue that we face every day. In order to achieve sustainability, it is crucial that youths today are more exposed to the idea of sustainable development. Indonesia needs more youth leaders to tackle these issues especially in the ever transient sectors such as technology, academics and business. Several countries have adopted the Future Leaders Team program provided by World Business Council for Sustainable Development (WBCSD) as a necessary investment to build future youth leaders. Indonesia also needs to adopt similar approach hence that is why IBCSD is launching a new program called Young Manager Training. This program is a response and a necessary action to the issues of the absence of green technology produced by Indonesian youth, lack of entrepreneurship on creative industry based on sustainable resources, and lack of youth leader on sustainability. Education on sustainability is best when given at early age through formal education or training program. The goal of early exposure is to train youths to consciously feel the need to overcome serious multidimensional issues with an integrated problem solving skills. This is a valuable asset for the nation, because ultimately, sustainable business also means sustainable nation.
*Picture is the property of United-Nations Non-Governmental Liaison Service (UNGLS)
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IBCSD Training Program for Corporate Employee Many companies underestimate the role of employees in driving good corporate sustainable strategy, action plan and program ready in place. If sustainability is integrated into the core value of company, the employees would be the driving force in creating and achieving valuable results. Business leadership is a growing priority whereby strategic sustainability is dominated by the CEOs. In order to realize the CEO’s visions to attain sustainability goals, all employees should be provided with adequate training and understanding in parallel to the mission. Structural process is a necessary approach as CEO’s vision ought to be translated to complement the specialties provided by each sectors of the company. The delivery of business information is imperative to reach operational ground to successfully tackle social and environmental challenges. Ultimately, the top-down process is intended to bring the company to find qualified solutions and rake in the benefits to the company’s future.
sets of expectation. Engaging the corporate employees’ previous operational experiences and backgrounds will not only create individualized programs but also a sustainable business case. The Capacity Building Program provides workshops that are designed to immerse corporate employees to have immediate and deep understanding on how to implement their knowledge into their daily work. Default of program’s topic starts from general corporate sustainability however, it could be tailored accordingly to be best suit the company’s sectoral program or topical program such as GRI Sustainability Reporting, Business Ecosystem Training and Greenhouse Gas Protocol. IBCSD will assist the company in prioritizing the most required program and provide necessary coaching program.
The program will also bring a broad understanding in the holistic sustainability approach, by introducing a wider scope of In addressing such challenging process, Indonesia Business sustainability in the business context. Employees must understand Council for Sustainable Development creates an innovative that uncertainties in business companies may affect their future leadership program called the Capacity Building Program. This success and failures. Furthermore, employees must realize that holistic program touches all the spheres of sustainability which are their work contribute to the deteriorating ecosystem, augment of environment, social and economic. The mixture approach of this global issues as well as natural resources challenges. By engaging program will allow corporate employees to share knowledge and the employees, everyone is an active agent of change beyond their develop leadership mindsets regarding the issue of sustainability. daily work. Afterall, business cannot succeed in society that fails Moreover, the employees would also be benefited by gaining skills and society cannot succeed without business solutions to major to initiate sustainability programs as well as the expertise to design challenges ahead. solutions. The program is created to build a strong bridge between the company’s sustainability perspective and employees’ capabilities to pursue sustainable mission thus resulting in high
Event
APEC 2013, Bali Sustainability initiative belongs to all part of human existence which aiming at sustaining their livelihood. The Ministry of Tourism and Creative Industry of Republic of Indonesia recognize the sustainability benefit associated with Indonesia tourism sector given its abundance natural beauty. This is one of the reason that the Ministry participating at the APEC event by carrying out the Tri Hita Karana International Conference. As the sides event of APEC Indonesia 2013, the title Tri Hita Karana was choose to show the international community that sustainable development has been existing within the living nature of Indonesian people. Tri Hita Karana is a Balinese philosophy of life, which literally translates as the Three Causes to Prosperity in finding spiritual balance, and bring the ownership of human relationship with its community and environment. Looking at the genuine Indonesian philosophy of Tri Hita Karana, it is a necessity to increase the pace of improvement of Indonesia tourism as one of the key element of Indonesia economic productivity and to meet its true potential of ecotourism. Page 3
WBCSD Column
Overview: Future Leaders Team Program Faced with increasing social and environmental challenges, tomorrow’s managers will need new skills and leadership experience to respond to sustainable development opportunities and challenges. An important role for today’s decision-makers is to help build and foster this capacity among future business leaders on the sustainability agenda. The WBCSD’s Future Leaders Team (FLT), previously called Young Managers Team (YMT), is a program designed to provide a great learning experience and networking opportunity for the team members as well as for the companies they represent. Future Leaders Teams run for up to one year and are composed some twenty young high potential employees, interested in sustainable development, and drawn from across a range of job functions. The future leaders become sustainable development ambassadors, spreading the message within their companies, at business schools, at existing youth forums and events at all levels from the local to the international. This network is a vibrant and vital learning laboratory, and has proven to be a successful formula. Program benefits The WBCSD’s FLT program helps participants to address future challenges and create business value through: Recognizing sustainability risks and opportunities; Building a long-term business perspective; Acquiring project development and management experience; Communicating with a broad set of stakeholders; Sharing personal and professional knowledge and experience; Engaging with key sustainability thinkers;
Creating new networks across functions, sectors and geographies; Shaping the future of sustainable development; Understanding the local and global business context.
Key program features The FLT is a professional development opportunity focused on business leadership and sustainable development. The program is based on action learning through workshop participation, involvement in the WBCSD and the management of individual and group projects. Participants are invited to contribute on a part time basis, 25 days spread over 9 months, clustered around three face-to-face meetings. Each WBCSD company is invited to offer one participant per year who is not a sustainability expert and who does not have more than five years of business experience. Participants are supported throughout the year by their Liaison Delegate (the key company contact in WBCSD) who will work with them to set objectives, access people and information, identify communication opportunities and apply learning inside the company. Throughout the duration of the program, participants will also benefit from a range of sustainability experts who will contribute to the agenda, speak at workshops and be available online. Future Leaders are encouraged to take responsibility for their own learning and for engagement and interaction with relevant stakeholders.
Save the Date! CEO Gathering. Friday,November 22nd 2013, 7:30-10am This occasion is designed for CEO level dialogue, which is expected to be the venue of IBCSD leaders to exchange strategic direction, business proposition and information related to sustainability matter. This event is exclusively designed to member companies and invited guest. Sustainable Business Dialogue. Wednesday, November 27th 2013 A one-day conference participated by at least 150 Indonesian and international business representatives, government officials and academicians/representatives of the civil society to generate the public outreach and impact desired with objectives to create dialogue forum between policy makers and business practitioners and to establish networks and contacts for joint initiatives. For registration, contact Ms. Candrawulan Wiranatakusumah at candrawulan@bsd-kadin.org. B4E. Thursday, November 28th 2013 B4E, Business for the Environment, is the leading international platform for dialogue and partnership solutions for the environment. The B4E summits bring together world leaders, CEOs, senior executives and industry experts to share ideas and commit to solutions, which address the most urgent environmental challenges facing the world today. More information on http://b4esummit.com/b4e-indonesiasummit-2013/ Sustainable Business Awards. Gala Dinner on Thursday, November 28th 2013 The SBA is a unique and important resource for businesses across sectors worldwide aiming to increase awareness of sustainable business best-practices and demonstrate how sustainable business benefits companies, the environment and all stakeholders, today and for the future. Page 4
WBCSD Column
Future Leader Team (FLT) 2011
Why procurement professionals should be engaged in supply chain sustainability?*
“ supply chain sustainability is to create, protect and develop long-term environmental, social and economic value for all stakeholders involved “
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Procurement departments are at the core of efforts to drive sustainability in the supply chain. Supply chain sustainability can be defined as “the management of environmental, social and economic impacts, and the encouragement of good governance practices, through the lifecycles of goods and services.”1 The objective of supply chain sustainability is to create, protect and develop long-term environmental, social and economic value for all stakeholders involved in bringing products and services to market. We believe that a sustainable supply chain can drive competition and profit, and is a great opportunity to make a difference to companies, communities and the environment, beyond the scope of their operations. Supply chains are, first and foremost, a set of intertwined relationships between participants. Therefore, people are the key links within the chain, and need to be engaged. Moreover, procurement teams have a key role to play in a sustainable supply chain, because they are in charge of managing the interaction between the company’s operations and its suppliers.
So far, procurement departments have had relatively less exposure to sustainability. According to a recent McKinsey survey, many companies are actively integrating sustainability principles into their business and across many processes. The most integrated area is mission and values, followed by external communication, while the least integrated areas are supply chain management and budgeting. From this study, we infer that the integration of sustainability by companies has been focused on principles, rather than processes. In addition, we consider that the integration of sustainability issues into business can follow two main channels; functional integration, or direct people engagement. The results of this study convey that both the functional integration of sustainability in supply chain management and employee engagement in general, are lagging behind. Therefore, we believe that there is still much potential to further drive integration and increased value creation, by engaging people in procurement functions in sustainability issues for their supply chain. From a sustainability standpoint, benefits can be substantial, as the area of corporate responsibility will be pushed even further, beyond the scope of operations and products.
WBCSD Column
It is necessary to involve procurement teams in assessing the sustainability of their supply chain. Companies tend to adopt three main approaches for assessment. Firstly, companies can audit their suppliers on several categories related to sustainability (environmental footprint, labour practices, etc.). For example, Lafarge mandated an international audit firm to assess the sustainability of coal mines that were supplying Lafarge in Indonesia. The objective of this audit was to draft an action plan to ensure that the coal mines were abiding by local laws, and Lafarge internal code of conduct. A second approach, favoured by Holcim or Umicore, for example, consists of defining minimum sustainability requirements expected from suppliers, in alignment with the company’s values, and in cross-functional collaboration between corporate sustainable development and procurement teams. It can result in a sustainable procurement charter destined for suppliers who must abide by it in the contract phase, and for local procurement teams who can assess their practices. The third approach is risk-based. In collaboration with Ecovadis, a consultancy working with procurement departments to develop a scorecard approach to assess their supply chain sustainability, Lafarge identified “risky families of suppliers”, from a sustainability standpoint, and concentrated its actions on those. Ecovadis’ riskmapping tool enabled Lafarge to quantitatively assess the valueadd of a sustainable supply chain and thus facilitate internal buy-in. Global procurement teams need to engage procurement departments locally, and to coordinate their action with corporate sustainable development teams; they also need to obtain the support and sponsorship of the company’s leadership, at Executive Committee level. A successful sustainable supply chain implies a culture change in the company. Therefore, top management should be the first group engaged in the chain, because they steer the company culture and values.
Corporate procurement deal with global and regional supplier. Engaging corporate buyers requires communication and education on the sustainability impact of the actions derived from their global or regional practices. Raising their awareness is only one face of the coin. It is important, to provide them with processes, methods and tools to mitigate the impact of their action and to involve them in the development of a sustainable procurement approach communication. The biggest challenge in this corporate journey is to engage local business units whom, on many occasions, feel that the corporate function is far removed from their local needs. A key success factor is to involve them in the development of the corporate initiative, and to incorporate their lessons. It is important to develop measurement indicators that fit company values, and reflect the benefits delivered, as defined in the business case.
“ A successful sustainable supply chain implies a culture change in the company ”
* One of FLT program themes
Transportation in Sub-Saharan Africa – interview of Jean Hanoteau, Lafarge Vice President Context: For Lafarge in Africa, transportation costs are often extremely high, due to poor infrastructures, long distances to fragmented markets, and little efficiency/poor maintenance of vehicles by subcontractors and suppliers. Moreover, transportation is typically assured by local suppliers. It represents a great risk for health – high pollution and nuisance and safety. Project: Educate drivers, and provide on-site vehicle maintenance. Business case: Reduce health and safety risks, decrease pollution and associated nuisances, and increase the reliability of supply. By doing so, Lafarge also contributes to local economic development. Indeed, more reliable supply means longer-term contracts and more revenue for drivers, who can expand their business. In addition, clean branded trucks, driven by drivers respectful of road safety rules, enhance the company image. Insight: Addressing recurrent, presumably procurement-specific issues can have large sustainability implications. Each of those implications must be understood, and all benefits of the project should be exploited.
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Case Study
Removing the risks to the Ozone Layer
About IBCSD The Indonesian Business Council for Sustainable Development (IBCSD) is a CEO-led associations of companies operating in Indonesia, who share a commitment to promoting sustainable economic growth, ecological balance and social progress. To learn more about IBCSD membership, please contact: info@ibcsd.or.id. Follow us on Twitter: @IBCSD2011 Facebook: IBCSD Indonesia Business Council for Sustainable Development (IBCSD) Menara Duta Building, 6th Floor Wing B Jl. HR. Rasuna Said Kav. B-9 Jakarta 12910 T: +62 21 5290 1941-42 F: +62 21 5290 1949 www.ibcsd.or.id
Holcim Indonesia As the world focused on the threat of global warming from man-made carbon dioxide (CO2), another potentially lethal risk has been overshadowed – but thankfully not overlooked, at least not in Indonesia. Damage to the vital ozone layer, that saves our skins literally, from the harm of the sun’s ultra violet rays, has been averted through international collaboration under the Montreal Protocol – an agreement to stop uncontrolled use and release of CFC gases in refrigerants and other substances. Their impact is 10,000 times greater than that of CO2 creating a yawning gap in the ozone layer in the 70’s. The hole has been contained, but the risk remains. Holcim has teamed up with non-government organisations and the Government of Indonesia to ensure not only greater awareness of the risks from CFCs but a solution that is readily available. The programme is known as RAISE, an acronym for refrigerant management awareness in industrial and commercial applications for sustainable energy consumption. Holcim uses its ultra high temperature cement kilns to completely eradicate these ozone-depleting substances, and since 2007 has already handled 20.5 metric tonnes of ODS alongside thousands of tons of solid waste, which if left untreated in landfill, adds to the green house gas problem. Holcim is able to recover energy from waste, cutting non-renewable fossil fuel usage in producing high quality cement. It’s been a success as an educative step: from averting pollution, to the creation of materials for vital home building and infrastructure development, propelling Indonesia’s economy forward.
PARTNERS
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MEMBERS