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Business context - Indonesian Business Council on sustainable development
1. DEDICATED TO MAKING A DIFFERENCE
Vision 2050 for a
Green Economy
Indonesian Business Council for Sustainable Development
19th April 2012
Heart of Borneo/ACCA – Green Economy
Pacific Place, Jakarta
2. Topics
• Indonesian Business Council for
Sustainable Development
• Vision 2050 Indonesia
• Future Megatrends
• Imperatives of economic development
• The role of business
• Aligning vision for a Green Economy
INDONESIAN BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT
3. World Business Council for Sustainable
Development (WBCSD)
The World Business Council for Sustainable
Development (WBCSD) is a global CEO-led
coalition of 200 international companies, from
35 countries and 22 sectors, with a shared
commitment to sustainable development.
Collectively, members represent an estimated:
• 15 million employees
• 7 USD trillion annual revenues
• 5 USD trillion market capitalization
(Source: Observatoire de la Finance, Geneva, December 2009)
3
4. WBCSD Regional Network
• 62 independent national and regional partner organizations
• 60% in developing countries and emerging economies.
NHO
Business RBF (Poland)
(Norway)
Europe
Danish respACT BCSD
Excel Partnership BCSD econsense BCSD Austria
(Canada) United Kingdom (Germany) Korea
Vernadsky BCSD
EpE
Foundation
(France)
(Russia)
BCSD Nippon
United States FFA BCSD Ukraine Mongolia
CGLI BCSD Keidanren
BCSD (Spain)
(Canada/USA) BCSD Kazakhstan (Japan)
FE Hungary CII
BCSD Spain BCSD (India)
BCSD Mexico BCSD Turkey BCSD
CentraRSE China
Portugal SEV-BCSD Taiwan
Guatemala Gulf BCSD BCSD
BCSD BCSD Greece
BCSD El Salvador Croatia APEQUE BEC
BCSD DomRep Honduras AEEC BCSD
(Algeria) (Egypt) (Hong Kong)
uniRSE SumaRSE (Panama) BCSD UAE Vietnam
(Nicaragua) BCSD Uganda
Curaçao BCSD Indonesia BCSD
AED BCSD BCSD
(Costa Rica) Zimbabwe Pakistan TERI PBE
BCSD Bolivia BCSD India BCSD (Philippines)
BCSD Colombia BCSD Malaysia
BCSD BCSD Angola Sri Lanka
Ecuador BCSD Brazil BCSD
Thailand BCA (Australia)
Peru BCSD FEMA
2021 Paraguay BCSD Mozambique New
DERES Zealand
Acción RSE NBI
(Uruguay) BCSD
(Chile) BCSD (South Africa)
Argentina
4
www.wbcsd.org/regional/htm
5. Indonesian Business Council for
Sustainable Development (IBCSD)
• Initiated at Business Day in Bali, COP XIII UNFCCC
• Founding reflects 4 years of effort from KADIN & WBCSD
• Launched April 2011
Bakrie Telecom The Honourable:
Holcim Minister of Industry
BNI Minister of Environment
Riaupulp Chairman of DNPI
Garuda Chairman of KADIN
Medco Energy
“IBCSD will be a resource for business to share experience and
opportunities for increasing sustainability of their operations. It will play an
advisory role to government and reach out to entrepreneurs developing
new green technologies,” Mr. Sulisto, Chairman of KADIN 5
6. IBCSD – Mission and Objectives
Mission: IBCSD is a CEO-led, association of companies
with a collective mission to provide business leadership as
a catalyst for green growth and sustainable development in
Indonesia.
– Business Leadership: To be a leading business forum for
issues related to environment and sustainable development;
– Policy Advocacy: To promote policy frameworks that enable
business to contribute to sustainable development;
– Best Practice and Learning: To demonstrate progress in
environmental, social and resource management in business and
to share best practice practice among members;
ADVOCACY ACTION
Influencing Implementing
7. IBCSD - Lessons Learned
• Wealth of experience and visionary leadership within
Indonesian business community
• “Trust gap” continues to exist between business and
other stakeholders
• Business strategy often undervalues long-term trends
• Sustainability – offers a framework for extending
strategy horizons and aligning business with society
challenges
• Need for collective Vision :
– Bridges gap, finds consensus
– Defines role for business
INDONESIAN BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT
8. WBCSD’s Vision 2050
A platform for dialogue about
the role of business in a
resource & carbon
constrained world.
Over 30,000 downloads, in 12* languages.
27 Regional 2050 Visions completed
http://www.wbcsd.org/vision2050.aspx
9. Indonesian Vision 2050
– Project underway
– A business-led Vision for
sustainable Indonesia
– Based on a consensus with
stakeholders on Vision and
Action
– Identifies the necessary policy
Enabling conditions
INDONESIAN BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT
10. Vision 2050 – Process
Pathway Opportunities
to 2050 and enabling
conditions
Vision
2050
The world population is increasingly urban Greenhouse gas emissions keep rising
Global p opulat ion b y t yp e of area and b y region – 1950-2050 GHG emissions b y regions
10,000 80
9,000
70
8,000
Population in millions
60
7,000
6,000 Urban - Less developed 50 Res t the world
of
GtCO2eq
Rural - Less developed BRIC (Braz il,
5,000 40 Rus s ia,
India, China)
Urban - M ore developed
4,000 OECD
Rural - M ore developed 30
3,000
20
2,000
1,000 10
0 0
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 1970 1980 1990 2000 2010 2020 2030 2040 2050
Global economic power is shift ing Environmenta l degradat ion j eopardizes
Business-as-usual
Top 10 economies by GDP in 2050 people’s qualit y of life
People living in areas of w at er st ress b y level of st ress
80,000
70,000
2005
60,000
GDP2006 US$ bn
50,000 2030
40,000 Sev ere
outlook to 2050:
2005
Medium
30,000
Low
2030
20,000 No
10,000 2005
0
2030
ia
n
s
zil
sia
y
a
dia
o
om
te
s
pa
an
hin
ic
ra
us
ta
ne
In
ex
Ja
gd
erm
B
C
R
S
do
M
in
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000
ed
G
K
In
nit
ed
U
Millions of people
nit
U
The global middle class is rapidly expanding The world could be running out of some resources
Megatrends Population in low- and middle-incom e countries earning US$ 4,00 0-17,00 0 per capit a
(p urchasing p ow er parit y)
16
14
1.2 billion
Global sup pl y forecast s accord ing t o t he im plied ult im at e recov erable
resources of convent ional oil, date of peak produ ct ion and t he post-p eak
aggregat e decline rat e
8%
7%
post-peakdecline rate
Percentof global population
Shell USEIA
12 6%
Sub-Saharan
Afric a
10 South As ia 5%
Peak Oil Consulting OPEC
Middle Eas t
and North Afric a
8 4% LBST
Latin Americ aand the Caribbean Miller
Meling IEA
6 Europeand CentralAs ia 3% Campbell
400 million
Forecast
Eas tAs iaand the BGR
4 2%
2 1% Uppsala
Total
0 0%
2005 2030
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Forec asdate of peak
t
11. Megatrends: Business-As-Usual to 2050
The world population is increasingly urban Greenhouse gas emissions keep rising
Global p opulat ion b y t yp e of area and b y region – 1950-2050 GHG emissions b y regions
10,000 80
9,000
70
8,000
Population in millions
60
7,000
6,000 Urban - Less developed 50 Res t the world
of
GtCO2eq
Rural - Less developed BRIC (Braz il,
5,000 40 Rus s ia,
India, China)
Urban - M ore developed
4,000 OECD
Rural - M ore developed 30
3,000
20
2,000
Degradation
1,000 10
0 0
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 1970 1980 1990 2000 2010 2020 2030 2040 2050
Global economic power is shifting Environmental degradation j eopardizes
Top 10 economies by GDP in 2050 people’s quality of life
Growth
People living in areas of w at er st ress b y level of st ress
80,000
70,000
2005
60,000
GDP2006 US$ bn
50,000 2030
40,000 Sev ere
2005
Medium
30,000
Low
2030
20,000 No
10,000 2005
0
2030
a
n
es
il
y
a
na
a
o
si
m
az
pa
an
si
di
ic
us
at
do
hi
ne
In
Br
ex
Ja
m
St
C
R
ng
do
er
M
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000
d
Ki
G
In
te
ni
d
te
U
Millions of people
ni
U
The global middle class is rapidly expanding The world could be running out of some resources
Population in low- and middle-incom e countries earning US$ 4,00 0-17,00 0 per capit a Global sup pl y forecast s accord ing t o t he im plied ult im at e recov erable
(p urchasing p ower parit y) resources of convent ional oil, date of peak produ ct ion and t he post-p eak
aggregat e decline rat e
16 1.2 billion 8%
14 7%
post-peakdecline rate
Percentof global population
Shell USEIA
12 6%
Sub-Saharan
Afric a
10 South As ia 5%
Peak Oil Consulting OPEC
Middle Eas tand North Afric a
8 4% LBST
Latin Americ aand the Caribbean Miller
Meling IEA
6 Europeand CentralAs ia 3% Campbell
400 million
Forecast
Eas tAs iaand the BGR
4 2%
2 1% Uppsala
Total
0 0%
2005 2030
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Forec asdate of peak
t
INDONESIAN BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT
12. Megatrends: Shifting Fortunes
% Share of GDP
* At purchasing-power parity
Emerging economies Developed economies
80
60
“Wrestling for influence.” July 3rd 2008.
From The Economist print edition.
Source: Angus Maddison, OECD; IMF
40
20
0
1913 1950 2005 2025
Emerging economies > 50% of global GDP and trend will continue
INDONESIAN BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT
13. Megatrends Indonesia: Social
Rapid growth of middle-class with high demands for
quality of life coupled with ageing population.
Growth
INDONESIAN BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT
14. Megatrends Indonesia: Social
Rapid growth of middle-class with high demands for
quality of life coupled with ageing population.
– Population of 295.4 Million by 2050
– Young population to 2030, but ageing by 2050.
Growth
– By 2025, 72% of Indonesians will be urbanised; many
in new urban provincial capitals (1-5 million)
– By 2050, rural population will decrease from 128
million to 81 million
– By 2015, 150 million middle-class Indonesians, with
high demands for services and goods.
INDONESIAN BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT
15. Megatrends Indonesia: Overview
Massive investment needed to service
Infrastructure society’s increased needs for transportation,
housing, basic services, telecommunications
Degradation
Dwindling fossil fuel reserves and increased
domestic demand requires a shift to Energy
renewables and energy efficiency
Growth
Natural resource depletion and increased
Natural
competition over land for commodity
Resources & Land agriculture, biofuel and food security
Increased waste loads. Higher GHG
emissions. Erosion of ecosystem services
and exposure to extreme weather. Impacts Environment
on biodiversity and forests
INDONESIAN BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT
16. In the Context of Policy
Long-Term National
• Top 10 global economy by 2025 Development Plan
• GDP to US$4 trillion (x4 from current) 2005-2025
• Income per capita to $15,000 (from $3,000) National Dev.
• 26% GHG mitigation and green growth Priorities 2010-2014
• Forests net carbon sink by 2030 National Action Plan
for GHG / PP61
• Pro-poor, pro-job, pro-growth, pro-environment
• Competitive Indonesia Green Growth Vision
• Just and distributed development
MP3EI – Accelerated
• Green and Sustainable Indonesia Economic Dev.
• 17% renewable energy base
National Energy
• GHG mitigation, Pres Reg. 61/2011 Strategy
INDONESIAN BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT
17. Pathway to Vision 2050:
Business Action for a Green Economy
FUTURE
TODAY
18. National Action Plan for GHG Mitigation:
A Roadmap for Business Action
Presidential Regulation, No. 61, 2011
Mandates mitigation actions focused on:
• Agriculture
• Forestry and peatland management
• Energy and transport
• Industry
• Waste management
• Other supporting activities
46 pages of appendices: Strategy, actions, activities,
schedule, location, GHG mitigation impact, responsible
agency
18
INDONESIAN BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT
19. National Action Plan for GHG Mitigation:
A Roadmap for Business Action
2010-2014: 350 MW
of renewable energy
(biomass, geothermal,
hydro, solar)
2010-2014:
Energy audit and
managers in 9
cement, 35 steel
and 15 pulp/paper
companies
2010-14: Ecosystem
restoration on 2.5m ha
of forest land. Peatland
rehabilitation 250k ha.
19
INDONESIAN BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT
20. The Green Race is On
“The Green Race is on” between countries to
transform to low carbon economies and to become
leading suppliers of resource efficient technology &
solutions for future challenges
China Korea
– The leader in the race – Largest share of economic
– Focus of 12th 5-Year Plan stimulus devoted to
– Clean energy investment : “green” sector (80%)
No. 1 rank with 21% of India
$162 billion invested – Leading supplier of low cost
globally in 2009 solutions to domestic demand
– Taking lead on solar & wind from low-income sector
20
INDONESIAN BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT
21. Closing
• Sustainable business is smart business.
– Looks far ahead, anticipates trends and changing markets
• Society challenges ahead are too great to resolve
without collective effort and common Vision
• Mutual Reliance:
– Business cannot succeed in society that fails
– Society cannot succeed without business solutions to
major challenges ahead
INDONESIAN BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT
22. Thank you
www.ibcsd.or.id
Indonesia Business Council
for Sustainable Development
Menara Duta, 6th Floor
Jl. HR. Rasuna Said, Kav. B-9.
Jakarta 12910
Tel : +62 21 5290 1941-42
Fax : +62 21 5290 1949