Fulfilling ESG Rating, IPB University Expert Team Guides Pertamina Pendopo to Formulate BAP
IPB University’s expert team led by Prof Hefni Effendi assisted Pertamina Pendopo in formulating an innovative Biodiversity Action Plan (BAP). This BAP was formulated as an effort to improve the environmental, social, and governance (ESG) rating.
BAP is one of the company’s concrete initiatives to demonstrate its commitment to environmental, social, and good corporate governance principles.
Prof Hefni said, with BAP, Pertamina Pendopo not only cares about the environment, but also about long-term business sustainability.
“This collaboration is clear evidence of how academia and industry can work together to overcome environmental challenges. The resulting BAP is expected to be a model for other companies in managing operational impacts on the environment,” he said.
ESG is a framework used by companies to evaluate the social and environmental impacts of their operations. ESG covers three main pillars: environmental, social, and governance.
The environmental aspect focuses on the company’s impact on the environment, such as carbon emissions, waste management, natural resource use, and biodiversity.
The social aspect covers the company’s relationship with the community, employees, and other stakeholders, such as fair labor practices, human rights, and corporate social responsibility.
The governance aspect relates to the leadership structure, internal control system, and transparency in corporate decision-making.
BAP is defined as a strategic plan designed to protect and conserve biodiversity in a company’s area of operations. BAP includes various actions, one of which is an inventory of the types of plants and animals that exist in an area.
It also includes habitat mapping by determining the location of critical habitats for protected species. Impact mitigation to manage the negative impacts of company activities on biodiversity by adhering to the mitigation hierarchy (avoidance, minimization, restoration, offset, and Additional Conservation Action/ACA).
In addition, BAP also strives for Net Positive Impact (NPI) by creating an implementable and measurable action plan. Finally, monitoring and evaluation aspects to monitor the effectiveness of the actions that have been taken.
These materials were presented by Prof Hefni Effendi and Luluk DW Handayani, MSi as a result of a study on Pertamina Pendopo’s work area in South Sumatra, at the “Workshop and FGD Monitoring KPI ESG Environment Aspects in 2024 in the Upstream SubHolding Environment, Pertamina Hulu Energi” at JW Marriott Hotel Medan, last week.
“BAP has become one of the key performance indicators (KPI) on the environment implemented by Pertamina Persero. BAP acts as one of the components assessed in the ESG rating. BAP is also required by the International Financial Corporation (IFC) as one of the environmental components that must be assessed,” said Prof Hefni.
IFC, as an international financial institution that focuses on investment in developing countries, has strict environmental and social standards. One of the important aspects considered by IFC is the impact of investment on biodiversity.
Therefore, Prof Hefni said, BAP is an important instrument to ensure that projects funded by IFC are not only financially profitable, but also environmentally sustainable. (*/Rz) (IAAS/RUM)
