Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• 14 factories received The Green Industry Award (9 Level 5, 2 Level 4); 13 factories received PROPER awards (5 Green, 8 Blue)
• Implemented 3R (reduce, reuse, recycle) activities in all factories
• Achieved ISO 14001:2015 certification from TUV Rheinland
• Reduced energy consumption to 181 kWh/ton of product (efficient compared to Green Industry standard of 200 kWh/ton)
• Reduced water consumption to 26.96 m3/ton of product (efficient compared to Green Industry standard of 35 m3/ton)
• Optimized recycled water use to 36.04%
• Reduced CO2 emissions to 152 tons CO2/ton of product (efficient compared to Green Industry standard of 220 tons CO2/ton)

Social Achievements

• Collective Labor Agreements with employees on equality, forced labor, and child labor
• Implemented smallholder capacity development and community development programs (693 groups, 19,510 families)
• Distributed aid packages (formic acid: 10,724 liters; fertilizers: 15,000 kg)
• Implemented OHS training in all factories (safety awareness, emergency response, safety patrols)
• 71 employees participated in self-improvement training

Governance Achievements

• Annual General Meeting of Shareholders (GMS) held on June 24, 2022
• Established Audit Committee and Nomination and Remuneration Committee
• Implemented internal control system based on COSO framework
• Implemented risk management system based on ISO 31000:2018
• Established Kirana Megatara Whistleblower System (KMWBS)

Climate Goals & Targets

Environmental Challenges

• Decreased demand from the automotive industry due to the pandemic, inflation, and economic recession
• Decreased rubber prices and demand
• Reduced raw material supply and high competition
• Increased operational costs (logistics and energy)
• Fluctuations in natural rubber prices
• Interest rate risk due to floating interest rates on bank loans
• Exchange rate risk due to multiple currencies used in business activities
• Liquidity risk due to high working capital needs
• Raw material supply risk due to dependence on traders and farmers
• Credit risk due to potential customer defaults
• Operational risk due to geographically dispersed factories and complex production processes
• Legal risk due to potential lawsuits or regulatory changes
• Compliance risk due to potential violations of laws and regulations
• Reputation risk due to potential negative publicity
• Strategic risk due to improper strategy implementation
• Natural disaster risk due to Indonesia's vulnerability to natural disasters
• Information technology (IT) risk due to potential data loss, software failures, or cyberattacks

Mitigation Strategies

• Cost Reduction Program (CRP)
• Adjusted sales composition of LTC and SPOT
• Implemented strict efficiency measures
• Undertook massive yokoten (adopt best practices)
• Focused on people development
• Increased collaboration with third parties
• Long-term sales contracts (LTC) to mitigate price fluctuations
• Natural hedging to manage commodity price risk
• Continuous analysis of working capital needs and interest rate trends
• Loans in US$ to mitigate exchange rate risk
• Continuous analysis of cash to cash lead time
• Syndicated credit facilities from banks
• More accurate purchase planning
• Increased cooperation with farmer groups
• Supplier retention programs
• Corporate Social Responsibility (CSR) programs
• Development of Company's rubber plantation business
• Focus on top 20 world tire companies
• Letter of Credit and prepayments for some customers
• ISO 9001 and ISO 14001 certification for factories
• Integrated information system architecture (SAP ERP and Kiranalytics)
• Consistent implementation of Quality Manual
• Bokar Institute and Factory Operation Development Program
• Strengthened Occupational Safety and Health and Environmental Management System
• Ensuring completeness and validity of legal documents
• Periodic checking of regulations and procedures
• Commitment to good corporate governance
• Awareness of negative covenants
• Creating a positive image through publications and stakeholder engagement
• Collaboration with senior management at PT Triputra Investindo Arya
• Emergency Response Teams and disaster management procedures
• Property All Risk Insurance and Earthquake Insurance
• Business Continuity Plan
• Disaster Recovery Plan
• Firewall, hardware, and licensed applications

Supply Chain Management

Responsible Procurement

• Direct partnerships with smallholder groups
• KMG Supplier Code of Ethics

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN-Sustainable Development Goals (UN-SDG), International Labor Organization (ILO), ISO 31000:2018

Certifications: ISO 14001:2015, ISO 9001

Awards & Recognition

• Indonesia Green & Sustainable Companies (IGSCA) 2022
• The Living Legend Companies 2022 & Indonesia Respectful Legends Companies
• Indonesia Conference & Competition Occupational Safety And Health (ICC-OSH) 2022 awards (3 star and 4 star)
• International Quality and Productivity Convention (IQPC) awards (2 Excellent, 1 Outstanding)
• Temu Karya Mutu dan Produktivitas Nasional XXVI (TKMPN) awards (Platinum and Gold)
• International Convention on Quality Control Circle (ICQCC) awards (Gold)

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced GHG emissions intensity by 10%
• Increased renewable energy share to 39.26% of total energy use
• Reduced water consumption intensity by 10%
• Increased recycled water usage ratio to 37.43% of total water use
• No waste disposed of by open burning
• Ammonia level below 2,000 ppm

Social Achievements

• Increased the number of smallholders receiving training on Good Agricultural Practices by 15%
• Increased the number of smallholders participating in partnership programs by 15%
• Maintained a 96.6% local workforce ratio
• Maintained 100% of permanent employees with written employment contracts
• No child labor in operations

Governance Achievements

• Implemented a comprehensive risk management system aligned with ISO 31000:2018
• Established a whistleblower system (KMWBS)
• Implemented an anti-corruption policy
• Consistently complied with all applicable laws and regulations

Climate Goals & Targets

Environmental Challenges

• Decreased sales due to lower average SICOM price and sales volume
• Global economic uncertainty and fluctuating raw material prices
• Supply chain disruptions due to reliance on smallholders and traders
• Fluctuating natural rubber prices
• Interest rate risk due to floating interest rates on bank loans
• Currency risk due to US$ denominated sales
• Liquidity risk due to low profit margins
• Operational risks due to geographically dispersed operations
• Legal risks related to legal compliance
• Compliance risks related to adherence to laws and regulations
• Reputation and strategic risks related to negative publicity and strategic misalignment

Mitigation Strategies

• Long-term sales contracts (6-12 months) to mitigate price volatility
• Continuous monitoring of interest rates and currency exchange rates
• Development of smallholder partnership programs to secure raw material supply
• Accurate sales forecasting and inventory management
• Mitigation strategies for currency risk through US$ denominated loans
• Standardization of production processes and integrated information systems
• Strengthening of occupational safety and health management systems
• Implementation of good corporate governance (GCG) principles
• Continuous monitoring of legal and regulatory changes
• Risk mitigation strategies for reputation and strategic risks through senior management oversight and alignment with Tripura Group
• Disaster preparedness plans and insurance coverage for natural disasters
• Data backup and security measures to mitigate IT risks

Supply Chain Management

Supplier Audits: 52% of smallholders and 27% of private plantations assessed for environmental and social risks in 2023

Responsible Procurement

• Kirana Megatara Supplier Code of Ethics
• Partnership programs with smallholders
• Traceability initiatives

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Forest fires

UN Sustainable Development Goals

• Goal 8: Decent Work and Economic Growth
• Goal 9: Industry, Innovation and Infrastructure
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action
• Goal 15: Life on Land
• Goal 17: Partnerships for the Goals

Initiatives contribute to these goals through sustainable practices, community engagement, and responsible resource management.

Awards & Recognition

• Indonesia Best Companies in HSE Implementation 2023 (SWA)
• Indonesia Green & Sustainability Companies Award 2023 (SWA)
• Awards in Indonesian Conference & Competition on Occupational Safety and Health (ICC-OSH) 2023
• Awards in International Quality and Productivity Convention (IQPC) 2023
• Awards in International Convention on Quality Control Circle (ICQCC) 2023
• Awards in National Quality and Productivity Workshop XXVII (TKMPN) 2023