Skip to content

Indonesia takes another giant step to curb deforestation and protect the climate

Green Century’s 2015 investor letter continues to make an impact

In 2015, Green Century helped organize more than 60 investors representing more than $2 trillion in assets under management (AUM) to issue a letter to the Indonesian President, Joko “Jokowi” Widodo, supporting his efforts to implement a forest moratorium, prohibiting the issuing of new licenses to establish palm oil plantations on parcels of land within the country’s forest zone. In addition to assisting with the formalization of the moratorium, our letter to President Widodo helped establish the Badan Restorasi Gambut (BRG), or the Republic of Indonesia Peatland Restoration Agency.

Palm nuts are sorted during the palm oil production process. Image credit: Palm nuts in volumn by oneVillage Initiative. Licensed under CC BY-SA 2.0

In April, the moratorium became law and by July both the moratorium and Agency had already been credited with sparing 850,000 hectares (3,300 square miles) of Indonesia’s forest zone, which prompted the government to announce that the restriction would remain in effect for five years. According to our partners at Chain Reaction Research, in the beginning of December the Republic of Indonesia revised its peatland regulations to target a permanent peatland moratorium. The revisions include: a moratorium on any new land clearing in peatlands, a prohibition on the building of any new canals, and making it illegal to burn peatlands. Not only do these revisions go beyond the restrictions presented in the original regulation, they offer concrete examples of how detractors will be held accountable through government enforcement via a monitoring and verification process.  According to Minister of Environment and Forestry, Dr. Siti Nurbaya, “The government is unwilling to bear the costs of restoring peatlands that are burned in concession areas. If companies fail to comply with the revised peat regulation, they will be forced to face administrative sanctions from the government.”

Revisions to the current regulation could equal an emissions reduction of 5.5 to 7.8 gigatons of carbon dioxide, which is equivalent to nearly all the greenhouse gases emitted in a year by the United States.

As advocates of environmental stewardship and as investors, Green Century applauds these efforts by the Indonesian government that will benefit the environment and human health. We are pleased that our efforts through the signature Forest Protection Shareholder Advocacy Campaign continue to help mitigate the environmental damage and business risks associated with unsustainable deforestation and at-risk forest commodities.

You can learn more about our Forest Protection Campaign, which is working to transform the international supply chain of forest risk commodities on our website. The campaign, which began with palm oil in Indonesia and Malaysia, is now expanding to soy, cattle, pulp, paper, and rubber in South America and Africa.

You can also learn more about our Shareholder Advocate’s recent trip to Indonesia, where she participated in the United Nations Principles for Responsible Investment (PRI) In Person conference, and collaborated with companies, investors, policy makers, and other stakeholders to get a first-hand look at how zero deforestation policies are being implemented, by visiting our Green Century commentary webpage. There you will find several blogs about “On the Ground: Working Toward Sustainable Palm Oil.”

You should carefully consider the Funds’ investment objectives, risks, charges, and expenses before investing. To obtain a Prospectus that contains this and other information about the Funds please click here, email, or call 1-800-934-7336. Please read the Prospectus carefully before investing.

Stocks will fluctuate in response to factors that may affect a single company, industry, sector, country, region, or market as a whole and may perform worse than the market. Foreign securities are subject to additional risks such as currency fluctuations, regional economic and political conditions, differences in accounting, and other unique risks compared to investing in securities of U.S. issuers. Bonds are subject to risks including interest rate, credit, and inflation. The Funds’ environmental criteria limit the investments available to the Funds compared to mutual funds that do not use environmental criteria.

This information has been prepared from sources believed reliable. The views expressed are as the date of publication and are those of the Advisor to the Funds.

The Green Century Funds are distributed by UMB Distribution Services, LLC. 12/16