Pertamina

Pertamina has set one target, which is to reduce its scope 1 and 2 emissions by 30% by 2030 from 2010. With such an early baseline year, the target lacks sufficient ambition and is unlikely to drive the emissions reductions the company requires to align with its 1.5˚C pathway. Moreover, the company does not have any targets covering scope 3 emissions, nor any long-term or net-zero targets. In addition to setting scope 3 and long-term targets, the company should set more intermediate targets to incentivise near-term actions on long-term goals.

Pertamina has some low-carbon business activities, including solar energy generation, biogas, and geothermal energy. The company does not disclose the revenue generated from these activities, but the proportion of power produced from these activities remains negligible compared to the company’s hydrocarbon activities. The company also does not report its investment or growth plans for these business activities. To transition away from fossil fuels, Pertamina needs to increase investment in its biogas and geothermal operations to grow these into a profitable business in a low-carbon future.

Pertamina has one target; to reduce scope 1 and 2 absolute emissions by 30% by 2030 against a 2010 baseline. Further, it aims to explore green hydrogen production with a pilot project set to produce 100 kilograms per day by 2023. It plans to expand its renewable energy capacity to 5 gigawatts (GW) by 2026 from 0.7 GW in 2021, but it does not provide details regarding its investment or deployment plan for this. The company is still dedicated to exploring for new fossil fuel reserves.

Pertamina does not have a comprehensive transition plan. It has an emissions reduction target and does plan to grow its “new and renewable energy” (NRE) activities. However, these activities appear to mainly include unconventional fossil fuel sources, such as shale gas and oil, rather than low-carbon activities such as wind energy. The company has not set out any long-term actions to transition to a low-carbon business.

Pertamina produced over 4,600 gigawatt hours (GWh) of energy from geothermal sources in 2021. It has three biogas power plants with a 4.4 megawatt (MW) capacity, running on palm oil liquid waste. However, these activities are still small in size in comparison to its fossil fuel activities. The company’s board does have oversight of climate changes issues; however, they do not have the relevant expertise.

Pertamina has slightly increased its solar, biogas and geothermal energy production. However, its fossil fuel production has not meaningfully decreased over this time. Pertamina is one of the few companies in the benchmark to show a sharp increase in scope 1 and 2 emissions intensities in the past few years. The company has not conducted climate scenario testing, and so its current strategy is not informed by the risks and opportunities of a 1.5°C future.

Pertamina’s transition plan is incomplete and lacks short-, mid- and long-term targets that cover all emission scopes. The company does not disclose how much it invests in low-carbon energy, and while it plans to increase its renewable energy activities, it also plans to increase its fossil fuel activities through new unconventional sources.

No evidence was found of the company’s commitment to social dialogue or of the categories of stakeholders the company engages with on a just transition. Furthermore, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. No evidence was found of the company undertaking just transition planning to mitigate the social impacts of the low-carbon transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in just transition planning.

No public commitment by the company was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found of the company’s action to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks. No public commitment by the company was found stating its intention to re- and up-skill workers displaced by the transition to a low-carbon economy. Additionally, no evidence was found that the company re- and up-skills workers in a way that ensures gender balance and inclusion of vulnerable groups.

No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders. No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

The company commits to respecting human rights and provides a grievance mechanism where human rights violations can be reported. It can, however, strengthen its performance and disclosure on several human rights topics, including its human rights due diligence.

The company is committed to the health and safety of its workers and expects the same of its business relationships. Furthermore, the company discloses some information about the diversity of its workforce. However, it can strengthen its performance and disclosure on several key decent work topics, including living wages and collective bargaining.

The company has a publicly available global tax strategy. It also prohibits bribery and corruption and describes its process for identifying bribery and corruption risks. The company can, however, strengthen its disclosure on several key ethical business topics, including personal data protection, the taxes it pays in individual jurisdictions and its lobbying and political engagement.