NDPE update
The company has upgraded its sustainability policy so at to include
NDPE
commitments for its supply chain, with the aim to build a traceable, transparent, and sustainable palm oil production, ultimately achieving 100% group-wide compliance. The strategy was reviewed and approved by &Green’s Credit Committee in 2020; in 2021, DSNG began rolling-out the strategy, starting with its seven concessions and six mills in the East Kalimantan province, which accounts for nearly 75% of DSNG’s
CPO
production. In 2022, the plan is to initiate the roll-out in the four other mills located in three other provinces in Kalimantan.
Social Inclusion Progress
The smallholder assistance program developed in 2021 – and that will start running in 2022 – is part of the traceability activities carried out by DSNG to further ensure that suppliers comply with the company’s NDPE Policy. The assistance program fosters constructive relationships between DNSG and smallholder communities in the
Landscape
. The focus will be to support them through capacity building and agronomic consulting to improve their yields and encourage the adoption of sustainable practices; both activities will likely increase smallholders’ incomes directly. Thanks to the program, a total of 8,153 smallholders benefitted from DSNG’s continued services in 2021.
Creating jobs is one of DSNG’s social inclusion goals, as job opportunities improve the community’s welfare and reduce the need for people to further clear forests, eventually decreasing the impact of climate change caused by forest clearing. In 2021, the number of employees benefitting from DSNG operating contracts reached 9,743. Additionally, 788 people were employed through transport service contracts and 20 people were hired for construction work.
Implementation of ESMS
Over the past year, DNSG has built its Environmental and Social Management System, which is applicable to all business units, following the IFC Performance Standards. In the following years, DSNG will focus on rolling out the ESMS internally to all its subsidiaries and to its suppliers. As per &Green’s monitoring, reporting and verification framework, a third-party independent audit will be carried out in the first quarter of 2022 to assess the alignment of DSNG’s 2021 ESAP submissions, including its ESMS, against the IFC Performance Standards.
Off concession conservation
DSNG has committed to conserve 3,543 hectares of forest outside its concession areas in the East-Kalimantan landscapes; this will be complemented by additional forest conserved on its suppliers properties through the enforcement of the NDPE. In 2021, DSNG commissioned a feasibility study to evaluate its supply-shed area, assess the quality of the forest left and conservation values, as well as the types of
deforestation
threats and the existence of on-going forest conservation programs. The study was carried out by external experts and included GIS analysis, field surveys, and stakeholder consultations. It led to the demarcation of two conservation areas and to the design of tailored forest protection strategies, in joint collaboration with local stakeholders. These plans help DSNG anchor the forest conservation ambitions outside its concession that relate to the company’s supply chain NDPE.
Inclusion in new ESG Indices and ranking upgrades
In 2021, DSNG was included in two new ESG Indices developed by a collaboration between the Indonesia Stock Exchange (IDX) and the Biodiversity Foundation (KEHATI), namely ESGQ 45 and ESGS KEHATI; in the latter, DSNG was added as one of only two palm oil players among 25 listed companies.
For the second consecutive year, DSNG also received ranking upgrades in the Zoological Society of London (ZSL) SPOTT* Index ranking, which publishes transparency assessments of commodity producers and traders. DSNG is the only oil palm plantation company based in Indonesia in the top 10 of the SPOTT ranking.
*Sustainability Policy Transparency Toolkit is a free, online platform supporting sustainable commodity production and trade. It is used as a barometer by international investors on sustainability.
&Green is proud to witness the successes that its
clients
achieve post-investment and how its environmental and social efforts contribute to the implementation of corporate best practice. &Green seeks to demonstrate, through its investments, that
E&S
implementation drives
transformational change
within organizations that distinguish companies from their competitors. And through this peer separation, &Green’s portfolio companies drive change across sectors like palm oil, which are often criticized for poor E&S performance.
Financial performance
DSNG has met all of its financial commitments over the year (i.e. its interest payments and financial covenants), and continues to be a strong counterparty for &Green. DSNG benefited from the strong
CPO
price over the past 18 months and continues to reduce its leverage while investing in emissions reduction and other forest-positive initiatives, such as methane capture and biogas production as well as solar power installation.
