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Pan Brothers is first Indonesian manufacturing firm to get net zero targets approved by SBTi

The textiles and garments company, which supplies global brands such as Adidas, Uniqlo and The North Face, is only the second Indonesian firm to get its decarbonisation plan rubber-stamped by the Science Based Targets initiative.

Pan Brothers factory
Pan Brothers' near and long-term decarbonisation targets have been approved by the Science Based Targets initiative. The company has committed to reduce its Scope 1 and Scope 2 emissions by 50.4 per cent by 2032 and its Scope 3 emissions by 30 per cent by the same year. Image: Pan Brothers

Textiles and apparel manufacturer PT Pan Brothers has become one of the first Indonesian companies to get its decarbonisation targets approved by the Science Based Targets initiative (SBTi), a standards body that assesses whether or not corporate net-zero goals go far enough to stop climate change.

The stamp of approval from SBTi, which validates net zero targets in line with the Paris Agreement goal of keeping global warming within 1.5 degrees Celsius, is a significant achievement for a large business in Indonesia, where the electricty grid is powered mainly by coal and there is limited access to renewable energy.

Pan Brothers has committed to cut its Scope 1 and Scope 2 emissions – that is, its direct and indirect emissions – by 50 per cent from a 2022 baseline by 2032, and cut its Scope 3, or full value chain emissions, by 30 per cent by 2032.

To cut its Scope 2 emissions, or purchased electricity, Pan Brothers is increasing the use of solar to power its 23 factories and has been looking to upgrade its boilers to run on biomass. Increasing energy efficiency will also be key, said Satrio Boediarto, who heads up sustainability for Pan Brothers.

Moving away from fossil fuels and pivoting to renewable energy is not easy for corporations in Indonesia, because of a cap on the amount of renewables they are permitted to use. Indonesia’s main grid is currently oversupplied by coal-based electricity.

Scope 3 emissions account for the biggest portion of the firm’s footprint and come mainly from the imported materials used to produce the 117 million pieces of clothing it manufactures a year, the transport and distribution of its products, the commute of its 29,000 employees, and waste.

Pan Brothers followed SBTi’s guidance for the apparel and footwear sector, which was introduced to help decarbonise an industry that accounts for 6 to 8 per cent of global emissions – more than the combined carbon footprint of the shipping and aviation industries.

The 44-year-old firm is only the second large Indonesian firm to achieve SBTi approval for its decarbonisation ambitions. Ride-hailing and e-commerce firm GoTo, which owns the Gojek and Tokopedia brands, announced SBTi approval in December.

GoTo has committed to achieve net zero across its full value chain by 2050, cutting Scope 1 and Scope 2 emissions by 83 per cent by 2030 from a 2022 baseline, and cutting Scope 3 emissions by 51 per cent within the same timeframe. The firm is relying heavily on electrifying its fleet of vehicles to decarbonise.

The main challenge in getting its net-zero targets SBTi approved was obtaining data from all of the company’s 10 subsidiaries, Boediarto said. “The interpretation of the terms used and the actual data needs to be mapped correctly and understood well, otherwise the data might not tell an accurate story,” he told Eco-Business.

Like other companies in its sector, Pan Brothers has had to slash emissions to stay competitive in increasingly carbon-conscious global supply chains. The garment and textiles industry committed to cut emissions by 30 per cent by 2030, with Pan Brothers’ customers, which include Uniqlo, Lacoste and The North Face, among key companies to have made the pledge.

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