03 Jul 2020 | THK Natural Capital, Carbon and Communities International Advisory Council on Investment

Following the THK Presidential Council on Investment and the SDGs forum held in January 2020 in Davos , the International Advisory Council of Natural Capital, Carbon and Communities (NCCC) was launched under the auspices of the Tri Hita Karana Forum with President of Indonesia as founding honorary Patron and the Government of Indonesia to align THK global partners and investment community to support Indonesia’s aspiration as natural capital super power and transition towards a low carbon economy.  Chair of the Advisory Council is Guido Schmidt-Traub, Executive Director of UN SDSN with Founding Council members comprising THK Forum partners such as World Economic Forum, International Chambers of Commerce, OECD, SYSTEMIQ/Global Blended Finance Taskforce, IDH (the sustainable trade initiative), World Resource Institute, Conservation International as well as leading figures such as Paul Polman, academia such as Lord Nicholas Stern from LSE/NCE and Dr Ma Jun from Tsinghua University.

On July 3^rd 2020, the THK Forum held an online forum for its Natural Capital, Carbon and Communities (NCCC) initiative in coordination with Indonesia Coordinating Ministry of Maritime Affairs and Investment and Coordinating Ministry of Economic Affairs to discuss the development of a carbon credit bond for Indonesia.

NCCC’s international advisory council members proposed the issuance of the Natural Capital Carbon Bond to help Indonesia taps into the international climate finance with keen interest from investors. The bond is expected to attract sizable investments of around USD $5 billion generating upfront finance for Indonesia. This will enable Indonesia to ease the burden of the government’s budget in uplifting the economy during COVID-19 while reducing deforestation and protecting 42.3 million hectares and restoring 3 million hectares of forest and peat in four intact forest cover provinces. At the same time, it is also expected to enhance the livelihoods for more than 60,000 rural people in the region. The proposed Natural Capital Carbon Bond was presented by IDH, a founding member council organisation of the NCCC.

The forum discussed what would be required of the Government of Indonesia (GOI) in terms of regulations, governance structures for use of bond proceeds, and the necessary internal coordination within GOI and between GOI as well as with external stakeholders supporting the Natural Capital Carbon Bond.

The forum was opened by Dr Guido Schmidt-Traub (Executive Director of UN SDSN), Chair of the NCCC’s International Advisory Council and the discussion moderated by Paul Polman (Co Founder of IMAGINE and Chair International Chamber of Commerce), Founding Council member of the NCCC initiative.

Founding Council member Jorge Moreira da Silva (Director of OECD DAC) gave a brief update on the progress of the Tri Hita Karana Blended Finance Roadmap including OECD research work on COVID-19 and Blended Finance.

The forum was graced by H.E. Luhut Panjaitan, Coordinating Minister of Maritime Affairs and Investment and H.E. Airlangga Hartarto Coordinating Minister of Economic Affairs as well as Bapak Luky Alfirman, Director-General of Budgeting Financing and Risk Management of the Ministry of Finance. The forum was attended by close to 40 participants across the three ministries, THK Partner PT SMI, Standard Chartered, DBS Bank and Royal Lestari Utama. NCCC’s Founding Council members who participated were Peter Seligman, Chairman, Conservation International, Joost Oorthuizen, CEO, IDH, Jeremy Oppenheim SYSTEMIQ/Global Blended Finance Taskforce, Nikki Kemp representing World Economic Forum and Tom Owen-Edmunds representing World Resources Institute.