Industrial Afforestation Business
Interactions Between Industrial Afforestation and Nature
The Marubeni Group identifies Environmental and Social Materialities—namely, “Contributing Toward Measures in Response to Climate Change,” “Contributing Toward the Realization of a Society That Is in Harmony with Nature,” “Contributing Toward the Building of the Circular Economy,” and “Human Rights & Co-development with Communities”—to anticipate customer and societal challenges, provide solutions, and drive its own growth. In the context of the relationship between business and nature, forest-related businesses hold significant importance. The Marubeni Group owns afforestation business in two countries of Indonesia and Australia with a total of approximately 120,000 hectares of tree plantable land. In particular, the industrial afforestation business in Indonesia is a critical element not only as an opportunity for transitioning to nature positive practices but also as a contributor to the growth of our Group (for details, please refer to “TCFD Disclosures: Long-Term Strategy on Climate Change – Marubeni Group’s Initiatives Leading the Transition to a Low-Carbon and Decarbonized Society, Section 3) Initiatives in the Forestry and Afforestation Sector”). Furthermore, as mentioned earlier, an analysis of nature-related dependencies and impacts across the Marubeni Group’s value chain revealed that, in direct operations, the industrial afforestation business is particularly material from the perspective of dependency. Accordingly, this year, we conducted a detailed analysis of the industrial afforestation business following the LEAP approach.
First, we evaluated sensitive locations among the business sites. The analysis identified the ecosystem services depended upon and the impact factors affecting nature in the industrial afforestation business in Indonesia, which was assessed as a sensitive location. Subsequently, we identified risks and opportunities arising from these dependencies and impacts and conducted a qualitative evaluation of their significance. Furthermore, risk items evaluated as highly significant and requiring priority action were linked to Green Strategy and existing initiatives. The details of each evaluation are presented below.
Evaluation of Sensitive Locations [Locate]
To identify sensitive locations among our business sites, we conducted an analysis using the following indicators. These indicators were selected from the WWF Biodiversity Risk Filter (BRF) data, corresponding to three of the four TNFD areas for sensitive locations: Areas important for biodiversity, Areas of high ecosystem integrity, and Areas of high physical water risks. According to the WWF BRF, a score of 3.4 or higher is considered high risks. Therefore, we designated sites with scores of 3.4 or above for each indicator as “Sensitive Locations.”
The results are as follows: In certain regions of Indonesia, there are numerous protected areas near our business sites, and compared to other regions, the ecosystem integrity is high, confirming that these are locations of significant value to nature. Additionally, PT. Musi Hutan Persada (MHP), located in Indonesia, is not only responsible for producing materials for the Marubeni Group’s key pulp-related products but, as mentioned earlier, is also critical to our growth. Therefore, we have identified nature-related issues in MHP’s industrial afforestation business and formulated strategies targeting it as part of the Division-Specific Green Strategies.
- The ratio of water demand from human activities to the available water resources.
- Water that falls as precipitation and either flows over the surface into rivers or infiltrates the soil to become groundwater.
Identification of Dependencies and Impacts [Evaluate]
Focusing on the industrial afforestation business in Indonesia, we identified the specific dependencies and impacts relevant to the actual operations.
To identify these dependencies and impacts, we reviewed business information and management practices owned by MHP, and conducted interviews with on-site personnel, and verified the actual extent of dependencies and impacts. As a result, the material dependencies and impacts on nature specifically related to MHP’s industrial afforestation business in Indonesia were identified as follows:
It was found that the company is particularly dependent on provisioning services related to the trees themselves, such as biomass and genetic material, as well as on regulating and maintenance services, including soil quality regulation necessary for growth, suppression of natural disasters such as floods and landslides, and the nursery population and habitat maintenance.
While the plantation site was established on bare land, and thus the ecological impact from land modification is deemed non-material, we recognize the importance of engagement with various stakeholders regarding the land. Social engagement in the region is carried out in collaboration with diverse stakeholders, including landowners, NGOs, government sectors or agencies, communities, and interest groups. Numerous communities with rights exist within the permitted boundaries of the business, and our corporate social responsibility team regularly visits these villages to ensure harmonious relationships are maintained.
Furthermore, as part of efforts to foster greater harmony with local communities, MHP implements a regional collaboration initiative called the Partnership Program. A notable example is a scheme where local communities provide land for growing eucalyptus, and MHP shares the economic benefits generated after harvesting with these communities. To date, approximately 1,000 hectares have already been planted under this program, with plans for further expansion in the future.
Identification of Risks and Opportunities [Assess] / Future Initiatives and Activities [Prepare]
To identify nature-related risks and opportunities, we categorized the activities of the industrial afforestation business into two segments: “Planting” and “Logging (final cutting).” We then assessed the risks and opportunities for each segment arising from the dependencies and impacts on nature identified in the previous section. For the identified risks, we conducted a qualitative evaluation of their significance based on two axes—impact severity if the risk materializes and likelihood of occurrence— while considering the actual operational details of MHP. Based on the evaluation results, for items identified as major risks in Indonesia’s industrial afforestation business, we implemented existing risk mitigation measures and integrated additional responses and opportunities into the Division-Specific Green Strategies. A list of major risks, opportunities, and corresponding measures is provided below.
In particular, physical risks were identified as significant, including acute risks such as “damage to trees, infrastructure, and employees due to natural disasters” and chronic risks such as “decreased timber productivity and changes in the environment of planting site due to climate change” and “spread of tree diseases due to monoculture planting.” One of the Division-Specific Green Strategies related to MHP’s operations, the “biochar business utilizing forest residues and downstream pulp mill residues,” contributes to reducing greenhouse gas (GHG) emissions and maintaining soil quality regulation, a key aspect of the planting environment. As an opportunity to address issues through impact reduction and create further value for the Marubeni Group, we have formulated and are actively pursuing Division-Specific Green Strategies to advance this initiative.
Forest Products Division (Lifestyle Division from April 2025) Green Strategy for MHP (Examples)
- Promoting green businesses through forest value creation business (maximizing the economic and environmental value of MHP’s operations, generating carbon credits through environmental afforestation, etc.).
- Sustainable forest management/forest conservation and multipurpose utilization of forest-derived products (product-specific procurement policies).