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INTRODUCTION TO SUSTAINABILITY

Ari Sutrisno

Director

Company always fully supports implementation of sustainability practices and realizes that alignment of interests between environmental, social and governance aspects is key to moving forward for business sustainability in the future. Company continues to encourage good mining practices and principles to reduce impacts and mitigate risks to environment, social impacts and synergize with various stakeholders to achieve company goals.

As one of companies engaged in commodity industry, Company realizes magnitude of its responsibility in providing sustainability benefits for all stakeholders. To achieve corporate sustainability, Company prioritizes aspects of People, Planet, Prosperity, Peace and Partnership (“5Ps”). Company continues to carry out various innovations in mining world so that expected final result is in form of maximum benefits for stakeholders.

Company Facing COVID-19

COVID-19 pandemic poses a challenge for Company to be able to survive in an uncertain situation. Various adaptation strategies were carried out by maintaining a balance of economic, social and environmental performances to maintain Company's sustainability and contribute to achievement of Sustainable Development Goals in Indonesia.

Year 2022 is a year with full challenges. However, Company continues to strive to maintain and improve its performance in order to be able to serve and provide real benefits to community, especially local community. Company always ensures a balance of economic, social and environmental performances to ensure sustainability of Company, local community and environmental preservation by presenting various performance innovations to ensure sustainability of Company.

Transition of Energy and ESG Pressure

Energy transition from fossil-based energy to new and renewable energy is facing enormous challenges. Energy Triangle principle consisting of affordability (economics), security of supply (availability) and environment is main thing in energy transition process that must go hand-in-hand to be sustainable. Energy Triangle is influenced by complex factors, thus balancing these three factors cannot be easily realized in energy transition process. However, this energy transition process is unavoidable. There are at least five interrelated factors that form energy transition vector, namely: geopolitical and economic, environmental, social and governance, lifestyle changes, energy trend (electrification) and technology factors.

Amid various challenges and opportunities, energy transition is a necessity and a long-term perspective due to increasingly strong global drive to reduce level of Greenhouse Gas (“GHG”) emission. Energy transition is closely related to current ESG issue. This issue is an ongoing and unavoidable issue and must be faced in the future.

Portfolio Roadmap: Distinction and Balanced Business

Business development towards NRE is an alternative as a balancer to Company's current business. Collaboration with Astra Group to build solar PV rooftop is first step to increase competence in NRE sector. Solar PV technology is currently still developing and discovery of more efficient energy storage methods will change direction of solar PV development. In addition, opportunities in other NRE businesses such as: hydro and wind power plants will continue to be developed with right partners.

Company will also carry out comprehensive research and development to be able to utilize its coal assets through optimum coal downstream business. In-depth study on both industrial and technical aspects will begin in 2022 considering that there are many derivative products from coal, such as syngas (synthetic gas), hydrogen, ammonia, methanol and dimethyl ether. Other studies will also be carried out in areas that support NRE business, such as: solar PV technology, batteries and hydrogen based on environmentally friendly energy.

In addition, taking into account potential in the future, Company will conduct a study to increase proportion of mineral business segment (not limited to gold and copper) as a diversification strategy in order to provide business resilience. Opportunities to increase proportion of this business segment will be sought both through intensification and extensification at home and abroad.

People Roadmap: Employee Experience Focus

Development of employee and talent competencies continues to be prepared to face challenges and business growth in the future. COVID-19 pandemic has taught a lesson, that implementation of employee development can be done easily through online method. Development is strengthened by coaching and mentoring methods as well as on job learning so that results reach level of expert and good leadership.

Integrated PAMA experience and knowledge (“iPEAK”) as a knowledge management platform continues to be utilized and developed properly. With iPEAK platform, Company is able to carry out competency development process without being limited by having to be in a certain place, in line with new normal that is being undertaken during pandemic.

On the other hand, Company has prepared a blueprint in preparing organization and employees to enter a new business portfolio. This strategy includes development of engineers through training, workshops, apprenticeship programs as well as establishment and improvement of key competencies in energy (especially New and Renewable Energy), mineral and processing plant fields. Company also plans to acquire engineers through professional hire and establish cooperation with third parties. Execution of this strategy will involve a research and development team which will then be managed by Human Capital Development team.

Public Contribution Roadmap: Empowered Communities

Company is committed to creating a balance between business and social and environmental interests by strengthening social contributions to support realization of sustainable development, which is in line with second core value of Company, acting responsibly. This is done because of good economic condition of community, which indirectly has an impact on sustainability of Company's business and operations. Company's social and environmental responsibilities to community include development and improvement of community's economy, community health and nutrition, environmental management, education, skills development and courses, social facilities and activities related to culture and religion.

Appreciation

All of these presentations have meaning through concrete actions in every process of working together. Through hard work and smart work in all fields by all group personnel, Company believes that in the future it will remain Pride of Group by making a significant contribution to both AHEMCE Group and Astra Group and playing a role in realizing Astra Goal 2030 and Astra Vision 2040.

Ari Sutrisno
Director