The forestry industry may not be the first that comes to mind when thinking of sustainability. But Lestari, a family-owned wood product company headquartered out of Indonesia, has pioneered sustainable business practices in the space as far back as 1985, when it made its first community forest in collaboration with the local residents of Sumatra.
While sustainability has always been in Lestari’s organizational DNA, the company has evolved its responsibilities in this area. As a pioneering steward of the environment, at first, it was merely enough to engage in sustainable practices. As more of its customers—including the likes of Faber-Castell and Schwan-Stabilo—started to have more technical questions about its carbon footprint, the organization realized it had to be more scientific in its approach to sustainability.
For this task, the Lestari team reached out to Unravel Carbon, which proved instrumental in preparing the organization to meet the increasingly challenging requirements in sustainability.
We sat down with Melissa Kowara, Head of Sustainability at Lestari, who shared more about their journey.
What led to Lestari’s commitment to action on climate change and supporting the climate ambitions of your key customers?
Since our inception, Lestari has acknowledged the need to maintain and conserve the parts of the forest that we use. For example, we never use any wood that contributed to deforestation, and we dedicate ourselves to using other sustainable practices within the forestry industry.
In 1999, this commitment led us to acquire our first certification from the Forest Stewardship Council (FSC). Despite the fact that climate change was still not well known at the time, our founder thought that sustainability was the right thing to strive for. We had to ensure that every product we produced also upheld the same values.
This belief has always been reflected in our production facilities. We never use coal. We use waste wood for essential functions like the boiler engine. We also maximize reusing whatever waste we produced. These practices are actually embedded within our brand. Lestari means “sustainable” in Bahasa.
Eventually, the problem of climate change became more known, and we even experienced it first-hand. In 2020, the big floods in Indonesia ravaged one of our facilities. This made the issue even more real to us: Sustainability is not only about loving the planet - it’s a matter of survival for both ourselves and our business. Business as usual cannot continue unless our operations are aligned with the best sustainability practices.
Given the importance of sustainability, it’s a growing concern among the middle to upper segments of the market which we’re targeting, most of which reside in the United States and the European Union. They seek quality products, and integral to that is sustainability and environmental, social, and governance (ESG) performance.
As part of the buying process, they started to ask questions like: What’s the carbon footprint of your products? Is Lestari carbon neutral? When did you begin your sustainability practices? This new line of inquiry was a watershed moment: We realized it was no longer enough to commit to sustainability - we had to document our progress so that it can be properly communicated and others could follow suit. In short, we had to know our numbers: our carbon footprint.
Why did you decide to work with the Unravel Carbon team?
When I asked for referrals on who could help us calculate our carbon footprint, I was referred to Grace Sai, and her Unravel Carbon co-founder Marc Allen. We were excited to get in on the ground floor of what could be a major force in sustainability.
We were highly excited to collaborate because this solution did not exist in the market at the time, even though organizations increasingly need to be able to calculate their carbon footprint in a quick and automated way.
What was particularly novel about Unravel Carbon was that the measurement was only the first step. After the data is tabulated, Unravel Carbon helps organizations with decarbonization: How can they get most efficiently toward Net Zero?
Another motivation for achieving this goal was revenue: If we were able to achieve carbon negativity, we could eventually sell carbon credits to our customers, which was a major plus point for us. Now, not only that these initiatives are a good step for setting the tone to protect our environment, but they would be made financially sustainable by generating a new source of revenue for us.
We know this approach was innovative because we had explored alternatives before settling on Unravel Carbon, including consultants from industry and academia. One group could not calculate the figures for carbon sequestration, while another could not align the carbon calculations with existing certifications or international standards.
The Unravel Carbon product and team could handle both of these needs, which is why it’s easy for companies like us to work together to put a plan into action.
Unlike consultants, Unravel Carbon has a product. This would make it easier to refer Unravel Carbon to other partners and customers in our supply chain, which is in keeping with our mission of influencing our ecosystem to engage in more sustainable business practices.
What were the top insights that emerged from Unravel Carbon’s analyses?
I think the most surprising result was that the biggest chunk of our emissions came from the end-of-life treatment of sold products. I assumed it wouldn’t be considered as it would be hard to determine whether products are recycled or end up in landfills. I was a little taken aback, but it inspired me even further: We can and should do more. We already source cardboard packaging that is composed of a certain percentage of recycled paper, but perhaps more could be improved to reduce our emissions.
Another insight related to solar energy. While we had considered installing solar panels prior to working with Unravel Carbon, your calculations were a confirmation that we should be moving forward. We could see exactly how much we would save by using more solar energy. This confirmed that solar panels were not just for sustainability but created major cost savings that could help the business.
There were similar insights relating to energy savings within our facility itself. Some recommendations were to switch to engines and machinery that had more efficient dynamos, while others focused on energy auditing. All of these are viable solutions that we will definitely explore further.
Overall, the report was very encouraging: It showed that our business was achieving our sustainability goals because we had little emissions and high sequestrations. Reducing our carbon footprint more, such as by following the insight to address our scope 3 emissions or other suggestions relating to possible energy savings within our facilities, would advance this mission even further.
What decarbonization solutions will you be implementing with the insights from Unravel Carbon?
As far as implementations, we’re still exploring our options. For example, one suggestion was to paint our roof white so that the building doesn’t retain as much heat, which would lower the need for air conditioning. We just need to explore whether this solution is allowed in our area. In some jurisdictions, it is forbidden if your building falls under a pathway for commercial flights.
Thankfully, the regular consultations with Unravel Carbon will help us decide what to do eventually as we research further. In the meantime, we are striving for two key goals with the aid of Unravel Carbon’s calculations: reducing costs and obtaining certifications, both of which are interrelated.
In the past, achieving certifications has been difficult. Given that pencils are a commodity, we must compete with others on price, which makes it challenging to invest in certifications because they drive up costs. This situation is unfortunate because we want to communicate to our partners and to the public that we are carbon negative. The “dream” would be to one day put this stamp on our product.
But now the tide has shifted. Since sustainability initiatives are no longer a cost center but a profit center - we can go after certifications while still maintaining the cost efficiency needed to compete in our market. Unravel Carbon’s analysis, in short, will help us achieve a two-pronged goal: one, we can reduce expenses through more sustainable practices; and two, we can affordably obtain the previously cost-prohibitive certifications.
In the larger picture, we want sustainability to become a business norm. There should be no other way if we are to survive the looming climate catastrophe. If an organization is not sustainable, it will not be able to operate in the long run. In the short term, certifications can help us move to that norm quicker. They can help show the importance of these practices to the rest of the business world so that others can follow suit.
Do you foresee other actors in your industry following suit?
We do want more organizations to embody this new way of operating, which I admit is both selfless and selfish on our part. It’s selfish because many competitors don’t practice ethical business. Some contribute to deforestation, or others don’t care whether their FSC certification is fake - some may not even have these as a company requirement.
As more organizations embrace this way of business, more people will understand and acknowledge that these practices are just as valuable as the bottom line, which ultimately will help our business performance.
On the other hand, promoting this way of business is also crucial for our collective survival. Looking beyond our space, we hope that sustainability can be the standard across all organizations and industries, the vast majority of whom we will never directly deal with. By serving as a model or case study for the business community, they can recognize the value in sustainable practices and also join the movement.
Take the case of carbon credits. While carbon credits are a means to generate revenue, they are also an opportunity to make our customers and downstream partners recognize the value of conservation. I therefore think that carbon credits are a good starting point in aligning the profit-centered thinking of current business into the mentality we must all adopt in order for us to not only survive, but thrive.