PT Astra Agro Lestari Tbk : Progress Report January – March 2022

PT Astra Agro Lestari Tbk

PROGRESS REPORT ON

SUSTAINABILITY

FIRST QUARTER

UPDATE 2022

INTRODUCTION

The first quarter of 2022 started with the launching of our 5-Year Action Plan which took almost six months for development following the evaluation of the implementation of 3-Year Action Plan in the same year. During this quarter, we moved forward to implement targets defined in the 5-Year Action Plan (all of which can be viewed

https://wwwthroughhttps://wwwthe.astrafollowing.astra-agro-agro.colink:.id/wp.cohttps://www.id/wp-content/uploads/2020/01/AAL-coent/uplo.astra-ds/agro2.co/01/.id/wpAL-Sustainability-Sustainab-cotent/uploads/2020/01lity-Action-Action--Planl -1.pdf

/AAL-Sustainability-Action-Plan-1.pdf). Detail of activities to achieve our targets are described in the following chapters.

HCV MANAGEMENT

HCV ASSESSMENT PROGRESS

As updated in the previous report, we are assisted by Daemeter Consulting and EcoNusantara in achieving our HCV assessment targets. In this reporting period, one subsidiary is in pre-assessment stage and eight subsidiaries have entered the scoping study stage, where the internal team together with related consultants are analysing biophysics and social-economic conditions in the comprehensive assessment area (see the scoping study stage on this page). HCV assessment planning for 2022 and achieved progress can be seen in the table below:

Table 1. HCV assessment planning for 2022 and its progress

Stage	Target Until	Realization	Realization	Realization	Realization
December 2022	Q1 2022	Q2 2022	Q3	Q4 2022
		Table 1.	HCV assessment planning for202220 2 and its progress
Pre-assessment	8 PTs	1 PT	-	-	-
Scoping Study	2 PTs	8 PTs	-	-	-
Full assessment	4 PTs	-	-	-	-
Public Consultation	2 PTs	-	-	-	-
Completion of	3 PTs	-	-	-	-
assessment
(Accumulated
number of subsidiaries)

REHABILITATION PROGRAM

Last year, we managed to plant more than 20,000 forest trees (±120 ha) spread across 20 subsidiaries, with the surviving trees reaching 95%. During this period, we have planted 4,007 trees (13% of the 2022 planting target of 30,000 trees) for riparian restoration. In addition to our in-house nursery for the seeds, we also procured some batches of seeds from seed suppliers in East Kalimantan and West Sulawesi. The seeds that we planted are a combination of fast-growing plants with local and endemic plants. In these planting activities, we were assisted by the local contractors (local people) to carry out the tree planting activities.

FIRE PREVENTION

During this semester, no fire incidents were identified in all our subsidiaries. We recorded the decline in rainfall occurring in late March in the Riau, Aceh, and Jambi regions, while in other areas (South Kalimantan, Central Kalimantan, East Kalimantan, and Central Sulawesi) rainfall continues to be high (please seewwwhttp://www.bmkg.bmkg.go.go..id/id).

FIRE MANAGEMENT SYSTEM

We engaged Manggala Agni to conduct a fire management system audit. In this quarter, we consulted on a plan, system, and agreement for commencing the verification activities. We estimate, in the next quarter, agreed timeline and steps will be completed.

FIRE MONITORING IN SUPPLIERS' OPERATION AREA

We regularly monitor hotspots/firespots across all of our suppliers. This activity is carried out through spatial monitoring, if a hotspot/fire spot is detected in the supplier's plantation concession, there will be a warning/notification so that we can identify information quickly and follow up with verification and confirmation with the concerned supplier. We are currently monitoring all suppliers (Including group level) with a coverage area of more than 250,000 Ha. During this period, we did not identify any warnings/notices regarding hotspots/fire spots in the concerned monitoring areas. The

hotspot/fire spot spatial monitoring system that we currently use has been able to provide nearly accurate and fast information on the hotspot/fire spot from the area of interest.

FIRE PREVENTION INITIATIVES WITH THE COMMUNITY AND RELATED PARTIES

We have formed 102 MPA groups as of Q1 2022 and we are in the preparation of forming additional MPA in subsidiaries in Sulawesi. At present, we have identified a village of fire-prone areas, community activities, potential causes of fires, and the potential economic development of the community. Key important steps have been made including intensive engagement with village officials, community, and district government concerning a plan to establish new MPAs. The action plan includes formation of MPA personnels and necessary trainings to enhance their knowledge and capacity.

Strengthening the Community Cares About Fires (MPA) group to become an independent MPA

As of Q1 2022, we have formed 20 independent MPA and this year we plan to develop two potential MPA to become independent MPA that focus on two villages in South Kalimantan. In this period, we have carried out several preparatory activities such as:

1. Mapping vulnerable areas in MPA activity areas
2. Reviewing MPA activities in fire prevention programs (patrol mechanism, communication, and MPA team skills in fire prevention).
3. Mapping Program to improve the economy of MPA group members by assessing the skills possessed by MPA. This process takes four to six months.

GHG EMISSIONS

Throughout the first quarter of 2022, AAL has been in consultation with Engie Impact and with the South Pole during 2021 to conduct an in-depth review of GHG calculation. The assessment includes re-identification of sources of emissions for all subsidiaries and to re-calculate GHG emissions annually covering scope 1 and scope 2. We have

also been working to set up emission reduction targets by using the emission value of 2019 as a reference for the reduction target.

For the Q1 2022 period, we are in progress verifying the calculation of GHG emission values by the BVI auditor and PWC auditor. This audit is very important to ensure that all data used for GHG calculation is credible and trusted.

CONSERVATION OF PEATLANDS

Sustainable Peatland Management

The Company routinely monitors its peat management in accordance with applicable regulations. These activities are carried out under the supervision of the Ministry of Environment and Forestry (KLHK). Monitoring is carried out mainly on water level and subsidence parameters which we then report periodically to KLHK. It is conducted according to the Company's commitment to implementing best management practices on peatlands to prevent damage and degradation of peatlands.

We also intensively engaged with KHLK to work together to evaluate areas that are included in the Peat Hydrological Unit (PHU). The ultimate goal of the project is to have a clear picture of the PHU including land use and peat dome. This project is very important to determine necessary actions to protect peat-dome area and ensure that cultivated peatland area are managed sustainably. This will take a long-term journey as it needs massive field work-survey. The first meeting was conducted in the end of last year and in this quarter, activity was mostly focused on data verification as a foundation to build up systematic fieldwork.

Priority Smallholder Partners on Peatlands

As explained in the previous report, as many as 8% (more than 4,700) of smallholders are located in indicative peatland after overlayed with the indicative peatland map from the KLHK. During this quarter, our team has been working on sharpening the target based on village risk status, farmer groups, volume and frequency of FFB supply. The result will be updated in the next report.