Sukanto Tanoto – Sustainable Entrepreneurship for the 21st Century

Sustainable Palm Oil

Sukanto Tanoto, who directs the work of multiple companies under the $15 billion corporate umbrella of the RGE Group, is an Indonesian-born entrepreneur who worked his way to success through his determined efforts and dedication to constant education and self-improvement. Mr. Tanoto continues to emphasize these values throughout his businesses and the philanthropic work of the Tanoto Foundation, which aims to provide educational assistance and to empower workers, students, and others in Indonesia, Singapore, China, and beyond Southeast Asia. In addition, he maintains a strong focus on the long-term sustainability of his companies and the communities in which they do business.

 

Sustainable Palm Oil

Sukanto Tanoto believes that environmental sustainability and a focus on the needs of all stakeholders are essential to long-term profitability and good corporate citizenship. His company Asian Agri, which is based in Indonesia, maintains facilities in three locations on Sumatra, partnering with local smallholder farmers to manage some 60,000 hectares of palm oil plantation land. One of the country’s largest such operations, Asian Agri, works to harvest its palm oil product in a manner that supports the conservation of the environment and empowers local farmers, as well as other considerations of the greater social welfare.

Under Sukanto Tanoto’s leadership, Asian Agri has delivered numerous economic, social, and educational benefits to its nearly 30,000 partner smallholder families. In addition, Mr. Tanoto has worked directly with Amanah, a smallholder palm farmer group, assisting members in earning certification in sustainability practices. In 2013, due to his support, Amanah became the first organization of Indonesian smallholders to receive such certification.

Recently, in an effort to encourage sustainable palm production among farmers, Asian Agri shared premiums or extra proceeds from exports totaling $220,000 with the representatives of Village Unit Cooperatives (KUD) in the Jambi and Riau provinces. The products produced through these farming methods have been well-received in the international markets.

Freddy Wijaya, general manager of Asian Agri, said that farmers have been encouraged to plant sustainable palm not only for the opportunity to obtain premiums, but also to achieve long-term sustainability.

European countries tend to favor sustainable palm oil because the production process does not cause environmental damage. Farmers have found more market certainty in Europe, where they have a wider margin and can cover greater production costs.

International authorities, writing in peer-reviewed journals, have described this type of sustainability entrepreneurship as providing responsible stewardship of resources, as well as long-term opportunities for worker advancement, in addition to the traditional entrepreneurial emphasis on profits. A concentration on sustainability also tends to drive companies in the positive direction of increased innovation in products, processes, and services.

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