GoTo, Indonesia’s largest internet company, has set what is arguably Southeast Asia’s most ambitious sustainability target — to be a zero-emissions firm by 2030.
To achieve this target, the company, formed from a merger of ride-hailing firm Gojek and e-commerce company Tokopedia in 2021, plans to electrify its fleet of thousands of vehicles and switch to renewable energy to power its operations.
This will be no easy feat in a region in the very early stages of electrification that is primarly powered by fossil fuels.
As part of its ‘Three Zeros’ sustainability strategy outlined in its first sustainability report, published in May, GoTo is also aiming to eliminate waste from its operations and ensure that none of its drivers are affected by economic shocks like the Covid-19 pandemic, by 2030.
The task of meeting those targets will be driven by Tanah Sullivan, GoTo’s group sustainability head, who joined the company two years ago from the World Economic Forum, where she worked with the public and private sector on urban mobility solutions, based in Geneva.
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Yes, it [Goto’s zero emissions target] is extremely ambitious. Some days I feel like, ‘Oh gosh, how are we actually going to do this?’
Tanah Sullivan, group head of sustainability, GoTo
Setting sustainability targets with the twin distraction of a merger and a pandemic has not been easy, but Sullivan says that setting “big, hairy, ambitious goals” is in the spirit of the company credited with easing Indonesia’s notorious traffic congestion and providing people on the lowest rungs of society with a livelihood.
Critics point out that GoTo’s decarbonisation targets — like ride-hailing rival Grab’s — have not been approved by the Science Based Targets Initiative (SBTi), a standard that aligns carbon reduction goals with the Paris Agreement on climate change.
Tanah Sullivan, head of sustainability, GoTo. Image: LinkedIn
But Sullivan says that although the emissions target is not Paris-aligned, the company will decarbonise as far as is possible before purchasing carbon offsets.
Sullivan insists that company growth will not derail GoTo’s ambition to decarbonise. “We are not going to prioritise [business] growth targets that hinder our sustainability commitments,” she tells the Eco-Business Podcast.
Tune in as we talk about:
- Setting sustainability targets in a pandemic, during a merger
- Are GoTo’s targets ambitious — or unrealistic?
- Growth versus sustainability
- Regulating zero-emission targets
- Collaborating to decarbonise
Full transcript:
This is the Eco-Business Podcast. I’m Robin Hicks. Gojek is known as the app that helped ease Indonesia’s notorious traffic while giving jobs to people on the lowest rungs of society. Now the company is aiming even higher — to slash its carbon footprint to zero.
The ride-hailing app which recently merged with e-commerce firm Tokopedia to form GoTo is on a mission to decarbonise completely by 2030. How? By electrifying its fleet of thousands of vehicles and using renewable energy.
This will not be easy in a region in the very early stages of electrification, still powered mainly by fossil fuels, and where EVs are prohibitively expensive for the two million or so GoJek riders that use the app to earn a living.
Also, by 2030, the company is aiming to eliminate waste entirely from its delivery business, and ensure none of its riders are left behind by economic shocks such as the Covid-19 pandemic.
Are these sustainability targets just ambitious — or unrealistic?
Joining the Eco business podcast to talk about how go to can meet these targets is its head of sustainability, Tanah Sullivan, who moved to Jakarta from Geneva in 2020, where she worked for the World Economic Forum.
Welcome to the podcast, Tannah.
Tanah Sullivan [1.22]:
Thank you so much, Robin, it’s a pleasure to be here.
Robin Hicks [1.24]:
Well, it’s brilliant to have you on the show. The first question I want to ask you is a bit about you, Tanah. So you’re two years into the job at GoTo, and you’ve just brought out the company’s first sustainability report, and recently announced the ‘Three Zeros’ sustainability plan. The first question is, over the course of the first two years, what’s the most important thing you’ve learned?
Tanah Sullivan [1.22]:
I think the most important thing I’ve learned is about humility, and how we approach some of these really, really complicated challenges that we’ve been addressing as a company. The humility part for me is … it’s very easy to come in and say: ‘well, I’ve seen and heard and experienced what some of these best practices from a global perspective, from an industry perspective. And here’s what you should do, guys.’
But you don’t really understand when you first come in the operational realities of what these teams face on a daily basis. And so for me, I think it was having that sense of humility and being able to spend the time with these teams at all levels, across all the different functions to truly understand exactly what it is that they face, and from there work with them to find the right kinds of solutions that will integrate both the best practice component of it, and the practical application of these best practices.
Because it’s going to look very different depending on the business line or the market they’re in. And so taking the time to really do that, rather than coming in and saying, ‘I’m the subject matter expert, here’s a very fancy deck, and here’s a very complicated set of explanations, guidelines and frameworks…’ A lot of the teams we work with, it’s just not a case of being able to copy and paste best practices as it relates to what they face and what they are trying to resolve on a daily basis.
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We really needed to set big, hairy, audacious goals, because that’s always been in the spirit of our company.
So humility is one thing. Another very, very important thing for me was — at least in terms of being effective within the company — was the relationship-building component. In every job or organisation you can that’s important. But in these sustainability functions, we are beholden to relationships with the respective leaders and the teams that we work with. If I didn’t have a good relationship, a trusted relationship with my colleagues, it would make it incredibly difficult for us as a team to be able to kind of navigate and operate the way that we do across so many different business lines. But we don’t necessarily have the same kind of in-depth understanding as some of these other teams, because they’re living, breathing and eating [these disciplines] every single day.
Robin Hicks [4.21]:
That’s really interesting. You mentioned the word humility, which I think it’s a really interesting word to use for the head of sustainability in a big company like GoTo. You mentioned that you didn’t have subject matter expertise, but you were at the World Economic Forum for a long time, and your subject matter expertise was mobility…
So tell us about when you first joined GoTo, and the process that led to setting up the ‘Three Zeros’ targets. It could not have been easy in the middle of a merger, but also in the middle of a pandemic…
Tanah Sullivan [5.01]:
I’ll give the headline version. Hopefully it’s interesting for everybody. Look, it was incredibly complex. And it was not just about having to navigate and learn about a brand new organisation coming into this role. We were also going through this massive organisational transformation and change in the union with Tokopedia. Because I started off at Gojek. I think the step-by-step process that I took — and again, I had to come with humility, because we had a little bit of a head start at Gojek. It wasn’t like I was going to apply all of the same recommendations, learnings, frameworks, practices and policies to the Tokopedia side of things. Tokopedia had very different business lines, and also a very different culture, and very different people leading those those teams and functions.
So I had to invest additional time to learn and build relationships and do all those things that I mentioned before but with a brand new organisation, which in its own right is complex and huge as well in terms of reach. So the step-by-step process I took in parallel of doing these things was, we had to still continue making progress on the ‘Three Zeros’ commitments and make sure that what we were doing on the GoJek side was consistent and standardised across all the different companies within the newly formed GoTo group, while we were still defining what being GoTo group was.
So there were a lot of conversations and a lot of consultation across many internal stakeholders, first and foremost. So that includes not just the leadership team, but people at different levels from all the different functions, and then some of the external stakeholders as well. You’re not going to have the same set of investors for Gojek as you would for Tokopedia.
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Because of where Indonesia is at this point in time, it does make it very difficult to see how we’re going to get there. But we have to try.
It took many, many conversations to be able to really get down to say: ‘okay, here’s the environmental and social issues that a lot of these priority stakeholders have identified as important to them, and where they believe and we understand that we can actually do something about; and do they still fit into the ‘Three Zeros’ commitments that we had at Gojek? And if they do, how do they actually look? Or how are they defined? Or how are they able to be applicable within an e-commerce or logistics business line versus a ride-hailing slash mobility business line.
And so those are the types of things we spent the better part of six to nine months figuring out across all the different companies. And that’s how we’ve come up with the three zero commitments, and that’s why we’re quite confident about it, because we did so much consultation and assessing what kind of GRI and SASB reporting standards to ensure that, for example, when we were ready to do a GoTo-level report, we would have all the data, all the right initiatives that we could include that would ensure that we would meet the reporting requirements for each of those standards as they related to our material ESG issues.
Robin Hicks [8.40]:
It does sound like a very complicated complex exercise. Now just look at the ‘Three Zeros’ targets, which refers to goals reduce emissions to zero emissions, eliminate waste, and also the social inclusion component of leaving no one behind. So how does that apply to Tokopedia as it does to Gojek?
Tanah Sullivan [9.03]:
Let’s start with the zero-emissions target. We’d already done the exercise for GoJek one year prior — the data collection process was already established. Then we had to do set it up on the Tokopedia side. On top of that, Tokopedia is an incredibly decentralised model. There are millions of merchants across Indonesia operating as micro entrepreneurs. Their operating practices are up to them. We don’t know nor can we monitor exactly what they’re doing in order to calculate an accurate emissions inventory. We have to ensure that, as much as possible, we work with credible partners and make sure that we calculate an inventory that is as accurate as possible.
It’s the first sustainability report that we’ve done, and we’re really excited that we now have a baseline to compare our performance against in insubsequent years. That said, decarbonisation takes on a very different take in Tokopedia. With Gojek, it’s really about how we get closer and closer to zero emissions before 2030. We know that for Gojek 88 per cent of the inventory was from the mobility services used across the platform - GoSend, GoRide, GoCar, GoFood deliveries, and so on.
But Tokopedia doesn’t have its own logistics arm. They work with third-party logistics partners to be able to distribute 1 million packages every day across the country. So decarbonisation takes on a very different definition for Tokopedia. It’s the direct emissions from Tokopedia’s offices, warehouses, and fulfilment centres across the country, But now it takes on an additional layer, where we have to bring on some of these third-party logistics partners, to be able to also shift to cleaner mobility — we need to start working with them on sourcing renewable energy. That said, we can’t necessarily ensure that they are going to do that. But we can certainly raise awareness about this journey could look like for them and handhold them through the process.
Eventually, we want to make it a baseline criteria for working with us as a partner, vendor or supplier. We will build these conditions into our policies and screening process moving forward.
Robin Hicks [12.06]:
One of the ‘three zeros’ that stands out to me that is particularly ambitious is zero emissions. It is a very, very ambitious target – some cynics, like myself, would say it’s realistic. Indonesia is in the very early stages of electrification, very stage of electric vehicle growth, and the economy is fossil fuels-based. But GoTo wants to hit zero emissions by 2030. That’s eight years’ time. What do you say to people who say the target is not just ambitious, it’s unrealistic?
Tanah Sullivan [12.59]:
Naysayers, Robin! Look, if we didn’t set ambitious targets … it’s not that we’re planning to not achieve them. I think we really needed to set big, hairy, audacious goals for ourselves. Because that’s always been in the spirit of our company. If we look at the history and evolution of Gojek or Tokopedia… there were naysayers of those companies too in the beginning. The business models were seen as unrealistic or too ambitious. But yet, somehow, we managed to make it work.
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I want these types of strict regulations and requirements to come! I really do. It will force the hand of everybody in the industry to comply.
That said, the vision, the product, or the solutions that Gojek or Tokopedia came out with in the end might look very different from what it was from inception. But the goal and premise has always been the same — to provide equal opportunities to economic growth, and include those who didn’t have necessarily the economic agency or voice before; to allow everybody here in Indonesia and across the region to be able to be part of the digital economy.
Now on the zero emissions part. Yes, it is extremely ambitious. Yes, some days I feel like, ‘oh gosh, how are we going to do this when we start getting into the nuts and bolts of things. But that said, it’s something we had to set for ourselves and do everything in our power to be able to achieve those goals.
For me, it’s a net positive for everybody. If we can convince and continue working with, for example, the state grid operator in Indonesia (PLN) to be able to be pumping more renewable energy into the grid… We’re already purchasing it for ourselves for our direct operations. We will build it into the battery swapping infrastructure that we’re developing with Electrum, through our joint venture with TBS Energy…
We will continue doing these kinds of things so that overall the ecosystem is moving with us. Because if you look at the actual breakdown of zero emissions, there are a lot of dependencies there. There are variables that can go in our favour or against. But for us, I think it’s really important to have these kinds of ambitious goals. It really rallies the company. Everybody’s working towards them in different ways depending on the function they’re sitting in.
Everybody’s motivated, mobilised and excited about working on it — despite the challenges and the complexities, and despite the complicated navigating we have to do of this ecosystem, and because of where Indonesia is at this point in time. It does make it very difficult sometimes to see how we’re going to get there.
But we have to try. And that’s the key message. We’re investing a lot into this. And we will continue to not just invest ourselves, but also make sure that we’re bringing the right partners along with us who will be equally committed to achieving these goals.
Robin Hicks [16.57]:
One thing that strikes me about GoTo’s zero emissions target is that it’s not science-based — so it’s not aligned with the Paris agreement on climate change and is not approved by the Science Based Targets Initiative. So that means that you can hit carbon neutrality, but you’d have to invest a lot in, for example, carbon offsets to get there. Can you tell us a bit about how you estimate GoTo will have to invest in carbon offsets to meet that zero emissions target by 2030?
Tanah Sullivan [18.10]:
The general approach for us is, as we get better at decarbonising our own operations and those in our ecosystem, we will offset any residual missions that we can’t shift either ourselves, or we can’t get our partners to shift.
As you rightly point out, SBTi has incredibly high standards, requirements, and criteria. We do still have the ambition to submit some of our 2030 targets to SBTi to be considered. I think it’s very, very important to consider our unique operating context — we’re not like traditional companies that have submitted and have verified SBTi targets.
But for me, that’s (SBTi) the gold standard. If we’re not striving for the gold standard, we don’t want to fall short on this. We want to make sure that everything that we’re doing is as credible and verified by an independent body as best as possible.
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As long as we are still a company, we are going to do what we were designed to do — which is maximise shareholder return. The difference with us is that we recognise that this [sustainability] is incredibly important.
The doesn’t mean that just because we don’t meet those (SBTi’s) criteria, we’re not going to do anything, that we’re going to sit on our laurels and wait for others to take over. We are really trying our best to figure out exactly how the SBTi criteria fits into our operating context, and engaging them on that and having that discussion — not just with SBTi, but across the industry as well across the region.
Those unique market conditions can dictate how are our targets or our operations will look like in the coming years. And we need to make sure that we develop long-term solutions with SBTi targets in mind. I’m still very much of the belief that we can, and we will achieve them one day — maybe. This is a long term play for us.
Robin Hicks [20.37]:
That’s good to hear. Are these targets flexible? Could they change over time. The reason I ask is because in the US, the Securities and Exchange Commission recently proposed tighter rules for ESG disclosures, including net-zero targets. Do you worry that similar regulations will eventually come to Indonesia, which will mean that you have to stick to these targets — they can’t just be something you put in a sustainability report…
Tanah Sullivan [21.21]:
I want these types of strict regulations and requirements to come in! I really do. It will force the hand of everybody in the industry to comply. That’s it — you comply, or you don’t. It levels the playing field for everybody. It means that it’s not just us investing heavily in this. And no longer would we have to continuously make a business case for it.
We are a relatively young company. We have relatively young leadership. That has been a huge advantage for me, because it has meant that our team does not have to necessarily convince everybody that sustainability is important. Or that climate action is just as pressing as meeting our business objectives or growth targets. The right mindset is already there.
But we’re all products of the system. And it hasn’t properly prioritised things like climate action. It hasn’t properly valued things like used materials. So as a result it’s cheaper to create a brand new plastic bottle than it is to repurpose the old one. The same goes for cardboard packaging. There’s no value to it, which is why it becomes waste.
And so we don’t know the true cost of things like fast fashion. We’re not paying for things with the actual environmental impact factored into the price. And so as long as we are still a company, which we are, we are going to do what we were designed to do — which is maximise shareholder return. Every company will do that. The difference with us is that we recognise this as incredibly important. And as best as possible, we’re trying to pivot so that our operations are sustainable. And we’re also still creating value for our shareholders.
If you put in a regulation, like what the SEC has done in the US, all of a sudden you can bet the best minds in the business will be trying to problem-solve the most cost-effective way of meeting those requirements of complying. Right now, that kind of push is not there, right? Because the regulations don’t exist here [in Indonesia]. So I would very much welcome those kinds of your more strict requirements, for sure.
Robin Hicks [23.58]:
That’s an interesting perspective. I was looking through the sustainability report that you guys recently put out. One of the things that jumped out at me was a page on core values. One of Tokopedia’s core values is “growth mindset”. The reason those two words jumped out at me because sometimes growth jars with sustainability. I’ve heard heads of sustainability from Google talk about the problem of being a high-growth company with trying to meet sustainability targets. Also your rival grab, [sustainability head] Iris Chang, recently spoke about that as well. How do you strike a balance between growth, emissions reduction and ensuring low-income riders are not excluded?
Tanah Sullivan [24.45]:
The short answer is we are not going to prioritise growth targets that impact or hinder our sustainability commitments. We will not do that. When we say sustainability is integrated into the core of our business, it’s not just that our function reports to the CEO or that we have really robust governance structures around monitoring and aligning the entire company towards the sustainability commitments. Those are true things as well.
But that’s not the only reason why we’ve integrated sustainability into our core business model. The examples I can give you is with our Cloud Kitchens. We are planning for exponential growth on that side of the business across Indonesia. Because we have been able to effectively transition three Cloud Kitchens in pilot phase to zero waste completely, meaning there was no waste at all going to landfill. Now, it’s built into the expansion plans for every single cloud kitchen moving forward.
It’s the same thing with our fulfillment centres — we’re planning to scale those fulfillment centres to meet the growing demand for our e-commerce business. At this point in time, 80 per cent of the packaging from Tokopedia fulfillment centres is 100 per cent recycled. And we are establishing, as we speak, an end market to purchase the waste from our warehouses to be able to then repurpose it into recycled packaging, which we will purchase back.
So it’s a closed loop and it’s a cost effective model, meaning we’re not paying the sustainability premium that so many have talked about — we can actually do this. These are the types of things where we’ve been able to harmonise or find balance between our sustainability commitments and the hard growth that we’re looking for as a company and as an ecosystem.
Robin Hicks [27.20]:
Are there any companies you look to for inspiration?
Tanah Sullivan [27.25]:
This is where the humility comes in, right? We are learning so much as we go along. We look at almost every industry peer, every regional peer, every global peer, and also outside of sector.
For me, it’s about getting an amalgamation of all the best practices and seeing which ones are the most relevant, reaching out to sustainability practitioners in other companies across our industry and our region.
Because we don’t know everything, and we know that we’re going to make mistakes along the way. And if we can share or provide some kind of learning or insight that others might find useful, great.
I wouldn’t say that I’ve seen a company be a trailblazer per se, at least not operating in a similar kind of unique context as we are, or market that we are in.
But I do know that the consistent theme or message I’ve gotten is that we’re all trying to problem solve this — not necessarily in silos — but we are trying to problem-solve this separately.
In the end, we really have an interest in banding together and ensuring that there a net positive for the broader society in the markets we operate in.
Robin Hicks [28.52]:
Indeed, it would be really good to see more of the industry getting together to solve a problem that certainly no company can solve on its own. That’s a really good place to leave it. Tanner Sullivan from GoTo, thank you so much for joining the Eco-Business podcast.
