Green Industry Strategy in Palm Oil Agribusiness: Integration of the Involution Index and Life Cycle Assessment

Abstract

Indonesia’s palm oil industry contributes substantially to employment generation, export earnings, and the national economy; however, its operations remain associated with greenhouse gas emissions, resource inefficiency, biodiversity loss, and increasing sustainability challenges. This study aims to identify internal and external factors influencing green industry practices at PT Teladan Prima Agro and formulate strategies to enhance environmental performance, operational efficiency, and cost efficiency. A case study approach was employed using primary data collected through questionnaires, in-depth interviews with purposively selected internal and external experts, and field observations, complemented by secondary data. The data were analyzed using the Internal Factor Evaluation (IFE) matrix, External Factor Evaluation (EFE) matrix, Internal–External (IE) matrix, TOWS analysis, and the four-action framework of the Blue Ocean Strategy. The company achieved an IFE score of 2.36 and an EFE score of 2.67, positioning it in quadrant V, which represents a hold-and-maintain strategic position. Six strategic alternatives were developed, consisting of two market penetration strategies and four product development strategies. The key strategic priorities include expanding circular economy practices and renewable energy initiatives, strengthening digital traceability and carbon Measurement, Reporting, and Verification (MRV) systems, enhancing climate risk identification and monitoring, adopting human rights-based labor standards, and implementing precision agriculture technologies. The study concludes that green industry initiatives require deeper integration into the business model to transform environmental improvements into tangible, measurable, sustainable, long-term operational and financial value.