Wildfires and Earthquake Negative Impact on Businesses
Indonesia faced two major environmental crises in August 2026 as fast spreading wildfires across Sumatra and Kalimantan resulted in a severe crisis. Experts identified that some of the causes of fires re correlated to land clearing and coal industry. A public health emergency and a magnitude 7.7 earthquake occurred in NTT province on August 15 resulted in more than 100 deaths and nearly 180,000 displaced. At the same time, South Sumatra is facing 1,429 fire posts, following West Kalimantan at 1,226.
Forest and land fires contribute to various operational and climate risks. For example, the smoke exposure and recurring fires have impacted agricultural businesses and supply chains in the region. Additionally, tourism and land-based operations are affected as authorities are waiting to open Bromo National Park once the wildfires are contained, as more than 1,100 hectares of land have affected the tourist destination. Moreover, El Niño is entering its peak stage with the winds inevitably fanning flames of the wildfires due to the dry season as well.
