BOSTON, Massachusetts, June 23, 2015 (ENS) – Institutional investors representing over $5 trillion in assets have joined some of the world’s most recognizable consumer brands, such as PepsiCo and Procter & Gamble, to demand higher standards for certifying the sustainable production of palm oil. Forests and peatlands are being converted to palm plantations that yield the lucrative oil – a key ingredient in about half of all packaged goods, from cosmetics to candy.
In a letter earlier this month to the Roundtable on Sustainable Palm Oil, RSPO, investors and companies called on the London-based sustainability certification body for the palm oil industry to prohibit deforestation and peatland clearance for certified palm oil production and include additional environmental and human rights protections.
Signatories wrote, “[We] recognize deforestation as a significant risk to long-term business models and, consequently, investments…”
“Palm oil production offers both challenges and opportunities to promote thriving, sustainable economic development. As such, we urge the RSPO to set and enforce standards for truly responsible and sustainable palm oil production,” the letter states.
RSPO standards currently do not include protections for peatlands or high carbon stock forests, and have an inconsistent record of enforcement.
Company signatories to the letter include: Albertsons-Safeway, ConAgra, Coop Switzerland, Dunkin’ Brands, General Mills, Mars, Inc., Seventh Generation, Starbucks, The Kellogg Company, Walmart and five of the top 10 corporate purchasers of palm oil globally: Colgate-Palmolive, Kao Corporation (Japan), PepsiCo, The Procter & Gamble Company, and The Johnson & Johnson Family of Consumer Companies.
The letter was organized by the office of New York State Comptroller Thomas DiNapoli and Green Century Capital Management, both members of Ceres’ Investor Network on Climate Risk, a group of more than 110 investors focused on addressing the financial risks and seizing the economic opportunities associated with tackling sustainability challenges.
DiNapoli said, “Investors want their portfolio companies to have RSPO certification as part of a sustainable business strategy, but in order to enhance its credibility the certification program needs to improve.”
The $44 billion per year palm oil industry has become a leading driver of deforestation, which causes 15-20 percent of global greenhouse gas emissions, according to the U.S. Environmental Protection Agency.
Greenhouse gas emissions are a primary cause of climate change, which scientists agree must be limited to prevent irreversible and potentially catastrophic impacts on the planet and the global economy.
Deforestation contributes to species extinction, soil erosion, and conflicts with local communities over land rights.
DiNapoli said, “Stronger RSPO standards would allow the palm oil industry to grow, while minimizing risk to the environment and human rights.”
A new drive to address palm oil’s global sustainability challenges emerged at RSPO’s third European Roundtable held June 3 in Amsterdam, attended by 280 industries, NGOs and stakeholders from palm oil producing and importing countries. While all parties agreed that RSPO certified sustainable palm oil is part of the answer and acknowledged the work done by RSPO so far, they stressed the importance of change.
Mike Barry, director of sustainable business at Marks & Spencer, said, “I stand here as a businessman. Business can contribute to a sustainable future, but I think there is also a role for governments to play.”
In a statement June 18, the RSPO said, “RSPO recognizes that palm oil’s cultivation is one of the major causes of deforestation in South-East Asia. RSPO was created in 2004 to address this issue and currently 20 percent of the world’s palm oil production is RSPO certified.”
“RSPO also acknowledges that more needs to be done to improve the credibility of its certification,” the organization stated. “To this end, the RSPO Board of Governors has recently announced its intention to adopt a set of additional voluntary criteria, aimed at further enhancing the existing certification requirements on peat, deforestation and indigenous people’s rights.”