Palm Oil Industry Urged to Ramp Up Reporting

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by | Nov 10, 2020

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International conservation charity ZSL (Zoological Society of London) is urging the palm oil industry to ramp up its reporting and take greater responsibility for its part in tackling the world’s climate and biodiversity crises, as they today release their annual assessment of 100 of the world’s most significant palm oil producers, processors, and traders.

According to ZSL, the clearance and burning of forests and carbon-rich peat soils to create land for palm oil production is among the biggest drivers of deforestation in the tropics – destroying precious wildlife habitats, removing natural carbon storage and so accelerating biodiversity loss and climate change.

Companies across the palm oil supply chain have committed to zero deforestation by 2020, through the Consumer Goods Forum pledge or through their own targets. Additionally, many have signed up to the New York Declaration on Forests, which aims to halve deforestation globally by the same date.

The analysis of 100 producers, processors and traders of palm oil published by ZSL’s SPOTT team has found that while 71% (56 out of 79) of the companies assessed have made a clear and robust commitment to zero deforestation, just 42% (33 out of 79) provide detailed information on how they are actually monitoring deforestation in their own operations.

Palm oil producers are also encouraged to enforce these pledges throughout their supply chains, and while 55% (54 out of 98) apply clear zero-deforestation commitments to their suppliers, only 10% (10 out of 98) are able to comprehensively report on how they are monitoring this.

Eleanor Spencer, ZSL’s Palm Oil Technical Advisor said: “2020 has been a wake-up call, with many realising the impact of human consumption and behaviour on the planet. While progress has been made by palm oil companies in setting clear commitments to tackle deforestation, it is now certain that many 2020 zero-deforestation targets will not be met. These deadlines cannot be extended any further if we are to meaningfully tackle the climate and biodiversity crises.”

SPOTT’s analysis found similar statistics on reporting against other elements of companies’ NDPE (No Deforestation, No Peat, No Exploitation) commitments, with 72% (57 out of 79) of companies providing comprehensive commitments to no planting on peat, but only 20% (14 out of 70) reporting on the implementation of the commitment, and 75% (59 out of 79) committing to zero burning yet only 54% (43 out of 79) disclosing details of fire management and monitoring practices.

Nina Roth, Director in the Responsible Investment team of BMO Global Asset Management, said “In our engagement with financial institutions we are focusing on lending and underwriting efforts, and how zero-deforestation commitments have to be reflected in due diligence standards. There are still big gaps, and even large international banks lack environmental and social standards on palm oil or other soft commodities. SPOTT helps us directly in assessing sustainability performance across soft commodities, and particularly in palm oil. It is also a tool that we reference in our engagements, for banks and corporates alike to consult.”

Found in many household products, palm oil use has become a somewhat polarising topic, with campaigns to boycott it often achieving huge consumer awareness. However, it is still regarded as one of the most efficient vegetable oil crops in terms of yield per hectare, meaning that a complete rejection of the product would only likely shift demand to less-efficient alternatives and lead to greater habitat destruction. Companies can purchase palm oil certified by the RSPO (Roundtable on Sustainable Palm Oil), the world’s largest palm oil certification scheme, to help ensure that their products adhere to stringent sustainability requirements.

Spencer concluded: “These results should be a red alert for the palm oil producers, their investors, banks and buyers downstream – all of whom have made the same commitments to stopping forest loss. It is crucial now that the industry and its stakeholders come together to ensure sufficient action is being taken on the ground, and that these zero-deforestation targets are not empty promises.”

ZSL is calling on palm oil companies and their stakeholders to live up to their commitments and ensure that zero-deforestation targets are being met, enforced, and reported on – in order that we truly address the crisis facing tropical forests.

In August, Unilever launched a pilot with the Palo Alto-based tech company Orbital Insight at Unilever’s oleochemical facility in Indonesia. The pilot uses geolocation monitoring through mobile phone network data to help identify which farms and plantations most likely supply palm oil mills within the company’s extended supply chain. Once the data-driven link to palm plantations has been established, the company uses technology and satellite data to monitor these plantations across the entire supply chain. Unilever also has satellite data showing recent fires, deforestation, and conversion on peat soils, as well as forest near protected areas and national parks.

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