ZSL report finds many palm-oil producers failing to meet 2020 zero-deforestation targets
International conservation charity’s analysis finds that despite making commitments to zero deforestation, many palm oil producers do not provide evidence of implementation
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ZSL Urges Palm Oil Producers To Ramp Up Their Reporting
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 (Tuesday 10 November 2020) release their annual assessment of 100 of the world’s most significant palm oil producers, processors and traders.
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 aimed to halve deforestation globally by the same date. The deadline is now upon us, but most companies still do not report basic information on how they are monitoring deforestation in either their own or their suppliers’ operations.
The analysis of 100 producers, processors and traders of palm oil published by ZSL’s SPOTT team – an initiative developed by ZSL to incentivise transparency of reporting and the implementation of best practice – has found that while 71 percent (56 out of 79) of the companies assessed have made a clear and robust commitment to zero deforestation, just 42 percent (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 percent (54 out of 98) apply clear zero-deforestation commitments to their suppliers, only 10 percent (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 percent (57 out of 79) of companies providing comprehensive commitments to no planting on peat, but only 20 percent (14 out of 70) reporting on the implementation of the commitment, and 75 percent (59 out of 79) committing to zero burning yet only 54 percent (43 out of 79) disclosing details of fire management and monitoring practices.
Spencer added: “The responsibility to tackle deforestation and improve the sustainability of palm oil production is shared by all actors in the supply chain and key stakeholders outside of it, and it is vital that these different groups work together to push for change.”
Focus On Lending And Underwriting Efforts
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. To view the latest assessments and find out more please visit www.spott.org/palm-oil/
Developed by the Zoological Society of London (ZSL), SPOTT is an online platform supporting sustainable commodity production and trade. By tracking transparency, SPOTT incentivises the implementation of corporate best practice. SPOTT assesses commodity producers, processors and traders on their public disclosure regarding their organisation, policies and practices related to environmental, social and governance (ESG) issues. SPOTT scores companies annually against sector-specific indicators to benchmark their progress over time. Investors, buyers and other key influencers can use SPOTT assessments to inform stakeholder engagement, manage risk, and increase industry transparency.
For more information, visit www.SPOTT.org
ZSL’s palm oil statement
Unsustainable palm oil production has serious negative environmental and social impacts. However, the palm oil industry plays an important role in employment and economic development for many countries, and palm oil is currently the most efficient vegetable oil crop in terms of yield per hectare. Replacing palm oil with other crops is not an effective solution as it may lead to further deforestation and biodiversity loss through increased land conversion. Boycotting palm oil could also result in diminished efforts to produce palm oil sustainably.
ZSL (Zoological Society of London)
Founded in 1826, ZSL (Zoological Society of London) is an international scientific, conservation and educational charity whose mission is to promote and achieve the worldwide conservation of animals and their habitats. Our mission is realised through our ground-breaking science, our active conservation projects in more than 50 countries and our two Zoos, ZSL London Zoo and ZSL Whipsnade Zoo. For more information visit www.zsl.org
New York Declaration on Forests
The New York Declaration on Forests (NYDF) is a voluntary and non-binding international declaration to take action to halt global deforestation. It was first endorsed at the United Nations Climate Summit in September 2014. In September 2019 the list of NYDF supporters had grown to include over 200 endorsers: national governments, sub-national governments, multi-national companies, groups representing indigenous communities, and non-government organizations. These endorsers have committed to doing their part to achieve the NYDF’s ten goals and follow its accompanying action agenda.
About BMO Global Asset Management
BMO Global Asset Management is a global investment manager with offices in more than 25 cities in 14 countries, delivering service excellence to clients across five continents.
Our four major investment centres in Toronto, Chicago, London and Hong Kong are complemented by a network of world-class specialist managers strategically located across the globe: BMO Real Estate Partners, LGM Investments and Pyrford International Ltd.
BMO Global Asset Management is a signatory of the United Nations-supported Principles for Responsible Investment initiative (UNPRI).
BMO Global Asset Management is a part of BMO Financial Group, a highly diversified financial services provider based in North America with total assets of CDN $987 billion as of 30 April 2020.
The RSPO (Roundtable on Sustainable Palm Oil)
The RSPO is a not-for-profit that unites stakeholders from the seven sectors of the palm oil industry: oil palm producers, processors or traders, consumer goods manufacturers, retailers, banks/investors, and environmental and social non-governmental organisations (NGOs), to develop and implement global standards for sustainable palm oil. The RSPO has developed a set of environmental and social criteria which companies must comply with in order to produce Certified Sustainable Palm Oil (CSPO). When they are properly applied, these criteria can help to minimize the negative impact of palm oil cultivation on the environment and communities in palm oil-producing regions. The RSPO has more than 4,000 members worldwide who represent all links along the palm oil supply chain. They have committed to produce, source and/or use sustainable palm oil certified by the RSPO.
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