Calls for RSPO to act to strengthen standards for palm oil certification

5 June 2015

Global investors and household name brands have united to call for standards for sustainable use of palm oil to be strengthened to protect forests.

Institutional investors in the US have joined with some consumer brands to call on the Roundtable on Sustainable Palm Oil (RSPO) to strengthen its standards for certifying the sustainable production of palm oil, a key ingredient found in an estimated 50 per cent of all packaged goods.

In a letter organised by investment advisory firm Green Century Capital Management, together with the New York State Common Retirement Fund, investors and companies are calling on the RSPO to prohibit controversial and unsustainable practices including deforestation and peatland clearance for certified palm oil production.

“Companies and investors increasingly recognise that widespread forest clearance degrades the environment and drives conflicts with local communities in ways that pose real risks to shareholder value,” said Lucia von Reusner of Green Century Capital Management.

"We are calling on RSPO to provide the assurance that strong protections are being upheld throughout palm oil supply chains, and to maintain its credibility in the marketplace by strengthening its standards to align with best practices that many of its member companies have already adopted.”

The RSPO, the multi-stakeholder sustainability certification body for the palm oil industry, is tasked with providing assurance that palm oil has been produced sustainably. The standards currently do not include protections for peatlands or High Carbon Stock forests, and have an inconsistent record of enforcement, according to Green Century Capital Management.

The letter said: “As an international certification scheme, the RSPO is uniquely positioned to support, promote, and enforce the widespread uptake of responsible and sustainable production practices across the palm oil industry. Given current gaps in RSPO certification, however, purchasing RSPO Certified Sustainable Palm Oil (CSPO) does not sufficiently address critical sustainability concerns in the palm oil supply chain.”

Green Century Capital Management said that the $44 billion per year palm oil industry has become a leading driver of deforestation, which causes 15-20 per cent of global greenhouse gas (GHG) emissions, according to the US Environmental Protection Agency.

Deforestation also contributes significantly to species extinction, soil erosion, and conflicts with local communities over land rights.

Company signatories to the letter include Mars, Carrefour, Dunkin Brands, Albertsons-Safeway, Coop Switzerland, Seventh Generation, The Kellogg Company, General Mills, ConAgra Foods, Starbucks, Walmart Stores, and five of the top 10 corporate purchasers of palm oil including The Procter & Gamble Company, PepsiCo, Colgate-Palmolive, Kao Corporation (Japan), and The Johnson & Johnson Family of Consumer Companies.

The RSPO acknowledged the importance of the issues raised, and said it was working on an additional voluntary addendum on issues such as deforestation, peatland development and indigenous peoples’ rights.

It said: “The RSPO, in its multi-stakeholder nature, has a commitment for inclusivity and the RSPO standard is agreed upon through a consensus process. While the nature of this system means that at times compromises are necessary to move forward and ensure buy-in of all stakeholder groups represented within the RSPO, this system is also essential to ensure that RSPO not only supports existing exemplary organisations, but also assists those who are still trying to improve their sustainability standards.”

The RSPO added that in the last years, it had improved its systems to ensure a correct implementation of the standard.

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