More than 90 institutional investors – representing assets worth over US$6.7 trillion – are urging the Roundtable on Sustainable Palm Oil (RSPO) to strengthen its sustainability certification criteria for palm oil production.
In a letter to the RSPO, the investors stated their concern over the “relevance and effectiveness” of the RSPO in the current palm oil marketplace, wrote Business Green on 13 August.
Roughly 19% of the world’s palm oil was currently certified by the RSPO, but there was a disconnect between leading palm oil sustainability commitments from corporations and the perceived weaker standards set out by the RSPO criteria, the letter read.
The investors outlined a series of recommendations to help make the RSPO’s standards more robust.
The RSPO was currently drafting new sustainability guidelines for November, but the investor group felt the current draft standards did not include sufficient protections for peatlands and high carbon stock forests and did not address labour concerns, such as children’s and workers’ rights.
“Our investment portfolios include companies that have significant exposure to deforestation risks and therefore have made robust no-deforestation policies and strong commitments to sourcing sustainably certified palm oil. As such, both investors and companies rely on the RSPO to ensure reliable supplies of verified sustainable palm oil,” the letter read.
Julie Nash, direct of food and capital markets at the US environmental group Ceres, which coordinated the letter, said companies needed assurance their palm oil supplies were deforestation free.
“Without that their businesses are vulnerable to reputation and market risks. This new guidance has the opportunity to help companies implement no deforestation pledges, but it must meet industry norms for zero deforestation,” said Nash.
In a response, the RSPO welcomed the feedback and said it had received more than 10,000 comments during the consultation period for its new sustainability requirements.
“We must collaborate with and gain consensus from our stakeholders, NGOs, growers, manufacturers and all others alike. In addition to reviewing the comments submitted related to our no deforestation standards, we are currently in active discussions with the High Carbon Stock Approach,” said RSPO.
The signatories of the investor group letter included, among others, Aegon Asset Management, Aviva Investors, EdenTree Investment Management, Environment Agency Pension Fund, Hermes EOS, the New Your State Common Retirement Fund and Robeco.