Cutting ties between business and deforestation

Nathalie Rasmussen By Nathalie Rasmussen, Head of Business Conduct Engagement at GES

With climate change becoming more and more of a hot topic as the COP 21 in Paris is approaching, I find myself at a deforestation conference in Oslo in mid-October listening to the Norwegian Minister of Climate and Environment, the executive secretary from the UNFCCC (UN Framework Convention on Climate Change) and representatives from companies such as IKEA, REMA 1000 and NorgesGruppen. Besides the companies, several experts on deforestation were present, such as Scott Poynton from The Forest Trust and Glenn Hurowitz from the Center for International Policy.

I was interested to see how Norway views the palm oil sector today, after the country’s use of the ingredient in consumer products dropped with 66% in 2012 following a campaign from the Rainforest Foundation Norway pointing out palm oil’s negative impacts on deforestation. Several investors also divested from palm oil producing companies in South East Asia. Even though Norway only has about 4 million citizens, the boycotting of palm oil by consumers and some supermarkets had nonetheless been noticed by related companies, perhaps fearing that other, larger markets would follow suit. Likewise, the divestment by some Norwegian institutional investors has perhaps not created a ripple-effect, but has definitely raised questions around the sustainability of these companies. It seems that while some companies have completely phased out the use of palm oil in their own products (such as the supermarket chain REMA 1000), others are trying to work with the sector to try and prevent deforestation in the supply chain.

What struck me the most was that even though all the big players in palm oil and logging have signed ‘no deforestation’ and sustainability pledges in recent years – Nestle (2010), Golden-Agri Resources (2011), Asia Pulp & Paper (2013) and finally Wilmar (2013) – the implementation at suppliers seems problematic. Palm oil companies need to work more closely with their suppliers to ensure no deforestation takes place, and traceability plays a big part in holding companies and suppliers accountable. With Wilmar now taking the lead on transparency and listing its suppliers on its sustainability dashboard, a step in the right direction towards preventing deforestation has been taken, but a lot remains to be done. The urgency is clear and was put simply by the UNFCCC secretary: “If not now, then when?”. GES is looking forward to the Palm Oil Engagement trip to Malaysia and Singapore at end of November 2015, where we will talk to palm oil producers about what seems to be holding back implementation of the no-deforestation policies and how the commitments and efforts are playing out in reality.

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