The UK's Department for the Environment, Forestry and Rural Affairs (Defra) has opened a consultation seeking to introduce a due diligence requirement for companies whose supply chains may be contributing to deforestation.
A group of 50 PRI signatories coordinated by the PRI, formed an Investor Working Group (IWG) on sustainable palm oil.
The group aims to raise awareness of these issues among investors, provide a unified investor voice in support of sustainable palm oil and the Roundtable on Sustainable Palm Oil (RSPO), and engage with companies in support of more sustainable practices.
Whats the issue?
Palm oil is the most widely used vegetable oil and boasts a number of advantages compared to its substitutes, including versatility, low cost and high yield. It has contributed significantly to economic development in a number of countries, in particular Indonesia and Malaysia, which together produce over 85% of the world’s crude palm oil.
However, the development of palm oil plantations has been linked to significant negative social and environmental impacts that pose risks to investors, including widespread deforestation, increased greenhouse gas emissions, social conflicts and damage to ecosystem services. As a result, companies operating across the palm oil value chain can face reputational and operational risks.