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Palm oil trend to ‘zero-deforestation’
continues
When palm oil giant First Resources
announced its latest sustainability p...
MANAGEMENT BRIEFING: DEFORESTATION PAGE 02
ways – there are understandably various
methods to define the loss of one too. ...
MANAGEMENT BRIEFING: DEFORESTATION PAGE 03
The Roundtable on Sustainable Palm Oil will
need to drive up market demand if i...
MANAGEMENT BRIEFING: DEFORESTATION PAGE 04
Indonesian paper manufacturer APRIL is
hoping that its achievement of the bench...
MANAGEMENT BRIEFING: DEFORESTATION PAGE 05
A long-standing mechanism of the
global sustainability movement,
certification ...
MANAGEMENT BRIEFING: DEFORESTATION PAGE 06
described the policy as “a major step in
our company’s history”, confirming tha...
MANAGEMENT BRIEFING: DEFORESTATION PAGE 07
In a statement accompanying the release
of the video, SumOfUs campaigner Hanna
...
MANAGEMENT BRIEFING: DEFORESTATION PAGE 08
look at what happened when the French
environment minister told people to stop
...
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Deforestation management briefing innovation forum august 2015

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Latest management briefing from Innovation Forum on sustainable forestry and palm oil issues, solutions, partnerships and progress.

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Deforestation management briefing innovation forum august 2015

  1. 1. Palm oil trend to ‘zero-deforestation’ continues When palm oil giant First Resources announced its latest sustainability policy it continued something of a trend for new and stronger commitments from corporates that produce, trade or use palm oil to completely eliminate deforestation from their supply chains. A long-standing member of the Roundtable on Sustainable Palm Oil, the Singapore-listed company’s new policy demands more stringent standards than the RSPO sets out for its members, which does not ban all deforestation. Working with forests campaigning group TFT, First Resources has prohibited the destruction of high carbon stock (HCS) forest, defined as containing more than 35 tonnes of carbon per hectare. Dozens of companies, including Unilever, Cargill, McDonald’s and Mars have made similar commitments in the last five years. This beyond-RSPO focus on zero-deforestation gives companies a chance to show leadership and more easily communicate with consumers, who can be confused by various deforestation commitments and certification. But as Glenn Hurowitz from the campaign group Forest Heroes says, the “decisive action” taken by First Resources shows that it is a company that is “ready to compete in the race to deliver the deforestation-free vegetable oil that consumers and investors around the world prize”. With hundreds of definitions even as to what constitutes a “forest” – the World Resources Institute says there are more than 800 different CONTENTS PAGE 01 Deforestation trends PAGE 03 Data digest PAGE 05 Analysis: certification PAGE 06 Activists and campaigning PAGE 08 Q+A: Simon Lord, Sime Darby Produced by Innovation Forum www.innovation-forum.co.uk 1 Rivington Place, London EC2A 3BA +44 (0)20 3780 7430 Editor: Ian Welsh Writer: Tom Idle Innovation Forum was founded by Toby Webb in 2014. We are a growing London-based company focusing on sustainable business analysis and debate around the world via events and publishing. Design by Alex Chilton Design DEFORESTATION TRENDS Howtovalueforestsandforest products Below: big palm oil continues to make forest commitments. Next page: natural capital risks recognised, and how to protect ecosystems, forests and livelihoods Howbusiness cantackle deforestation MANAGEMENT BRIEFING: DEFORESTATION – SEPTEMBER 2015
  2. 2. MANAGEMENT BRIEFING: DEFORESTATION PAGE 02 ways – there are understandably various methods to define the loss of one too. Some of these look at the loss of tree cover, others look at the change in use of the land, for example. So-called “zero-deforestation” policies leave little room for ambiguity, though, as they include not only promises to address the clearing of forests, but also details of other important elements of commodity production that go beyond deforestation, such as respect for indigenous land rights, obtaining free, prior and informed consent from local communities, and no use of forced or slave labour. Investors slow to take account of natural capital risks Thanks to the work of global initiatives such as TEEB (The Economics of Ecosystems and Biodiversity), the value of nature – including forests – is more visible than ever. Traditionally the domain of the global environmental movement, the range of important services our ecosystems provide to companies is slowly creeping into the consciousness of business leaders and investors – especially when a dollar value is attached to it. The latest research puts the value of nature’s services to the global economy at $125tn a year. And studies, such as those carried out by KPMG and the Natural Value Initiative, are putting a real emphasis on the risk exposure faced by sectors with a high natural capital dependency, including food, fisheries, water utilities and pharmaceuticals. Around 25-30% of the pharmaceutical market, for example, is derived from nature’s genetic diversity. According to Dorothy Maxwell, author of Valuing Natural Capital – Future Proofing Business and Finance, “it is estimated that one major drug is lost every two years as a result of natural capital degradation”. Research conducted by Trucost in Brazil found that the annual natural capital cost of sectors that the country’s banks and pension funds are financing amounts to $1,646bn. “Even if some of the sectors only had to pay a small proportion of these costs as a result of extreme weather events such as droughts or changes in consumer demand, shareholder returns and loan repayments would be adversely affected,” it says. In the abattoir sector, for instance, paying just 2% of its natural capital costs would be enough to wipe out its profits. Investors need to pay attention – and, slowly, they are. According to a study carried out by F&C Asset Management, investors are exploring new opportunities linked to biodiversity and ecosystem services but they are also increasingly concerned about potential risks. “Strategies being employed include ‘red-lining’ investments – making it difficult for people to access loans – in areas of high biodiversity and developing sector guidelines for environmentally sensitive sectors. For example, Rabobank has specific requirements regarding impacts on biodiversity for palm oil and soya,” says TEEB. The ecosystem protection and poverty reduction balance Demonstrating that the answers to environ- mental and economic problems are generally never straightforward, new research suggests that companies might be missing a trick by throwing all of their attention at minimising deforestation – for its own sake – and failing to look at it in terms of wider protection of ecosystem services. That is certainly the view of a new study that has analysed the impacts that some protected areas in Brazil, Costa Rica, Indonesia and Thailand have on both the storage of carbon emissions and in poverty reduction. It found that, despite the protected areas under the spotlight not necessarily being established with CO2 conservation in mind, collectively they have stored at least a billion additional metric tonnes of greenhouse gases. In economic terms, they have provided ecosystem services worth at least $5bn, according to Paul Ferraro, co-author of the study and researcher at Georgia State University in the US. However, the impact of less deforestation on CO2 is associated, in some cases, with the reduction of poverty and in others with its exacerbation. Protecting low-gradient plots from deforestation – which might be highly valued in agriculture and forestry – “may impoverish local populations without necessarily generating significant CO2 conservation,” says the study. Prevent deforestation in areas close to city centres and you might help to store more CO2. But it won’t help the farmers who would be further from markets to sell their produce. In Thailand, for example, the study shows that the smallest economic impact from prevented deforestation is produced at around 100 kilometres from cities. These locations have the biggest positive CO2 impact. A solution proposed by the study’s authors is to get the right balance between conservation of species and habitats, and that of human wellbeing. Ferraro says: “We are not trying to reduce deforestation, but to protect biological diversity, store CO2, prevent erosion or provide hydrological, pollination and tourism services, among other things.” ★ In Thailand, the smallest economic impact from prevented deforestation is at 100 KILOMETRES from cities – where the positive CO2IMPACTISBIGGEST Nature’s services worth$125tn ayearto global economy
  3. 3. MANAGEMENT BRIEFING: DEFORESTATION PAGE 03 The Roundtable on Sustainable Palm Oil will need to drive up market demand if it is to hit its target of 100% certified sales in Europe by 2020, the membership-backed group has admitted. A similar transformation is required among buyers in the key palm oil markets of India and China, although the challenges are even greater. RSPO has set a modest 2020 target of 30% and 10% respectively for the two populous countries. RSPO currently certifies 3.16m hectares, which produce 11.61m tonnes of sustainable palm oil every year – equivalent to 20% of global production. Only 2.43m tonnes (21% of the total certified production) was sold as a segregated or mass balance in 2014. This increases to 5.35m tonnes (46%) when certificates for certified palm are included. Europe is by far the biggest buyer of certi- fied palm, with a market share of 59%. By 2050, the worldwide demand for palm oil is expected to increase from 51m tonnes today to between 120m and 156m tonnes, accounting for around 65% of all oils traded, according to RSPO. Under RSPO rules, its 53 producer companies are prohibited from clearing new primary forest and high conservation areas for palm oil production. New plantations, meanwhile, must avoid peat areas. Farmer resettlement projects in the Brazilian Amazon, long held up as a socially responsible means of land redistribution, are leading to massive deforestation, an academic study has found. Research funded by the Brazilian parliament indicates that the resettlement programme has contributed to 13.5% of all deforestation mapped in the Brazilian Amazon to date. The study, from the UK’s University of East Anglia, looked at 1,911 settlements in 568 counties. Together, they cover over 267,000 square kilometres, equivalent to 5.3% of Brazil’s Amazon region. Forest cover within settlements declined to an average of 43.5% as deforestation rates and forest fires increased. Under the country’s agrarian reform programme, 1.2 million farmers have been resettled in the Amazon since the 1970s. The study follows findings from the Brazil-based National Institute for Space Research (NISR) indicating that deforestation in the Amazon shot up by 63% in the 12 months to 31 January 2015, compared to the same period a year earlier. Contrastingly, official government data covering August 2013 to July 2014 suggests deforestation decreased by 18% during this period compared to previous years, with 4,848 square kilometres of rainforest lost to fires, illegal logging and other causes. The number is down from 5,871 square kilometres for the same period in 2012/2013. Until 2014, Brazilian deforestation had not increased since 2008, according to NISR. Environmentalists had hoped that the govern- ment’s creation of the Action Plan for the Prevention and Control of Deforestation in the Legal Amazon in 2004 had set the country on a path of continued improvement. Palm oil company Golden Veroleum has declined to suspend any of its operations in Liberia, following a new report by UK campaign group Global Witness. The UK campaign group says that the company had pressurised local landowners to sign away land rights. The company, which strongly rejects the claims, owns the rights to convert 2,600 square kilometres of southeast Liberia into palm oil plantations. Nearly half (49.8%) of the west Africa nation’s land surface of 9.67m hectares comprises forest cover, according to the United Nations-backed Food and Agriculture Organisation. A European Union report published in 2012 estimates that around 75% of the total area of Liberia is now allocated to mining, rubber, oil palm and forest concessions. Sustainable palm oil needs demand-side boost Resettlement driving deforestation in Brazil Forest fears unfounded, says Golden Veroleum 49.8% of Liberia’s land surface – 9.67m hectares – comprises forest cover RSPO certifies 3.16m hectares, which produce 11.61m tonnes of sustainable palm oil every year RESEARCH Deforestationdatadigest Innovation Forum’s guide to recent deforestation research and analysis
  4. 4. MANAGEMENT BRIEFING: DEFORESTATION PAGE 04 Indonesian paper manufacturer APRIL is hoping that its achievement of the benchmark Programme for the Endorsement of Forest Certification (PEFC) will restore the confidence of its clients and investors. The PEFC certifica- tion follows the company’s decision to establish a deforestation moratorium after revising its sustainable forest management policy. APRIL says it now operates a 1:1 plantation to conservation ratio, exceeding the 70:30 ratio required by the Indonesian government. APRIL is the largest pulp and paper company in Indonesia. Together with fellow sector leader APP, the two collectively produce over four-fifths of the country’s pulp. PEFC, which operates in 36 countries, accounts for over 264m hectares of certified forests worldwide. APRIL’s PEFC certification comes as Indonesia commits to reduce deforestation by 80% by 2020. The target, which formed part of the 2002 Rio Branco agreement, was agreed by Indonesian members of the Governors’ Climate and Forest Task Force. The GCF seeks to curb emissions from rural development and deforestation. It involves 29 regions in eight countries, including Brazil, Ivory Coast and the US. The commitment, which will focus on six Indonesian provinces – Aceh, West Kalimantan, Central Kalimantan, East Kalimantan, West Papua and Papua – will aim to reduce deforestation from its current average of 323,749 hectares per year to an average 64,749 ha in 2020. In July, the United Nations issued a report on the impacts of land cover changes on the 55,000-strong orangutan population in Borneo, which includes Indonesia’s Kalimantan provinces. The UN anticipates a 15% reduction in the orangutan population’s current habitat of 251,000 square kilometres by 2080. Over half (56%) of Borneo’s tropical lowland forests were lost between 1985 and 2001. The figure could APRIL agrees moratorium FSC omitted in China’s new regulation governing certification Forest certification standards in China are to be governed under a new regulatory framework, the Chinese government has announced. The new arrangement will require certification bodies that currently audit Forest Stewardship Council (FSC) certificate holders to gain accreditation for the China Forest Certification Council standard as well. China’s Certification and Accreditation Administration does not specifically list FSC in its revised list of authorised certifications, although FSC says it has assurances that its standard will remain valid in the country. Separately, the board of FSC recently approved a set of international generic indicators that are designed to develop rise to between 68-81% once the effects of climate change are counted in. In southeast Asia as a whole, meanwhile, the UN estimates that 75% of the original forest cover will be lost by 2030 if deforesta- tion rates continue on their current course. In an attempt to advance sustainability within the international paper sector’s supply chain, the World Resources Institute and the World Business Council for Sustainable Development recently published a sustainable procurement guide for wood and paper-based products. national and interim national standards for forest stewardship. The indicators were devel- oped over three years. The initiative builds on FSC’s international outreach programme. In June, for example, FSC signed a cooperation agreement with the Republic of Congo to facilitate international market access for FSC-certified trees originating in the country. Almost 2.5m of government-owned forest concessions are now FSC certified, representing 50% of FSC-certified forest area in the Congo basin. The government’s target is to develop all forest concessions (representing around 11m hectares) by 2016. It plans for half these concessions to be certified as sustainable. APRIL’s PEFC certification comes as Indonesia commits to reduce deforestation by 80% by 2020
  5. 5. MANAGEMENT BRIEFING: DEFORESTATION PAGE 05 A long-standing mechanism of the global sustainability movement, certification and standards have proved effective in the fight against deforestation. But does the drive to adopt best practice standards have its limitations in the face of such a huge challenge A commonly-used instrument to fight many a sustainability challenge, standards, certification and labelling continue to play a prominent role in the fight to combat global deforestation. Standards developed by the likes of the Roundtable on Sustainable Palm Oil (RSPO), the Forest Stewardship Council (FSC) and Rainforest Alliance (RA) offer a useful framework to help organisa- tions make the right decisions. With more and more companies committing to obtain 100% of their commodity supply from certified or sustainable sources, they can be fairly comfortable in the knowledge that trusted standards will make it clear as to what is expected of them if they want to become more sustainable, resilient and successful businesses. The scale problem And these mechanisms – which see social and environmental NGOs collaborating with businesses – have been replicated many times and used for decades, with relative success. However, certification clearly has its limitations. The RSPO has been in existence since 2004 and has worked tirelessly to encourage the global supply chain to sign up to meet its set criteria of what it defines as best practice. Its 2,000 members represent 40% of the global palm oil sector. And yet just 20% (11.61m tonnes) of the world’s palm oil is currently certified under the RSPO system. It’s not just a problem for the RSPO. “While certification has proven itself as a powerful tool for change,” the 20m hectares of land that has been FSC-certified in tropical countries is “not nearly enough”, says Alistair Monument, the FSC’s regional director for Asia Pacific. Pointing to the 458 eco-labels currently being used in 25 sectors, Scott Poynton, founder of forests campaign group TFT, argues that it’s time to assess the performance of certification. In a recent inter- view with Mongabay, he claims that current standards are “too weak and have fallen behind the pace of best practice in the field” and that certification is stifling innovation. “Ticking someone else’s boxes – boxes that were created a long time ago with ‘lowest common denominator’ thinking – is no way to inspire innovation,” he says. Poynton instead advocates what he calls a “VTTV” system (values, transparency, trans- formation and verification), with companies setting their own goals based on their values – and focusing on the public-sharing of results ANALYSIS Certification’sprogressandpitfalls By Tom Idle which he says will drive performance. It’s a view that – while not wholly endorsed by the standards-setting community – has certainly got them thinking, admits Anita Neville, the Rainforest Alliance’s senior business development manager in the Asia Pacific region. “It’s a false promise to say certification is the only answer,” she says. “We need to avoid prescriptive, tick-box approaches and focus more on what standards intend the outcome to be, rather than the route companies take to get there.” Monument agrees. He says: “20 years of experience has shown us that we need to both continue improving certification and consider what other tools can be complemen- tary to it.” Worth a premium? Regardless of how successful standards have been in winning the war on deforestation these past 20 years, there remain some key challenges that need solving. One, of course, is driving meaningful demand and a willingness to pay a premium for sustainably-sourced products by the general public (something the RA says it has invested heavily in during the past 12 months, via improved media outreach). Another is in engaging hard-to-reach smallholder producers, particularly in the Asia Pacific region, to make certification accessible, cost effective and efficient for them – and plugging them into markets that value their efforts. Only time will tell if certification will play an active and successful role in the future, or whether it even has a role to play at all. ★ Scott Poynton, TFT: “Ticking SOMEONE ELSE’S BOXESis no way to inspire innovation.” Thereare458 eco-labels beingusedin 25sectors
  6. 6. MANAGEMENT BRIEFING: DEFORESTATION PAGE 06 described the policy as “a major step in our company’s history”, confirming that its new plan means “no deforestation, no new development on forested peatland and no compromise on our commitment toward conservation and community”. Greenpeace claims that its campaign, with the help of 165,000 disgruntled supporters, had forced Santander – one of the biggest banks in Europe – to end its commercial relationship with APRIL, in less than three weeks. “To its credit, Santander has listened and responded,” Greenpeace says. “But this would never have happened if Santander had had a robust policy to stop companies getting loans for destroying forests.” And the NGO will be keeping a close eye on what goes on in the forests. “APRIL has made promises like this before, so Greenpeace and other NGOs will be watching its progress very closely. If the company is breaking its promises, we will act,” it says. ★ Ralph Lauren vs Rainforest Action Network Luxury fashion label Ralph Lauren has been bearing the brunt of Rainforest Action Network’s campaign calling on clothing companies to stop using forest-sourced fabrics. The Out of Fashion initiative is designed to raise awareness about the connection between fashion brands and the deforestation and human rights violations which it says are a “common by-product of forest fabric production”. “Most people are unaware that some of the most popular fabrics worn today are made from trees. Rayon, viscose and modal are all produced from tree pulp, which originated as trees in Indonesia, Canada, Brazil and South Africa,” the campaign says. And it is winning attention and support, with tens of thousands of supporters signing a petition calling on Ralph Lauren to make sure rainforest destruction is cut out of its supply chain. According to RAN’s Brihannala Morgan, Ralph Lauren has been singled out because of its scale. “[The company] needs to step up. It uses a huge volume of forest fabrics in its clothing lines, and without a strong policy in place, it cannot guarantee that its fabrics are not driving deforestation and negatively affecting the livelihoods of communities on the ground. “There are some brands that are taking action on this issue, like H&M and Stella McCartney, but Ralph Lauren isn’t one of them. As one of the biggest fashion brands in the world, Ralph Lauren has the ability and resources to ensure that human rights abuses and forest destruction won’t be a part of their next collection.” Ralph Lauren has yet to publicly respond to the RAN campaign. ★ APRIL vs Greenpeace When the Spanish bank Santander pledged to stop offering loans to the paper company APRIL unless it addressed its Indonesian rainforest supply chain deforesta- tion issues, Greenpeace described the move as a “fantastic outcome”. Targeting the company’s financiers was part of the NGO campaign to force it to take action. The decision taken by Santander – to not renew its current funding agreement and that “any future loans will be conditional on APRIL implementing new sustainability measures which address its involvement with deforestation” – put enormous pressure on other international banks with financial links to APRIL to make similar commitments, Greenpeace said. So, what has APRIL done? Well, it has joined the other major pulp and paper player in Indonesia, APP, in promising to protect the country’s rainforests and peatlands. The company’s group president, Praveen Singhavi, ACTIVISTS & CAMPAIGNING Whoisbeingtargetedbywhom– andwhy? By Tom Idle A listening bank, says Greenpeace Does Ralph need a more robust forest policy?
  7. 7. MANAGEMENT BRIEFING: DEFORESTATION PAGE 07 In a statement accompanying the release of the video, SumOfUs campaigner Hanna Thomas claimed that PepsiCo’s use of palm oil contributed to modern day slavery in southeast Asia, as well as the clearing of rainforests and peatlands, driving species like the orangutan and Sumatran tiger to extinc- tion. Within a week, the video had been seen by half a million people. And SumOfUs didn’t leave it there. The group followed up the Doritos video with a campaign focused on the palm oil in products in PepsiCo’s Quaker cereal brand range. PepsiCo hit back, saying SumOfUs.org prefers to focus on fiction rather than fact. Speaking to edie.net, the company said: “It is no surprise that SumofUs’s continual mis-characterisations of our palm oil commit- ments are patently false and run counter to the positive reception our policies have received from expert organisations in this arena. “PepsiCo has repeatedly stated that we are absolutely committed to 100% sustainable palm oil in 2015 and to zero deforestation in our activities and sourcing.” It is not just SumOfUs on PepsiCo’s back. Its recent commitment to a zero-de- forestation palm oil-sourcing policy, while being acknowledged as a good first step, was described by the Union of Concerned Scientists as lacking “a strong commitment to full traceability, a demand for similar commitments from its suppliers and, most importantly, an implementation plan”. ★ Astra Agro Lestari vs Forest Heroes Forest Heroes got creative to force palm oil producer Astra Agro Lestari to take action on forest clearances across Indonesia. The business, which is the parent company of luxury hotel chain Mandarin Oriental, was targeted by a series of mocking video ads. Playing on the hotel company’s “She’s a fan” slogan and TV spots, regularly backed by celebrities such as Kevin Spacey, it created the slogan “She’s not a fan”. The campaigners splashed images of endangered Sumatran elephants all over the ads – one of the popular animals they claim are being threatened by the loss of habitat associated with Astra Agro Lestari’s expansion of palm oil plantations. The campaign also featured video footage captured by drones revealing some of the evidence that Forest Heroes claims supports its assessment that Astra Agro has cleared some 14,000 hectares of forest since 2007 and cleared 27,000 hectares of peatland in Indonesia – something it says can have “major negative consequences for global climate change, because both types of habitats play an important role in carbon sequestration”. In a rather damning statement, the campaign stated: “Many palm oil companies have engaged in questionable behaviour over the past decades – but it seems like only Astra is proud of it.” However, Astra Agro insists it “takes environmental stewardship very seriously and has always complied with the extensive laws and regulations in Indonesia, and has made commitments that go beyond legal requirements”. But the campaign seems to have worked, with the company promising that “there will be no clearance of any natural forest either by the company or any of its contractors across all its operations in Indonesia”, and confirming the company’s support for the Indonesian Palm Oil Pledge. ★ PepsiCo vs SumOfUs The TV ad campaigns for US snack brand Doritos rarely disappoint and the one aired during the most recent Super Bowl American football final in the US was another hugely successful TV spot for the brand. However, jumping on the bandwagon to take advantage of America’s love affair with the popular snack, the campaign group SumOfUs.org created a spoof version titled A Cheesy Love Story – The Ad Doritos Don’t Want You to See. Pointing to the buying-influence of Doritos’ parent business PepsiCo, which procures almost 430,000 tonnes of palm oil a year, the group said: “Given how high profile the Doritos Super Bowl campaign is, we’re using this opportunity to let consumers around the world know about PepsiCo’s irresponsible palm oil sourcing policy”. Crunch time for PepsiCo’s sourcing policies
  8. 8. MANAGEMENT BRIEFING: DEFORESTATION PAGE 08 look at what happened when the French environment minister told people to stop buying Nutella because its parent company Ferrero was cutting down trees. Greenpeace came out in its defence, pointing to Ferrero’s sustainable deforestation policies and its membership of the Palm Oil Innovation Group. NGOs advocating on behalf of responsible palm oil producers never happened before, but NGOs are realising that while the stick is important, so is the carrot. How important is collaboration? The SPOM is bringing together some big players to collectively drive action. What’s the secret to success? Well, I wouldn’t say it is a success yet. But the SPOM is a genuine attempt to get to the bottom of deforestation, to put some robust science into the process and to give more of an objective view. But what we don’t want to do is create lots of different methodologies for tackling deforestation – that will just confuse people. So, what’s next for the palm oil deforestation movement? Well, there are tens of hundreds of producers, and tens of thousands of palm oil users. But most palm oil passes through the hands of refiners, and there’s only a few of them. Next up is to bring those refiners together to make sure they stick to the same high sustainable ideals – that would be a great move forward. ★ For more on the debate about differing HCS approaches see www.innovation-forum.co.uk. Collaboration is crucial to breaking the link between palm oil and deforestation says Sime Darby’s Simon Lord, speaking to Tom Idle Sime Darby is the largest producer of certified sustainable palm oil. But how would you describe your deforestation strategy? Does it go beyond the demands set out by the Roundtable on Sustainable Palm Oil (RSPO)? It does. We still haven’t broken the link between palm oil and deforestation. So, together with five palm oil producers in Malaysia, as well as the likes of Wilmar, we helped to form the Sustainable Palm Oil Manifesto (SPOM). As part of this, we have committed to go beyond RSPO and have set up a high carbon stock (HCS) study which seeks the views of 50 independent scientists. This approach not only looks at biodiversity and socio-economic aspects, but also at greenhouse gas emissions too – not only the above-ground emissions, but those emanating from the soil – in a bid to establish the true impact of cutting down forests. How tough is it for Sime Darby to stick to such a strict, high carbon stock deforestation policy such as that set out by the likes of SPOM? It’s very tough. Explaining to people that there are areas of land where we cannot develop as a responsible producer of palm oil is difficult when you are operating in countries where poverty is rife and basic needs are not being met. Yes, it should be a sovereign right for national governments to choose what happens. But it’s also a sovereign right of responsible producers to decline. We currently sit in the middle of this very uncomfortable situation. Is it hard pushing tough policies through internally? Is there enough value attached to doing the right thing? It is a big issue because nobody wants to reward you for doing the right thing, so there isn’t a business case. Just 20% of palm oil is certified as being sustainable. But if the other 80% is attracting a better price it is awfully hard to persuade the 20% to go even further and push the envelope. How important have certification schemes like RSPO been in moving the industry in the right direction? Well, single company commitments to “no deforestation” tend to go narrow and deep. But they do not seem to have given much thought as to how they will verify their position on the ground. RSPO gives you that verification and helps you to look at a large breadth of sustainability issues. Bodies like RSPO are absolutely vital. To use a military analogy, if RSPO is the infantry, you also need the cavalry – progressive companies – to keep pushing for change. What about NGO activism as a driving force of positive change when it comes to ecosystem preservation? NGOs have a tremendous role to play. Just Q&A Breakingpalmoil’sdeforestationlink By Tom Idle, with Simon Lord, Sime Darby JUST 20% OF PALM OIL IS CERTIFIED AS BEING SUSTAINABLE NEXT IS TO BRING REFINERS TOGETHER AND MAKE SURE THEY STICK TO THE SAME HIGH IDEALS WE HAVEN’T BROKEN THE LINK BETWEEN PALM OIL AND DEFORESTATION Dr Simon Lord DrSimonLordisexecutive vice-president forgroupsustainabilityandqualitymanagement at SimeDarby,andwillbe speakingat InnovationForum’sdeforestationconference inSingapore on28th-29thSeptember.

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