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

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
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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. 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. 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. 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. 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. 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. 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. 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.