PRI coalition calls for improved palm oil practices

A coalition of signatories to the Principles for Responsible Investment (PRI) has called on palm oil producers to improve practices with the aim of “decoupling palm oil production from deforestation.”

PRI-Web-ColourThe PRI’s Sustainable Palm Oil Investor Working Group (IWG) calls on all palm oil producers to commit to ceasing deforestation, development on peat lands, and violations of human rights. The IWG noted in a statement that major producers including Wilmar International and Golden-Agri Resources have made strong commitments to this effect. IWG also stated support for other large producers understood to be working with palm oil purchasers on similar commitments on no deforestation, no development on peat and no exploitation of people, land and communities.

IWG continues to support the Roundtable on Sustainable Palm Oil (RSPO) as the central body for governance of sustainable palm oil production as part of its commitments, PRI said.

“The significant growth and accompanying globalisation of the palm oil industry means that producers must once and for all put aside the slash and burn mentality of their early years,” said Mark Mills, partner at Generation Investment Management and chairman of the IWG in a statement. “They must now adhere to environmental, social and governance practices which will ensure their license to operate and safeguard the capital provided by the industry’s increasingly global investors. Commitments such as those made by Wilmar provide a positive signal and direction for the rest of the industry. However these statements by no means replace the need for adherence to the RSPO principles and criteria”.

IWG was established in 2010 and has 28 member organisations and represents assets of approximately US$2.8 trillion. It supports the development of sustainable practises in the palm oil industry as being critical to the achievement of long-term investment returns.

“In its first three years the IWG engaged primarily with the buyers of palm oil to encourage them to purchase only Certified Sustainable Palm Oil,” PRI said. “In 2013 it began an engagement programme with the suppliers of palm oil to adhere to the principles and criteria established by the Roundtable of Sustainable Palm Oil.”