SUPPLY CHANGE

March 7, 2016

Dear Colleagues,

In a letter sent to the Roundtable on Sustainable Palm Oil (RSPO) last summer, a group of investors and consumer brand companies representing $5 trillion in assets called on the palm oil association to do better. To wait until 2018 for the next scheduled review of RSPO’s Principles and Criteria “would be inconsistent with the imperative of addressing deforestation, peatland conversion and human rights violations swiftly and efficiently,” wrote letter signatories, which included Colgate, Dunkin’ Brands, General Mills, Johnson & Johnson, Kellogg, Starbucks, Walmart, and other major brands.

RSPO responded and last month released the much-anticipated voluntary RSPO NEXT certification standards, which try to answer the letter writers’ concerns. Companies that use RSPO NEXT will be required to make public zero deforestation policies, with new cultivation allowed only on land with low-carbon vegetation values. Many of the Roundtable’s highest performing members – Wilmar, Golden Agri-Resources, Cargill and others – have done this already. It also requires companies to publicly monitor and reduce their greenhouse gas emissions, stop planting on peatland, negotiate compensation packages for workers in countries with no minimum wage laws, and – partly in response to the catastrophic forest fires in Indonesia last year – develop action plans for fire management. RSPO NEXT is only available to certified RSPO producers whose holdings are at least 60% RSPO compliant and to RSPO buyers whose purchases are 100% RSPO-certified.

Reactions to RSPO NEXT were mixed. Unilever welcomed it, saying in a statement to Food Navigator that the new standard “integrates the best practices embodied in the RSPO principles with the level of ambition demonstrated by leading company approaches.” Yet large palm oil growers that might be eligible – such as Wilmar and Golden Agri-Resources – are still weighing whether to pursue the new standards, and some environmental groups have raised concerns about whether they go far enough – especially because the above-and-beyond certification is voluntary.

“RSPO’s ‘Next’ scheme is a failed upgrade,” said Ratri Kusumohartono, a forest campaigner for Greenpeace Indonesia. She said the new standards are limited in strength because they do not define deforestation or delineate the upper carbon-content limit for land conversion. They also promote a “net carbon” approach, allowing companies to clear forest in one area of their concession so long as the deforestation is offset by the protection of another area. It would have been much better had the RSPO adopted the Palm Oil Innovation Group charter, which has much stronger environmental protections, she told the Food Navigator.

More stories about changing supply chains are summarized below, so keep reading!

-The Supply Change team

 

 

--------

Upcoming Events

Innovation Forum: How business can tackle deforestation
Washington DC, 6-7 April 2016

As part of a broader, global series of meetings, including London and Singapore, this forum will bring together key corporate practitioners, NGOs and governmental representatives for a post COP21 outlook, to discuss and debate how far we have come in tackling deforestation risks, implementing policies and collaborating effectively.

There will be focused debates and practical working sessions on smallholder farmer engagement, forest restoration, meeting company commitments, and clarifying zero net-zero deforestation.

You can see more info on the event here. Forest Trends’ Ecosystem Marketplace is pleased to be a Media Partner at the event and welcomes our friends and colleagues to register at a 20% discount using the code IF20D.

 

 

--------

Recent News

Coming to a shelf near you

Worldwide production and sales of soy certified by the Roundtable on Responsible Soy (RTRS) grew by 70% in 2015 to more than 2.3 million tonnes transacted in 2015.  Even though this accounts for less than 1%  of worldwide soy production, Marcelo Visconti, Executive Director of RTRS, sees it as a positive sign as the RTRS transitions to supplying certified volumes for mass market consumption. Unilever is the first company to advertise the RTRS logo on one of their products, their Ades soy beverage. This all comes as the RTRS undergoes an internal review process of its Production Standards, which is scheduled for approval in May.
Read more from the Round Table on Responsible Soy.

 

An Astra-nomical 180 on palm oil

Indonesia’s second largest palm oil producer, Astra Agro Lestari, has joined the Indonesian Palm Oil Pledge (IPOP), taking a zero-deforestation pledge alongside fellow IPOP members Wilmar, Golden Agri-Resources, Musim Mas, Asian Agri and Cargill. This is a major change to Asta’s outlook on the issue, and it comes on the heels of a shame campaign which singled out the company out for its destruction of forests. The reversal is especially surprising considering that Astra’s director, Joko Supriyono, is chair of the Palm Oil Producers Association and has been a vocal opponent of palm oil regulations.
Read the press release from IPOP

 

Without a trace

The January release of Wilmar's two-year update on its zero deforestation policy attracted mixed reactions. Glenn Hurowitz, Senior Fellow at the Center for International Development, praised Wilmar as a leader among agri-giants for its progress in supply chain transparency, supplier engagement, rapid response to civil society grievances, and for beginning to break the link between deforestation and palm oil. In a press release, Annisa Rahmawati of Greenpeace Indonesia criticized Wilmar’s lack of progress toward eliminating social conflict and proving its suppliers are not responsible for accelerating deforestation in Indonesia.
Read more from Eco-business

 

Norwegian funding on re-peat

In a recent press release, the Norwegian Government committed to continue the 2010 environmental funding partnership with the Indonesian government and to provide $50 million in support of Indonesia’s national Peat Restoration Agency (BRG). Indonesia’s new President Joko “Jokowi” Widodo established the BRG following international criticism sparked by last fall’s devastating peatland and forest fires. The BRG is tasked with restoring two million hectares of peatland by 2020. This agreement comes with the expectation that by December Indonesia will establish a “comprehensive and transparent monitoring system on [the] status of peatland protection and restoration.” The news was buoyed by separate announcement by the U.S. government to provide a $17 million grant for peatland restoration in Jambi province, Indonesia.
Read more from Mongabay

 

A ripped seam in the scheme

A review of the Forest Stewardship Council’s (FSC) operating model draws a mix of praise and criticism. On one hand, FSC’s advocates report promising outcomes such as reduced forest loss and air pollution, improved working conditions, and enhanced community engagement. On the other hand, critics point at FSC affiliated companies that have been exposed for overcutting, forced convictions, land grabbing, and fraudulent permits. Simon Counsell, disillusioned FSC founder who now runs FSC Watch, believes that using third-party certifiers has created a system of perverse incentives that rewards accrediting groups for loosening standards. The FSC’s 2015 strategic plan aspires to reach 20% of the global wood market; in contrast, critics suggest suspending bad actors and improving certification quality.
Read more from Mongabay

 

Brazil’s return to slash and burn

Last year showed a significant spike in the number of forest fires in Brazil, primarily in its Amazonian region. Blame for the 25% increase is being laid upon an ugly marriage of climate change and economic recession. Climate change has created excellent physical conditions for igniting forest fires while recession has prompted the government to reduce spending on regulatory enforcement and expand its concession lands. Examples of slashed regulation include two new bills in debate: one to remove a ban on infrastructure projects in indigenous territories and another to replace the current system of environmental impact assessments with a self-licensing procedure conducted by companies themselves.
Read more from Climate Home

 

Green bankrolling on a roll

A growing number of financial institutions are developing incentives for sustainable agricultural production among their clients. HSBC has financial products with preferential credit discounts for companies trading in RSPO certified palm oil, while RaboBank has prioritized access to credit for “leaders in sustainability.” Under the Soft Commodities Compact signatory banks are obliged to develop financial mechanisms for assisting non-RSPO corporate and investment banking clients to become RSPO-certified by 2020. Yet without cooperation among the underwriters of major agricultural loans and initial public offerings of private companies going public. Eric Wakker of sustainability consultancy Aidenvironment has called the efficacy of these types of initiatives into question. “One bank isn’t going to give incentives when the others don’t,” says Wakker.
Read more from Mongabay

 

 

 

 

Supply-Change.Org
 

Forest TrendsEcosystem MarketplaceCDPWWFThinkParallaxClimate and Land Use AllianceGEFPROFORJPMorganChaseUNEP