SUPPLY CHANGE

Dear Colleagues,

Things are not so golden at agribusiness giant Golden Agri-Resources (GAR) these days. A subsidiary of the Singapore-based company has recently been accused by Roundtable on Sustainable Palm Oil (RSPO) of failing to adhere to its rules before converting land for palm planting in West Kalimantan.

In May, RSPO ordered the subsidiary to halt buying or developing new plantations in Indonesia, citing concerns it had violated rules on conservation assessments and consent of local people. The RSPO can withdraw a company's membership in the organization, which could adversely impact its sales.

"Our customers, of course, had concerns about this negative publicity," Agus Purnomo, GAR's new managing director for sustainability, told Reuters. "Our traders on the front line keep receiving general enquires [from customers]."

GAR has reorganized its management structure and is holding weekly calls with major buyers to address their concerns and working with environmental groups to improve the company's sustainability performance, Purnomo said.

Meanwhile, Cargill and GAR pledged to investigate supplier Eagle High Plantations in response to an Indonesian environmental group's report documenting rainforest destruction in New Guinea. Both companies have committed to eliminating deforestation from their supply chains and are signatories to the Indonesian Palm Oil Pledge (IPOP).

"Cargill has maintained trading relations with a company that remains involved in deforestation - something that is obviously not in line with IPOP and Cargill's commitment to forest protection in all its agricultural supply chains, including in the palm oil sector," wrote Greenomics-Indonesia in its report. "In the context of cleaning up their supply chains from deforestation, GAR stated that this process would commence in early March 2014."

More sustainable agriculture news is summarized below. For questions or comments, email info@supply-change.org.

-The Supply Change team

 

--------

Recent Events

Supply Change partners Ecosystem Marketplace and CDP recently co-hosted the webinar Supply Change Meets CDP Forests: Benefiting from Annual Disclosure. The presentation recording and slides are available here.

Webinar topics included comments from Kellogg Company Senior Sustainability Manager Amy Braun, who highlighted the actions Kellogg is undertaking and the value CDP disclosure and transparency through company commitment tracking and benchmarking platforms such as Supply-Change.Org: "The tools are really important: measurement and evaluation is huge part of how we go from just having commitments to having outcomes," she said.

Supply Change partners also outlined steps toward the project's full launch in fall 2015 at Climate Week NYC, as well as CDP's activities leading up to the Conference of Parties in Paris and changes to CDP's 2015 Forest questionnaire.

 

--------

Recent News

Speak soft commodities and carry a big money stick

The number of banks signed onto the Soft Commodities Compact has risen to 101 with the addition of Standard Charter and now covers 20% of the global agricultural commodity market. The Compact, which aims to mobilize the banking sector in transforming agricultural commodity, also known as soft commodity, supply chains towards zero net deforestation activities, was released in 2014. The authors of the compact - the Consumer Goods Forum and the Banking Environment Initiative, with input from the World Wildlife Fund - agree to finance the growth of sustainable soft commodity producers, as well as put pressure on clients to source from sustainable producers.
Read more at RTCC

I can't believe it's not conservation-grade butter!

A new study has found that consumers may be willing to pay 15% to 56% more for consumer goods that contain "conservation-grade" palm oil over goods that contain conventional palm oil. Researchers surveyed customers buying margarine at UK supermarkets to calculate the price premium. They then used this number to look at the cost-effectiveness of conservation in Asia and found that smart certification could incentivize palm producers to conserve more land - to a point. The study was published in the Proceedings of the National Academy of Sciences.
Read more from Business Green

Quick on the withdrawal

Bunge, an international agricultural trader, has suspended activity with BLD Plantation Bhd over reports that the palm oil company is planning to develop 14,000 hectares of peatlands on the island of Borneo. The statement came just one day after a formal grievance from campaigners Forest Heroes. The clearance could result in the release of approximately 37 million tonnes of carbon dioxide and contradicts Bunge's commitment to eliminate deforestation and peatland development from its palm oil supply chain.
Read more at Mongabay
Grievance from Forest Heroes

Good for our hearts, bad for our forests

The U.S. Food and Drug Administration announced recently that it will require food manufacturers to eliminate trans fats by 2018 - a move that the agency expects will prevent thousands of fatal heart attacks each year. The new rule is likely to increase demand for palm oil, a common substitute for trans fats that can contribute to tropical deforestation. Many food manufacturers and retailers have already phased out trans fats from their products, contributing to a surge in palm oil consumption over the last decade. Between 2002 and 2012, U.S. imports of palm oil increased by 352%.
Read more from Mongabay

Putting soy on the map

The Round Table on Responsible Soy (RTRS) launched an online mapping system to identify High Conservation Value Areas in regions where soy cannot be produced, with the goal of keeping forests safe from the "agricultural frontier." The mapping system is already available in Paraguay and Brazil and will be considered for Argentina. The maps are used in conjunction with the Guides for Responsible Expansion of Soy, which pre-assess the risks of expanding soy production to forests and other ecosystems. RTRS stakeholders are working towards a target of getting 10 million tonnes of responsible soy on the market by 2017, up from 1.3 million tonnes today.
Read more from RTRS

 

--------

Commitment Updates

It's a First

First Resource, the Singapore-based palm oil producer, has reportedly increased the stringency of its sustainability policy in a July 1 update. The updated policy commits to zero deforestation, protecting high carbon stock forests, and eliminating human rights abuses in its operations. This policy goes beyond what is required of First Resource through its RSPO membership. It is the first company operating primarily at the grower level to make such commitments. The policy was designed in cooperation with a coalition of environmental groups including The Forest Trust and Forest Heroes.
Read more from Mongabay
First Resource's Policy on Sustainable Palm Oil

Thirst (and deforestation) stops here

Coca-Cola Enterprises (CCE) committed to having all cardboard and corrugated packaging certified under the Forest Stewardship Council by the end of 2015, according to its 10th annual corporate sustainability report. The company also promised to recycle more packaging than it uses and to reduce by 25% the amount of material used across all packaging formats by 2020. Currently, packaging accounts for almost half of the carbon emissions in CCE's value chain. "Most of the corrugated packaging we use comes from recycled sources. However, a small proportion of virgin fiber is still needed for strength and this needs to be carefully sourced," said Hubert Patricot, Executive Vice President and President of CCE European Group.
Read more at Food Production Daily
Coca-Cola Enterprises 2015 Corporate Sustainability Report

Supply-Change.Org
 

Forest TrendsEcosystem MarketplaceCDPWWFThinkParallaxClimate and Land Use AllianceGEFPROFORJPMorganChaseUNEP