June 16, 2015

Dear Colleagues,

Companies are taking a variety of approaches to reducing deforestation from their agricultural commodity supply chains. Certification is one of them. But the forest protection is only as good as the guidelines and enforcement underlying the certification standard, which in the case of the requirements for palm oil, is not nearly as stringent as it should be, according to a group of environmentally-focused corporates and investors.

For palm oil, the certification body is the Roundtable on Sustainable Palm Oil (RSPO), which certifies 20% of palm oil produced globally. The organization is scheduled for a review of its principles and criteria (P&C) in 2018, but that isn’t soon enough for a group of companies and investors worth over $5 trillion in assets. Ahead of RSPO’s annual meeting earlier this month, five of the top 10 corporate purchasers of palm oil globally: Colgate-Palmolive, Kao Corporation, PepsiCo, the Procter & Gamble Company, and the Johnson & Johnson Family of Consumer Companies, plus 91 other companies and investors delivered a letter to the RSPO secretariat calling for improved standards.

The letter, organized by Green Century Capital Management, the Office of New York State Comptroller Tom DiNapoli, and investor coalition Ceres, cites a growing number of commitments that explicitly go beyond the sustainability requirements set by RSPO as evidence of the need for greater stringency. The authors task the RSPO to address conservation of high carbon stock (HCS) and peatland areas, ensure traceability to the field, implement greenhouse gas accounting and strengthen transparency and monitoring. And they want it done in 2016.

In its response, RSPO recognizes the issues and said it is working toward similar improvements through a proposal for voluntary guidelines, so-called RSPO+. This addendum to the existing standard would enhance requirements on deforestation, peatland development and the rights of indigenous peoples.

But voluntary action isn’t enough for some. "The recently announced RSPO+ initiative is an important step that demonstrates the organization’s attentiveness to the concerns we raise in this letter and ability to innovate in response to evolving expectations," Lucia von Reusner, from Green Century Capital Management, told Mongabay. "However, these standards ultimately need to be incorporated into the core [principles and criteria] applicable to all member companies, in order for the RSPO to avoid confusion and logistical complexity in the marketplace and supply chain.”

The RSPO Board of Governors will consider the RSPO+ proposal at the end of June.

More sustainable agriculture news is summarized below. For questions or comments, email

-The Supply Change team


Upcoming Event

Webinar - Supply Change Meets CDP Forests: Benefiting from Annual Disclosure, July 8, 11:00 AM EDT
By disclosing deforestation information through CDP in 2014, more than 160 companies informed investors and other stakeholders about the commitments being made to tackle deforestation in their operations and supply chains. CDP’s 2015 disclosure cycle is underway, and on the call Jillian Gladstone will inform companies on how they can use CDP’s standardized platform to provide transparency into the management of deforestation risk to a variety of end users including Supply Change, as well as nearly 300 institutional investors.

Supply Change Research Assistant position available

Based in Washington, D.C., the Research Assistant will support Supply Change, a project that provides real-time information on the extent and value of commitment-driven commodity production and demand. The position involves researching public commitments to reduce supply chain impacts on ecosystem degradation, compiling data in Excel, identifying news for the Supply Change web platform, and conducting stakeholder outreach. The successful candidate will have excellent research, organizational and writing skills; an interest in agricultural commodity-related deforestation; and experience with Excel. The position runs for an initial three-month period at a negotiable hourly rate.
Read more about the position here.



Recent News

Green Slip
New York-based Investment firm Herakles Farms suspended palm oil plantation development in the Mundemba and Toko concession areas of Cameroon as of May 29, according to workers. The concession areas overlap with Korup National Park and Rumpi Hills Forest Reserve, biodiverse protected areas that would be negatively affected by pesticides, fertilizers, and sewage disposal associated with palm oil plantations. Herakles Farms was granted a 3-year concession by presidential decree in 2013, but failed to fulfill required social and environmental conditions, including conducting impact assessments and paying land rents. According to affected workers, the company laid off workers without compensation and failed to register its employees with the National Social Insurance Fund.
Read more from IC Magazine
Herakles Farms statement

Picking up the pace
Responding to pressure from environmental groups and banks, Asia Pacific Resources International (APRIL) pledged to end deforestation in its supply chain. The pulp and paper company said it has stopped using wood from natural forests and forested peatlands and committed to using only plantation wood by the end of 2015. Last year, APRIL announced it would stop obtaining wood from natural forests by 2020, prompting criticism that the company wasn’t moving quickly enough to combat deforestation. “The announcement last year largely backfired,” said Lafcadio Cortesi, Asia director of environmental advocacy group Rainforest Action Network. “They just were not being taken seriously.” This year’s announcement has been greeted more optimistically. The World Wildlife Fund “cautiously welcomed” the policy, noting that it sets a new standard for the pulp and paper industry in Indonesia.
Read more from the Wall Street Journal
WWF Response

No more sourcing for you

Golden Agri-Resources (GAR) has suspended new purchases from palm oil supplier Austindo Nusantara Jaya (ANJ) Agri as of May 28, according to a company spokesman. The move was prompted by a second report from NGO Greenomics-Indonesia documenting destruction of rainforest by ANJ. Its first report in July 2014 resulted in Wilmar halting purchases from the supplier this past April. Despite signing no-deforestation pledges, palm oil traders Asian Agri and Musim Mas are still sourcing from ANJ. Musim Mas has indicated it will suspend purchases if ANJ fails to produce a HCS assessment by the end of last month. No announcement had been made as of this newsletter’s publication deadline.
Read more from Mongabay

Ahead of the palm oil pack

The state of Sabah in Malaysian Borneo is considering a proposal to produce only RSPO-certified palm oil by 2025. If the proposal is approved, Sabah – which accounts for 12% of global palm oil production – would be the first sub-national entity to commit to producing 100% certified palm oil. Some government officials view certification as an opportunity to gain a competitive advantage. “Both global demand and downstream industries will increasingly pull the supply chain for Certified Sustainable Palm Oil and Sabah must act to be ahead of the curve,” said Sam Mannan, Director of the Sabah Forestry Department. "With time, large competitors will inevitably outpace Sabah’s total output of palm oil but with certification, Sabah can build itself as a niche producer of a branded good – i.e. certified palm oil, and compete on the basis of governance and not size."
Read more from Mongabay



Commitment Updates

No need for a Plan B

On June 4, retailer Marks & Spencer (M&S) reported on its sustainability activity for the first time since launching Plan A 2020 a year ago. M&S achieved 47 commitments and ensured that 64% of its products have an eco or ethical quality above the market norm, according to the report. The company achieved at least two commitments on commodities directly linked to deforestation, palm oil and leather. All palm oil used in M&S products is covered by RSPO certification and 26% of leather used meets the Independent Leather Working Group Standard.
Read more from The Grocer

Better burger

Meat processing giant JBS publicly disclosed the results of an independent audit of its cattle purchases last week. Of the 12,221 sales reported in 2014, only four were from farms that do not conform with the company’s no-deforestation policy. After a 2009 Greenpeace report brought attention to the link between cattle production and forest clearing in the Amazon, JBS pledged not to purchase cattle from ranches responsible for deforestation in the Amazon Biome region.
Read more from Global Meat News

Checking out of deforestation 

Astra Agro Lestari (AAL), a palm oil company owned by Jardine Matheson, has announced an immediate moratorium on all natural forest clearance and has signed onto the Indonesian Palm Oil Pledge. The action is in response to a campaign from Forest Heroes targeting the Mandarin Oriental, a luxury hotel chain also owned by Jardine Matheson. AAL said it is now in the process of developing a full sustainability policy to include protection for high conservation value and HCS forests.
Read more from Forest Heroes
Statement from Astro Agro Lestari