Palm oil industry reaches tipping point
According to Catapult, which describes itself as a mission driven consulting organisation that works…According to Catapult, which describes itself as a mission driven consulting organisation that works for progress on the world’s most pressing environmental and social challenges, the palm oil industry has crossed an important threshold. A new policy from Golden Agri-Resources (GAR) means that most of the palm oil in the world is going to come from sources that don’t drive deforestation. GAR has long been a significant player in the palm oil industry, said Catapult, and is the second-largest palm oil grower in the world. In 2011, responding to Nestlé’s Responsible Sourcing Guidelines, GAR worked with the sustainable products non-profit TFT and Greenpeace to establish a landmark Forest Conservation Policy for the palm oil it grows.
But GAR’s 2010 policy did not apply to the palm oil it traded – which, at the time, was minimal, claims Catapult. Over the past year, however, GAR has dramatically expanded its trading operation and now controls about ten percent of global palm oil trade.
GAR has announced that it is extending its Forest Conservation Policy to the palm oil it trades. The company’s new policy puts it in line with Wilmar International’s “No Deforestation, No Peat, No Exploitation” policy, according to Catapult. Wilmar controls about 45 percent of global palm oil trade.
“GAR’s announcement signals that an industry that has been synonymous with deforestation and species extinction is rapidly evolving towards responsible production,” said Glenn Hurowitz, executive director of Catapult. “The industry has reached a tipping point. Consumer companies now have several different options to source deforestation-free palm oil, and no longer need to rely on companies like Cargill and IOI that continue to resist change. Investors should take note that companies that continue to deforest just aren’t going to have the same kind of market access as their competitors. In the debate over the future of the palm oil industry, the forests are winning.”
