Two new reports on palm oil sustainability released by WWF

Demand for Roundtable on Sustainable Palm Oil (RSPO) certified sustainable palm oil (CSPO) in Asia has to date been limited, inhibited by complex challenges such as low consumer awareness and a lack of clear labelling of palm oil products. While a number of tactics could help shift business behaviour, a persistent lack of transparency on the palm oil footprint of companies in the region makes it difficult to design effective strategies aimed at accelerating corporate action on sustainable palm oil. 

The opportunity for Asian markets to drive meaningful, positive change in the palm oil value chain is unequivocal: Asia consumes approximately 60% of the world’s palm oil, and Indonesia, India and China are among the world’s top consuming countries. Indonesia and Malaysia account for 86% of global palm oil production, and palm oil is a primary source of income for an estimated 4.3 million people in these two countries alone. 

To uncover critical opportunities for palm oil buyers to take impactful action on sustainable palm oil in Asia, WWF has recently published two landmark studies:

Palm oil trade from key landscapes in Asia: Risks and opportunities for action sheds light on the global palm oil value chain linked to six landscapes that are rich in biodiversity and where palm oil production is prevalent: Tabin, Tawau, Lower Sugut in Sabah, Malaysia; and Tesso Nilo, Sintang and South Papua in Indonesia. For each landscape, the study identifies key companies involved in the production, trade and purchase of palm oil, and assesses their level of exposure – or the likelihood they are sourcing from the considered landscape. The result is greater visibility and traceability into palm oil supply chains linked to key landscapes, bringing into sharp focus the supply chain connections that can be leveraged to drive better sustainability and transparency outcomes.

Sustainable palm oil uptake in Asia: Where do we go from here? highlights the huge potential for five Asian markets to boost their sustainable palm oil consumption. The study provides credible market intelligence on palm oil consumption and sustainable palm oil uptake across five key Asian markets (China, India, Indonesia, Malaysia and Singapore), which together account for almost half of global palm product consumption. The report contains estimates on both conventional and RSPO CSPO volumes for 2019, in addition to highlighting key players, applications sectors and interventions in each market that can help expand the uptake of RSPO-certified palm oil in Asia by one million tonnes per year.

Is tree-planting a cure-all solution for deforestation?

Tree planting has been a common solution for companies and nations to combat the effects of climate change and deforestation. Just recently, Viet Nam revealed a new government policy on the one-billion tree program. The policy aims to plant one billion trees across the nation by 2025.

Whilst the efforts are laudable, tree planting should not be taken as a cure-all. Stakeholders need to make science-based decisions, and consider multiple aspects of planting:

– Density of the trees: Trees need a network to thrive.The location of the replanting efforts – not all lands are suitable for reforestation.
– The species of trees used should be native and non-invasive.
– Benefits arising from the project need to be spread equally across the local community.
– Account for transparency of the projects through public disclosure.

Overall to maximise impact, the focus on planting needs to be shifted to tree conservation and growth as well as forest restoration and management.

How are pandemics linked to deforestation?

World Wide Fund for Nature (WWF) has launched an interactive site on how deforestation (and particularly deforestation in the tropics) and the resultant loss in nature can lead to the transmission of zoonotic diseases. Find out more here.

Deforestation in Asia: Challenges & solutions for the palm oil industry

Palm oil is the world’s most versatile vegetable oil. It is in nearly everything, from packaged food products to deodorant and lipstick. Grown only in the tropics, it contributes to economic development in many regions, especially Southeast Asia. If produced sustainably, this crop can benefit both people and nature.

However, unsustainable production has led to widespread destruction of rainforests and biodiversity. Habitats of endangered species like the orangutan and Sumatran rhino continue to be threatened, along with the rights of local communities and indigenous people.

To shed light on this important topic, WWF held a four-part webinar series, “Deforestation in Asia: Challenges & solutions for the palm oil industry” from 25 May – 3 June 2021. The webinar series concluded last week, with more than 800 attendees spanning various sectors of the palm oil supply chain. By providing an overview of the palm oil landscape in Singapore, referencing successful case studies, and delving into discussions targeted at buyers and financial institutions, the series provided a well-rounded approach for increasing CSPO uptake.

The recordings and materials have been consolidated for your viewing pleasure:

(Webinar 1) Palm oil consumption and trade flows in Asia: Risks and opportunities for action
Recording | Presentation deck

(Webinar 2) Palm oil industry transformation in Asia: Role and responsibility of buyers
Recording | Presentation Deck

(Webinar 3) Addressing palm oil-driven deforestation: A way forward for financial institutions
Recording | Presentation Deck

(Webinar 4) The Living Landscapes approach: Progress and lessons from Sabah
Recording | Presentation Deck

ISEAL publishes “Boosting demand for sustainable palm oil in Asia” report

In February,  ISEAL held a webinar on how to strengthen demand for sustainable palm oil, based on Asian case studies. ISEAL has also published a full report summarising insights, strategies and activities in 5 Asian countries (China, India, Indonesia, Malaysia and Singapore) on how to boost demand for sustainable palm oil.

Key insights of the study include:

  • Corporations in India and China are lagging behind their peers in other countries, regarding sustainable palm oil commitments.
  • In Asia, price sensitivity and lack of knowledge are some of the largest barriers for businesses.
  • The interest for sustainable palm oil in Singapore largely stems from industry associations and the finance sector. This is in line with global trends, where financial actors are seen as the key drivers to  shift company behaviour.

Analysis reveals that palm oil deforestation is down, but top deforesters are the usual culprits.

A report by Chain Reaction Research found that 38,000 hectares of deforestation occurred in Indonesia, Malaysia and Papua New Guinea last year, to make way for palm oil plantations. This is the lowest amount seen in 3 years, largely due to restricted travel and economic constriction in the face of COVID-19.
It was found that 58% of the deforestation occurred in palm oil concessions of 10 companies in Indonesia. Most of the companies in this year’s Top 10 list similarly cleared the largest amounts of forests in 2019 and 2018. They are also linked to global brands that have public No Peat, No Deforestation and No Exploitation (NDPE) policies.

The report also warns that 2021 could see an increase in palm oil driven deforestation due to an increase in local demand and palm oil prices.  

How is palm oil linked to flooding in Indonesia?

In 2021, the north-east monsoon surge caused a rainy start of the year to Singapore and even flash flood warnings. Indonesia also found themselves in the same situation, with South Kalimantan experiencing the worst flood in 50 years.

Although the monsoon season has brought an increase in rainfall,  environmentalists have argued that other factors, such as rapid deforestation in the region, have contributed to the severe flooding. Deforestation of rainforests have made way for various crop plantations, such as oil palm plantations, mixed fruit plantations and rubber trees. The deforestation in the region can also be attributed to coal mining. Although there is no one clear culprit, analysis showed that all areas studied underwent massive deforestation between 2000 to 2016.

The reduced plant cover has decreased the carrying capacity of the land to hold water. This is because the roots of trees mitigates soil erosion by anchoring surrounding soil in place, while also improving percolation into the ground. Deforestation and soil erosion has led to silting in rivers, and a higher tendency of flooding.

The increase in river sedimentation can also give way to other impacts – it can impact the marine ecosystem, clog canals and affect drinking water quality. The advantages of forests is increasingly clear, ranging from carbon sequestration to land  and water management, which is why companies need to act on zero deforestation guidelines.

Investigative report reveals palm oil from major traders compromises deforestation-free commitments of major global brands

“A new Eyes on the Forest (EoF) report reveals how palm oil illegally grown inside a national park and surrounding areas in Sumatra – home to elephants and tigers – appears to enter the supply chains of the biggest palm oil producers and traders operating in Indonesia, compromising their deforestation-free pledges and those of their customers.”

As announced by WWF-SG.

SMEs can afford to switch to sustainable palm oil – why don’t they?

“To join or not to join? Singapore businesses explain why they took the plunge, urging SMEs to weigh the small cost of switching to sustainable palm oil against the high price of not doing so.”

As reported by Eco-Business

17 F&B businesses in Singapore commit to sourcing for sustainable palm oil.

“Singapore has been free from the scourge of haze for the past two years, but at least 17 food and beverage companies here are not taking the clear skies for granted.”

As reported by The Straits Times Online

See other news coverage of the 26 Feb 2018 event, “Recognition of SASPO’s Commitments to Sustainable Palm Oil” on Business Chief Asia, Channel News Asia Online, Toggle (Channel 5), Toggle (Singapore Tonight).

And in other languages:
Bahasa Melayu: Berita Mediacorp and Toggle (Suria Berita)
Mandarin: Channel 8 News Online and Lianhe Zaobao Online
French: Le Petit Journal Online