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TH Plantations and PT Synergy Oil Nusantara: Leakage Risks At Plantation and Refinery

April 17, 2018

Lembaga Tabung Haji is a Malaysian Islamic financial institution, with over USD 16 billion in assets under management. TH Plantations (THP) is Lembaga Tabung Haji’s publicly traded palm oil arm, with 32 palm oil plantations in Malaysia and Indonesia. It has a total landbank of 102,000 ha, of which 61,104 ha is planted. The company is also a joint venture partner in PT Synergy Oil Nusantara (PT SON), a large palm oil refinery at the port of Batam, Riau, Indonesia. This facility has a capacity of 1 million tons per year. It is one of the largest ‘leakage’ refineries in SE Asia.

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The Chain: Norwegian Government Pension Fund’s Soy Company Exclusion Linked to Deforestation, No Longer Invested in SLC Agrícola

March 14, 2018

The Norwegian Government Pension Fund has slowly ramped up its response to deforestation concerns within its portfolio. The Fund has a history of addressing risks in sectors and companies that it considers prone to long-term risks. This included companies that face elevated risks from environmental, social, and governance (ESG) issues. Between 2012 and 2015, the Fund dropped investments in 29 palm oil companies. In 2016, this focus expanded to included pulp and paper, leading to a decision to exclude four additional pulp and paper companies from the Fund’s portfolio that year. The Fund’s 2017 annual report stated that for the first time, the Fund excluded a soy company due to deforestation, suggesting continued concern over risks in the forest sector.

The Fund’s decision is an important signal that institutional investors have a growing awareness of risks due to ESG concerns in the forest commodity section. Large discrepancies between soy growers and their investors and financiers could lead to more expensive financing and shrinking customer bases for companies that fail to adopt strong ESG policies.

In Q4 2017, the Norwegian Government Pension Fund sold its position in SLC Agrícola, unwinding its USD 26.9 million equity position. The Fund first initiated its investment in SLC Agrícola in Q4 2012 with a position valued at USD 30.5 million. Since then, its position has fluctuated from a low of USD 6.3 million in Q4 2014 to a high of USD 35.4 million in Q4 2015 before being closed out in Q4 2017. As per its long-term policy regarding any investment decision, the Fund gave no public justification for this sales decision.

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About Us


Chain Reaction Research conducts sustainability risk analysis for financial analysts and investors. Our special focus is on sectors that deal with environmentally intensive commodities, especially those sourced from tropical regions like palm oil, and pulp and paper.<

We explore whether unsustainable corporate practices and actions have introduced unreported risks – and how or whether sustainability leadership can mitigate those risks and possibly provide competitive advantage. Where possible, we provide pre-IPO checking of claims about risk and assets reported in prospectuses. We also review claims made by publicly traded companies.

Chain Reaction Research has received support, in part, from the David and Lucille Packard Foundation, and from the International Climate and Forest Initiative (NICFI) scheme managed by the Norwegian Agency for Development Cooperation (Norad). Chain Reaction Research statements and materials do not necessarily reflect the standpoints of the Packard Foundation or Norad.


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