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April 6, 2017
Grupo Palmas, including Palmas del Espino and subsidiaries, is specialized in the cultivation and processing of palm oil in the Peruvian Amazon. Grupo Palmas is 100 percent owned by the Peruvian conglomerate Grupo Romero. Grupo Palmas is Peru’s largest producer, refiner and exporter of palm oil.
After past controversies, Grupo Palmas is now shifting to a zero-deforestation approach. On April 4, 2017 Grupo Palmas published its No Deforestation, No Peat, No Exploitation (NDPE) policy that covers palm oil and cocoa. This creates new business opportunities, while also stranding its past expansion plans. These undeveloped concessions would be financially risky to develop.
April 27, 2017
PepsiCo Faces Supply Chain Risks From Conflict Palm Oil
Figure: Activists on Monday delivered their demand by draping a massive “Cut Conflict Palm Oil” banner from New York City’s iconic, six-story-tall “Pepsi-Cola” sign.
PepsiCo – the largest globally distributed snack food company – came under pressure today because of its sourcing and business relationships with high risk actors in the palm oil sector in SE Asia and Central America. PepsiCo’s risky relationships include:
- Possible sourcing relationships to Reforestadora de Palma de Petén SA (REPSA), a l palm oil company purportedly involved in the killing of Guatemalan Indigenous rights activist Rigoberto Lima Choc on September 18, 2015, kidnapping of three others, Hermelindo Asij Mo, Lorenzo Pérez Mendoza and Manuel Perez Ordoñez and ongoing intimidation of human rights defenders.
- Relationships with Indofood Agri Resources. A report in early 2017 by Chain Reaction Research suggested that 42 percent of Indofood Agri Resources’ 549,287 hectares landbank is contested. In fact: Six plantations allegedly have community conflicts and labor controversies. Four plantations are located on peat and/or forest areas, potentially prohibited from development given Indonesian government regulations. 16 plantations do not publish concession maps.
- Major palm oil traders Cargill, Wilmar and AAK involved in sourcing from palm oil plantations are threatening the future survival of the Leuser Ecosystem – the last place on Earth where orangutans, tigers, rhinos, elephants and sunbears still coexist in the wild.
PepsiCo’s global suppliers are selling PepsiCo material risks that PepsiCo’s investors may now own.
Clients Ask TIAA to Manage its Agriculture Investment Risks
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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.