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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 18, 2017
New evidence has emerged that Malaysian-based agri-business, Felda Global Ventures (FGV) (USD 1.7 billion market cap), continues to clear peat forest, contrary to its policies and industry standards, on its PT Temila Agro Abadi (PT TAA) plantation in West Kalimantan, Indonesia.
FGV is violating its own sustainability policy, adopted in August 2016 by its Board of Directors. FGV’s deforestation is also directly in violation of RSPO’s Principles and Criteria.
FGV’s deforestation pose material risk to its current commercial and business relationships. The majority of FGV’s customers, including Unilever, Wilmar, IOI, Musim Mas, Sime Darby, and KLK, have No Deforestation No Peat No Exploitation (NDPE) policies.
Satellite and Drone Images Show Ongoing Deforestation
As seen below in Figure 1, Chain Reaction Research-partner Aidenvironment’s satellite imagery shows that FGV’s subsidiary PT TAA continues to clear forest and peatland. The total cleared area since 2016 is 1,612 ha of mostly peat forest. This cleared land includes High Conservation Value (HCV) areas. Since FGV announced its new policy, it has cleared 864 ha of mostly forested peatland.
Figure 1: Satellite images of PT TAA’s concession
Aidenvironment commissioned a drone fly-over on location April 12, 2017 of the PT TAA concession.
You can view the video here.
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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.