South Korean Companies Have Outsized Impact on Palm Oil Leakage Market

This report discusses the role of South Korean companies in the worldwide palm oil market and the country’s position as an owner of oil palm concessions, a buyer of palm oil products, and a financier of palm oil operations. The analysis highlights the country’s role in the palm oil “leakage market,” which trades unsustainable palm …

The Chain: Financial, Political Decision-Makers Accelerate Construction of Information Toolkit on Deforestation

Companies and their financiers are exposed to a variety of financial risks when linked to deforestation, ranging from reputational damage to reduced market access. Of the companies that disclosed information on involvement with forest-risk commodities in CDP’s 2018 survey, two-thirds conducted risk assessments of forest-related issues and 92 percent of risk assessments identified substantive business …

The Chain: NGO Warns Banks, Investment Firms on Continued Financing of Indofood

The Rainforest Action Network (RAN) has sent letters to the heads of major financial institutions that may be involved in a USD 2 billion syndicated loan for Indofood CBP, a subsidiary of Indofood Sukses Makmur (Indofood). RAN’s letters are an effort to put a spotlight on the continued financing of Indofood and its subsidiaries despite …

The Chain: P&G Shareholders Overwhelmingly Pass a Deforestation-Related Resolution to Mitigate Material Financial Risk

In an unprecedented move, BlackRock voted in favor of a shareholder resolution requesting an assessment report to identify further opportunities to combat deforestation and degradation of intact forests in Proctor & Gamble (P&G) supply chains. BlackRock, State Street, and Vanguard, the “Big Three” asset managers, have a combined USD 62 billion in P&G stakes (as …

The Chain: Public Protests, Financier Concerns Follow Passing of Indonesia’s Omnibus Law

On October 5, 2020, the Indonesian House of Representatives and executive branch passed a controversial omnibus law. Intended to foster economic investment, the law has generated protests within Indonesia and international condemnation. Concern has focused on the weakening of environmental and labor standards. The omnibus law, which amends 79 existing laws and removes thousands of …

The Chain: Spike in Fire Alerts Within Sourcing Regions of Top Brazilian Meatpackers Increases Investor Risk

As fire alerts increased sharply in Brazil this summer, investors in key Brazilian meatpackers are seeing their risks grow. Even though four-fifths of Brazilian beef is consumed domestically, Brazil still remains the largest beef exporter globally. Furthermore, the top three Brazilian meatpackers, JBS, Marfrig Global Foods, and Minerva, are responsible for over 60 percent of …

The Chain: FGV Banned from Selling Products to the United States Due to Ongoing Labor Issues, Increasing Reputation Risk

On September 30, 2020, the U.S. Customs and Border Protection (CBP) issued a Withhold Release Order (WRO) on palm oil products produced by Malaysian Felda Global Ventures (FGV) over concerns of alleged forced labor issues. FGV is a Bursa Malaysia-listed palm oil company with plantations, milling, and refining facilities. The WRO also covers its joint …

The Chain: Sarawak State Government to Purchase TH Plantations’ Sarawak Concessions, but NDPE Supply Chain Not Guaranteed

The head of government in the Malaysian state of Sarawak, Abang Johari Openg, told delegates at a conference in Thailand on September 26 that the Sarawak government will acquire all oil palm plantations belonging to Tabung Haji and its subsidiary TH Plantations. Negotiations between the state government and TH Plantations are in the final stages, …

Update: United Malacca’s 60,000-Hectare Industrial Tree Plantation Development Risks Market Access, Raises Questions About Scope of NDPE Policy Implementation

This Chain was updated on September 28 based on the latest from United Malacca, which had planned on proceeding with the development of a 60,000-hectare industrial tree plantation in Sulawesi despite market risks. United Malacca has now issued a stop work order on the concession, PT Wana Rindang Lestari. In an announcement made on the …

The Chain: Mondelēz International Follows Unilever in Palm Oil Monitoring, but Still More Than 80 percent of FMCGs Lag on Execution

In early September 2020, Mondelēz International announced enhanced traceability of its palm oil sourcing policy, including independent verification. This action followed Unilever’s June 2020 announcement of its extra measures to help transform the palm oil industry. These developments have occurred against the background of the Consumer Goods Forum (CGF) targeting of zero-deforestation in 2020, Fast-Moving …