Left: Dan Strechay, U.S. Representative, RSPO, Green Century Shareholder Advocate Jessye Waxman, and Wathshlah Naidu, senior manager – grievance, RSPO, at the RSPO conference, in November 2018, in Kota Kinabalu, Sabah, Malaysia.
This is the fourth post in a four-part series about Shareholder Advocate Jessye Waxman’s recent trip to Southeast Asia to press companies to end deforestation in the region. If you missed the previous posts, you can find them here: How Green Century Does Shareholder Advocacy – Tropical Forest Protection in Indonesia and Malaysia, How Green Century Does Shareholder Advocacy – Financing Sustainable Palm Oil in Indonesia and Malaysia, and How Green Century Does Shareholder Advocacy – Engaging Indonesian and Malaysian Palm Oil Producers.
In Malaysia, I attended the 15th Annual General Assembly of the Roundtable on Sustainable Palm Oil (RSPO), the world’s largest third-party certifier for sustainable palm oil. It was an important meeting as the RSPO was poised to consider enhanced certification standards.
Every five years, the public is given the opportunity to weigh in on what the future standards for sustainable palm oil production should be, as the RSPO’s Principles & Criteria (aka the certification standards) are reevaluated and revised.
Many companies that buy or trade palm oil rely on the RSPO certification of their suppliers to meet their own no deforestation commitments. In the last five years, however, many of these same companies adopted No Deforestation, No Peat, No Exploitation (NDPE) policies – commitments that require palm oil producers not to deforest, develop plantations on peatlands, or exploit their labor force – that went well beyond what was required for an RSPO certification.
For Green Century, it was clear that if the RSPO was going to remain an effective and reliable certifier of sustainability, it had to strengthen its standards. So, in March 2018, we mobilized investors for the second time to call on the RSPO to strengthen its standards. We first called on the RSPO to strengthen its standards for certifying the sustainable production of palm oil in 2015.
Green Century, nongovernmental organizations (NGOs), industry experts, and several major companies attended a Principles and Criteria (P&C) revision workshop, hosted by the RSPO in July 2018. The workshop consisted of several hours of collaborative discussion in which we represented investor concerns and demands.
We also submitted extensive comments to the 2018 P&C review and organized global investors, representing $6.7 trillion in assets under management, to support a letter urging the RSPO to adopt the following elements:
- Protect High Carbon Stock forests and peatlands,
- Offer revised guidance on phasing out development and replanting on peat soils,
- Require the disclosure of concession maps (maps of who owns what plots of land), and
- Enact a variety of measures to protect human rights, including banning the use of paraquat (a toxic chemical used as an herbicide).
In October 2018, the RSPO issued its draft revised P&C, which incorporated the majority of the suggestions highlighted in the investor letter we sent.
At the Annual Meeting, all the RSPO members, including NGOs, financial institutions, and palm oil growers, traders, and users had the opportunity to vote on whether to adopt the new, more stringent standards.
Thankfully, the RSPO ratified and adopted the enhanced certification standards. The updated P&C include several new elements, including the adoption of a “no deforestation through the implementation of the High Carbon Stock Approach” methodology, which uses satellite data and ground survey measurements to stratify the vegetation in an area of land into six different classes to better protect the areas with the most stored carbon.
The new standards are effective immediately, but existing RSPO grower members were granted a one-year transition period.
Green Century’s unparalleled shareholder advocacy
By the end of the RSPO annual meeting, I was more than ready to return home. It was a tiring week, but it also was very important that American investors continue to press the case to palm oil producers and banks in Indonesia and Malaysia, which produce 85% of the world’s palm oil, that the destruction of tropical forests and peatland must end.
This sort of on-the-ground shareholder advocacy is unique to Green Century. Most other mutual funds simply do not have in-house shareholder advocates who directly press corporations to improve their environmental practices.
Of course, a desire to make real impacts on corporate sustainability and the environment is exactly why I joined Green Century in the first place. It’s also why I remain willing to trot off halfway across the world to make the case for improved corporate environmental practices.
The need to end deforestation is too imperative, and too integral to the effort to stave off climate change, to remain idle – and that goes for one’s investments, too. So, I appreciate all of the investors, intent on making an impact with their investments with Green Century, who make my work possible.
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