Responsible Investment

ESG in Fixed Income

Palm oil production has serious social and environmental impacts.
Mai 2019

Nina Roth

Director, Analyst, Responsible Investment

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Risk Disclaimer

The value of investments and any income derived from them can go down as well as up as a result of market or currency movements and investors may not get back the original amount invested.

Views and opinions have been arrived at by BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

Palm oil production has serious social and environmental impacts. We consider how the Roundtable on Sustainable Palm Oil is addressing these issues.

Around 66 million tonnes of palm oil are produced annually, with more than 50% coming from Indonesia and more than 30% from Malaysia1. Its production has serious social and environmental impacts, ranging from local air pollution to human and labour rights.

Concerns about the sustainability of palm oil production are nothing new. For many years now, investors have contributed their voice to political and public pressure to bring stronger environmental standards to the production of this commonly used food ingredient. But heightened attention to climate change and biodiversity, political pressure in the EU and US, and concerns about the effectiveness of existing initiatives are further increasing the pressure.

The Roundtable on Sustainable Palm Oil (RSPO) has been a key initiative to improve the sustainability of the industry – but it has not been without its critics. Here we recap some of the challenges it faces, and recent developments in the RSPO’s remit that seek to address these, as well as set out our engagement with companies on the issue.

1In the mid-1990s the number was at around 15 million tonnes per year
 

Risk Disclaimer

The value of investments and any income derived from them can go down as well as up as a result of market or currency movements and investors may not get back the original amount invested.

Views and opinions have been arrived at by BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

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