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