Five palm oil companies defying sustainability trends

Palm Fields

In this report, Sarah Lake and Matt Piotrowski look at five companies — Batu Kawan, Astra Agro Lestari, IJM Plantations, Indofood Agri, and Anglo Eastern Plantations — that have not taken the step toward greater transparency and sustainability by joining or complying with the Roundtable on Sustainable Palm Oil (RSPO), an industry certification body. 

Key findings

Harmful effects: Despite a recent decline in deforestation, palm oil companies operating in Southeast Asia have ongoing links to land clearing, biodiversity destruction, and labor violations. 

Fiscal motivation: Non-certified palm oil growers have taken major financial hits likely linked to sustainability issues and are significantly underperforming compared to their peers that sell certified palm oil. 

Bad connections: These laggards that are not certified are less susceptible to change because they have dominant investors that are majority shareholders.

Financial responsibility: Western asset managers that own shares in non-certified companies could send strong signals to the companies and the industry through engagement and divestment over deforestation risks 

System loopholes: Even though major buyers have cut off non-certified growers, they can still sell unsustainable palm oil through other outlets. 

This report was developed as a pilot for Lucida’s initial research into palm oil producers and financiers to inform the ongoing work of the initiative.

Matt Piotrowski
Matt Piotrowski is the Director of Policy and Research at Climate Advisers and for the Lucida initiative, focusing on communication outreach with the financial sector, managing and editing the Chain Reaction Research newsletter, and providing analysis for investors to mitigate climate risks.
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