Palm oil companies in Indonesia, the world’s top producer of the commodity, cleared 30,000 hectares (about 74,100 acres) of forest last year to make way for plantations, up from 22,000 hectares (54,400 acres) in 2022. These increases mark the end of a declining trend that began after the record 227,000 hectares (561,000 acres) — an area nearly twice the size of Los Angeles — of deforestation in 2012.

France-based TheTreeMap used plantation concession data from Greenpeace to identify 53 companies behind the plantation expansion and resulting deforestation, of which 20 had cleared carbon-rich peatlands.

The single biggest deforester was the company Ciliandry Anky Abadi (CAA), whose three subsidiaries deforested 2,302 hectares (5,688 acres) across their concessions.

A recent investigation by The Gecko Project has linked CAA to Indonesian conglomerate First Resources, a member of the Roundtable on Sustainable Palm Oil (RSPO), the world’s largest association for ethical palm oil production. The investigation alleges that First Resources used “shadow companies” to circumvent sustainability standards while still presenting an image of environmental accountability as it adopted a zero-deforestation pledge in 2015.

According to the investigation, companies controlled by the group have cleared more than 95,000 hectares (235,000 acres) of forest since First Resources announced its zero-deforestation pledge.

TheTreeMap also identified deforestation in the concessions of a group of companies known as New Borneo Agri (NBA) or the Sulaidy Group, also allegedly linked to First Resources. These purported ties led to a complaint being lodged against First Resources at the RSPO in 2021.

In the latest development in the case, in January this year a coalition of Indonesian civil society organizations submitted further allegations against First Resources, using fresh evidence collected by The Gecko Project’s investigation.

“Documents obtained in the course of The Gecko Project’s investigation provide strong evidence that First Resources Ltd. is in breach of the current RSPO Group Membership rules which require the compulsory registration of corporate groups under one membership,” the coalition said.

The ongoing complaint against First Resources is the first to test the robustness of the 2020 RSPO Membership Rules, and is still in the deliberation phase, which means a formal investigation hasn’t yet commenced.

“It is hoped the new evidence will be considered by the Independent Investigator in their forthcoming investigation,” the CSOs said.

First Resources has denied operating any shadow companies.

“It is pivotal for us to highlight factual inaccuracies in the report, and we would like to state that First Resources does not have any ownership stake or hold any management roles in CAA and NBA/Sulaidy Group,” the company told Mongabay in an email.

“First Resources has not purchased any palm oil products from CAA and NBA/Sulaidy Group, and will not buy from any company that is not in compliance with our Policy on Sustainable Palm Oil. Therefore, First Resources cannot be held accountable for the actions or inactions of CAA or NBA/Sulaidy Group.”

Responding to the multiple complaints at the RSPO, First Resources said it remains fully cooperative throughout the process.

“Furthermore, it is crucial to convey to our stakeholders that this process will now undergo an independent investigation,” the company said. “This step is taken to ensure a thorough, fair, and unbiased examination of the matter at hand. Thus, First Resources kindly request all parties to respect the ongoing process and await the result before drawing conclusions or making any claims.”

A fifth of total national emissions

Zero-deforestation pledges like those made by First Resources have been credited with the decade-long decline in deforestation driven by oil palm plantations. Known in the industry as NDPE policies, for “no deforestation, no peat, no exploitation,” they’ve been widely adopted by producers, traders and consumers of palm oil following public pressure and campaigns by environmental NGOs and consumer groups.

Historically, deforestation for plantations in Indonesia was concentrated on the island of Sumatra, which today is the country’s palm oil heartland. But the surge in deforestation in the past two years has been mostly on the islands of Indonesian Borneo and Papua.

Crucially, a third of the 2023 deforestation, 10,787 hectares (26,655 acres), occurred on peatlands, a carbon-rich landscape that, when cleared and drained, becomes highly susceptible to fires. These can burn for weeks on end, fueled by the combustible peat soil, releasing vast volumes of greenhouse gases in the process.

Data from the Center for International Forestry Research (CIFOR) show that oil palm plantations were the largest contributor to deforestation in Indonesia between 2021 and 2022, resulting in annual GHG emissions of 200 million metric ton.

Indonesia’s total emissions for 2022, not including from the land-use sector that covers plantations, was 1,240 million metric ton, a record high, according to data from the European Commission.

“So emissions from the palm oil [industry] is around a fifth of Indonesia’s emissions,” said Herry Purnomo, CIFOR senior scientist and deputy country director.

He said the challenge that the industry faces at the moment is how to reduce its emissions through protecting forests while at the same time developing the economy of palm oil-producing regions in Indonesia. To start tackling this question, CIFOR has developed a platform called the Simulation of Indonesian Palm Oil Sustainability (SIPOS), which allows users to assess the trade-off between economic development, emissions reductions, and social benefits.

The platform can calculate the amount of emissions produced by the plantation industry, and the increase in emissions for a given increase in production output and income for smallholder farmers. The identified increase in emissions can then be offset or even reduced through various interventions, such as a moratorium on peat and forest clearance, boosting the productivity of smallholders, or buying carbon credits.

EU deforestation regulation

Beni Okarda, a senior research officer at CIFOR, said that the SIPOS platform could also be used by stakeholders to measure the impact of the European Union regulation on deforestation-free products, also known as the EUDR.

The recently adopted law bans imports into the EU of agricultural products that come from deforestation and illegal sources, with the aim of ensuring that products consumed within the EU market aren’t contributing to deforestation or forest degradation anywhere in the world since 2020.

The law applies to seven commodities — beef, cocoa, coffee, palm oil, rubber, soy and wood — and the producers and traders of these commodities have to carry out due diligence throughout their supply chains before being allowed to trade these products in the EU market.

In Indonesia, there are concerns that the regulation will disproportionately affect smallholder oil palm farmers, who account for a significant share of the country’s total palm oil production. Abetnego Tarigan, the deputy for human development in the office of the president’s chief of staff, cited government data showing that 15.7 million independent smallholders would have their livelihoods affected by the EUDR.

CIFOR’s Herry said Indonesia could actually benefit from the EUDR, but only if the country addresses the issues still plaguing the industry, such as illegal plantations in forest areas and the ongoing rate of deforestation. He noted that the cutoff date of 2020 makes it easy for Indonesia to comply, given that only 1% of oil palm production in Indonesia since then has taken place on deforested land, according to CIFOR data. This compares with 14% since 2010, and 54% from 1995 to 2000.

“We can achieve sustainable palm oil,” Herry said. “It’s OK to still have lots of work to do, seeing as how other countries aren’t much better than us [on sustainable palm oil]. So we have to be confident since we have achieved a lot, such as declining deforestation.”

This story first appeared on Mongabay. Read the original article here.

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Deforestation levels are down a dramatic 55.8% from 2022 to 2023, according to the Monitoring of the Andean Amazon Project (MAAP). The largest declines occurred in the Brazilian-controlled part of the jungle, which dropped 59%, and in Colombia, which plunged 67%. Peru’s forest loss dropped 37%. “Compared to the peak year of 2020, forest loss has dropped by over two-thirds, or 67.7%,” MAAP said in a press release.

The political backdrop is impossible to ignore. President Luiz Inácio “Lula” da Silva, Brazil’s left-wing leader, has been rehabilitating the country’s environmental reputation after the tenure of Jair Bolsonaro, who created the conditions for open season on forest districts. Colombia’s president, Gustavo Petro, has also made the energy transition and environmental protection a cornerstone of his mandate.

The eight Amazon nations that gathered for a summit in Belém, Brazil, in August agreed to adopt more aggressive conservation methods, although they fell short of committing to stop deforestation altogether. Brazil has the largest share of the Amazon, with 60% stretching out across its territory.

An estimated 20% of the Amazon has already been cut down, driven largely by aggressive agricultural expansion, illegal mining, logging and fires. A record-setting drought this year has also primed the Amazon for forest fires, in particular in the swaths that have degraded and are in poorer health, which amounts to 40% of its surface.

Agriculture is a particular threat to the preservation of crucial carbon-capturing forest stocks around the world. In Brazil, the area occupied by agriculture grew 50% between 1985 and 2022, according to MapBiomas, gobbling up 95.1 million hectares. Much of that growth occurred in the Amazon. In its latest report card on corporate deforestation, the non-profit Ceres assessed 53 major companies, including Cargill and Procter & Gamble, facing “the greatest risks” from sourcing soy, timber and palm oil. “Most of them lack robust no-deforestation policies, despite recognizing the importance of deforestation action,” Ceres reports. Adidas and Amazon got failing grades.

U.S. food giant Cargill announced in November that it would speed up its promise to eliminate deforestation and land conversion from its supply chain of key crops, including soy, corn, wheat and cotton, in Brazil, Argentina and Uruguay. The company had already pledged to produce deforestation-free commodities and conversion-free soy across South America by 2030 but now says it will do so by 2025 in those three countries.

Mighty Earth, a global environmental advocacy organization, called Cargill’s announcement “important but incomplete,”  noting that it is one of the “top drivers of ecosystem destruction in Latin America.”

“Bolivia experienced a 32% increase in primary forest loss between 2021 and 2022 – four times the rate of Brazil. This is, in part, due to Cargill’s continued willingness to buy from suppliers engaged in deforestation,” Mighty Earth CEO Glenn Hurowitz wrote in November. “We’re calling on Cargill – along with the signatories of the COP27 Agribusiness Roadmap – to agree to a cut off date of 2020 to ensure this incomplete policy does not spark a ‘race to bulldoze’ in biomes such as the Grand Chaco and the Chiquitano ahead of 2025.”

The post Some light in a dark climate year: Amazon deforestation is down 56% appeared first on Corporate Knights.

The move is the latest fallout from a 2022 report published by Walhi, Indonesia’s largest environmental NGO, and Friends of the Earth U.S., which says three AAL subsidiaries engaged in land grabbing, environmental degradation, and the criminal persecution of environmental and human rights defenders.

According to the report, the subsidiaries — PT Mamuang, PT Agro Nusa Abadi (ANA) and PT Lestari Tani Teladan — claim or occupy more than 6,700 hectares (16,700 acres) of land without having obtained the free, prior and informed consent (FPIC) of local communities on the island of Sulawesi. It also alleges that they failed to dispose of waste properly, and exacerbated flooding by clearing forests in water catchment areas.

The Central Sulawesi chapter of Walhi recorded at least 10 people facing criminal charges brought by the companies — most for allegedly stealing oil palm fruit, occupying land without a permit, and making threats.

In addition, the report says one of the companies, ANA, didn’t have one of the permits required to start planting. It also questions whether any of the companies received the full slate of permits to operate legally.

AAL media and public relations manager Mochamad Husni denied the allegations, saying the company and its subsidiaries have all the necessary permits, obtained through the proper procedures.

That hasn’t been convincing enough for 10 of AAL’s major buyers, of which Kellogg’s is the latest. Prior to the Pop-Tarts maker freezing its purchases, others that had done likewise were PepsiCo, FrieslandCampina, Danone, Hershey’s, Nestlé, Procter & Gamble, Mondelēz, Colgate-Palmolive, and L’Oréal.

In addition to backlash from buyers, AAL also faces pressure from shareholders. BlackRock, the world’s largest asset manager, voted against the election of AAL’s board of directors at the company’s annual shareholder meeting in April over the ongoing violations.

Walhi has called on AAL to carry out environmental restoration and provide remedy for the harm done to Indigenous and local communities.

“We echo the calls of communities impacted by AAL’s destructive operations for AAL to return land taken without consent,” said Uli Arta Siagian, the forest and plantation campaign manager at Walhi. “Companies that violate human rights, operate outside of Indonesian law, and pollute our precious environment must right their wrongs.”

AAL hasn’t taken immediate action, instead launching an independent investigation into the allegations raised in the report. The investigating team, led by Indonesian environmental consultancy EcoNusantara, recently completed its on-the-ground verification work, including confirming evidence of the grievances raised.

Local communities have largely been responsive and cooperative, according to the team, although there was also some reluctance to engage. The team says it’s now reviewing and analyzing the collected data.

Activists have criticized the investigation, calling it flawed from the start because it focuses on the communities’ legal rights rather than the AAL subsidiaries’ legal standing and social license to operate. It requires communities to prove all their claims with legal evidence, regardless of their customary claims and rights to the land, which in Indonesia is a complex issue.

The terms of reference for the investigation also suggests the communities were previously landless and now want land owned by the AAL subsidiaries, further cementing the notion that the company has the right to the land. The burden of proof is put on the communities because AAL failed to consult the affected communities in the development of the terms of reference, activists say.

They also say the investigation isn’t needed in the first place as there’s already enough evidence from published reports, community members’ testimonies, court hearings related to criminalization of community leaders, and farmers’ certificates of land ownership that show how AAL is culpable and thus must take concrete steps to redress the grievances and remedy the harm.

But if AAL is to proceed with the investigation, then the onus of proof should be put on the company, said Gaurav Madan, senior forests and lands campaigner at Friends of the Earth U.S.

“The company should show evidence that it received communities’ free prior informed consent to operate on their lands and impact their livelihoods,” he said. “AAL’s subsidiaries should present each one of the permits required to operate by Indonesian law.”

Consumer goods brands that continue to source their palm oil from AAL and investors in the company also need to step up by demanding the company show legal evidence of its operations in Sulawesi, Madan said.

“Why aren’t consumer brands asking to see this documentation?” he said. “It’s their responsibility to conduct this type of independent due diligence, especially when violations have been brought to their attention.”

Without holding companies like AAL accountable, consumer goods companies’ claims of being sustainable are just empty rhetoric, said Danielle van Oijen, forest program coordinator at Dutch environmental NGO Milieudefensie.

They will also have a hard time complying with the new European regulation on deforestation, which requires companies selling products in the EU market to conduct due diligence to eliminate deforestation and human rights abuses from their supply chains.

“Consumer goods companies continue to claim their business models are ‘sustainable’ while continuing to source from conflict palm oil companies like AAL,” van Oijen said. “Instead of greenwashing, these multi-billion dollar companies should use their public platforms to ensure AAL remedies the harm it has done to impacted communities and the environment.”

This story was originally published by Mongabay.com. Read the original story here.

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The Corporate Knights Dark Red Flag Database consists of more than 2,500 companies from developed and emerging economies that have been identified as so-called ‘red flag companies’ due to their involvement in ethically or environmentally questionable industries and/or practices. These companies have been identified through a rigorous process including theme selection, source reliability analysis, and company identification processes. The list is updated monthly to reflect changes in source material. Sources include methodologically-sound reports by non-profits, bottom-up research by Corporate Knights, and the public and derived exclusions of two significant funds (Norges Bank Investment Management and NZ Super Fund).

The dark red flag themes are as following: Access to medicine laggards; Access to nutrition laggards; Adult entertainment; Blocking climate policy; Cement carbon laggards; Civilian firearms; Controversial weapons; Conventional weapons; Deforestation & Palm oil laggards; Energy (Fossil Fuels); Farm animal welfare laggards; For-profit prisons; Gambling; Gross corruption violations; Harmful pesticides; Illegal activity; Oil sands laggards; Severe environmental damage; Severe human rights violations; Thermal coal; and Tobacco.

In addition to the dark red flags, Corporate Knights also maintains a database of “light red flag” companies for the following themes: Alcohol; Blocking climate resolutions; Financing misleading media; Industrial meat; and Nuclear energy.

Please e-mail research@corporateknights.com for more information.

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The word “Kimadi,” says tribe spokesperson Matheu Lawun, is a word encapsulating three clans – the Matev, Dibaren and Kimbu – which make up a community of about 400 people living 80 kilometres north of the town of Madang. Lawun describes how the clans have lived there since time immemorial – gardening, hunting and relying upon the sacred forest “for building purposes, for our drugs and, during droughts when food is low, we look to the forest for food. There is bread fruit, wild yam and nuts like aila (chestnuts) and walnuts,” says Lawun, a lean 51-year-old Matev-clan member. And, if water supplies run low, the cane rattan vine provides copious amounts of water accessed by cutting a section of the vine and pouring out the refreshing liquid, he adds.

The forest is also a source of health and wellbeing. If someone contracts malaria, which is endemic to much of the country, a tea made from the bark and leaves of the Alstonia scholaris evergreen is drunk as medicine. Other tree brews assuage gastrointestinal upsets, while some plants act as analgesics or antiseptics, staunch blood flow and even provide birth control, says Kimadi tribal member Anna Tome.

Two Papua New Guinean women row out to an anchored tuna fishing trawler to sell the workers fruits like coconut, banana and pineapples that are grown in their forest gardens. Photos by Tallulah Photography.

Signs that the Kimadi’s subsistence lifestyle is under threat first appeared last July when Malaysian company Woodbank Pacific began logging about 10 kilometres upstream. Roads were cut into the steep, hilly wilderness to allow logging-truck access. Then, clear cutting began of softwood and hardwood trees, such as the kwila, which grows up to 50 metres high and is used in a variety of products, from furniture and musical instruments to building bridges. But the loggers were cavalier as they felled these forest giants, letting some logs fall into the waterways and leaving them to rot, contaminating the water flowing downstream to where the Kimadi villagers live, says Lawun. “All the communities downstream are being affected.”

This past February, members of the Kimadi tribe were shocked to find signs posted in their traditional territory by Woodbank Pacific. The signs stated that parts of their land were a “no-go zone,” says Lawun. Two of the clans, the Dibaren and Matev, responded with a letter opposing all logging and surveying operations on their territory. The letter concluded by stating that refusing to comply could result in a delay in operations and possible legal action. If the letter is ignored, says Lawun darkly, “we will go and burn one of their logging vehicles.”

Members of the Kimadi tribe were shocked to find signs posted in their traditional territory by Woodbank Pacific.The signs stated that parts of their land were a “no-go zone.”

 

The Kimadi have reason to be worried about the pernicious ubiquity of logging in their home province. In 2010, Madang province had 2,000,000 hectares of tree cover extending over 76% of its land area. In 2017 alone, it lost 15,900 hectares of tree cover, Global Forest Watch reported.

Ancestral occupation of land

Papua New Guinea, one of the world’s most culturally diverse nations, consists of 19 provinces and the National Capital District. Its population speaks upwards of 850 languages, with each dialect representing a distinct cultural group. These communities, no matter their isolation, hold something as dear as the land that gives them life: Papua New Guinea’s unique system of landownership called “customary tenure.” It gives land resource management to clans, tribes or communities based upon ancestral occupation of the territory where they live. Customary landowners have the freedom to sell their land, lease it or enter into agreements with companies that will generate income in order to pay for infrastructure projects such as schools, health centres, water and electricity services, roads and ports, according to Making Land Work, published by the Australian Agency for International Development.

The Kimadi’s troubles are a microcosm of the impact of development in Papua New Guinea, an ecological gem just north of Australia in Oceania that, while only half the size of Ontario, has some of the richest biodiversity and unique flora and fauna in the world. Here are found tree kangaroos, carnivorous mice, birds of paradise, birdwing butterflies and more than 2,000 species of orchids. The nation, which gained its independence from Australia in 1975, is not only spectacularly beautiful but also resource rich, with significant gas and mineral deposits and abundant fishing grounds.

It is also home to the world’s third largest rainforest, which spans the neighbouring country of Indonesia, making it an important carbon sink and a producer of oxygen, as well as being home to 8.3 million Papua New Guineans, most leading a subsistence lifestyle. However, like rainforests around the world, which now cover just 6% of the Earth’s surface, PNG’s wilderness is being threatened not only by logging interests but mining and agricultural plantations, especially palm oil, found in cosmetics, processed foods, biofuels and pharmaceuticals, among other uses.

In PNG, the roots of the deforestation problem lie with Special Agriculture and Business Leases (SABLs), which have weakened Indigenous Papua New Guineans’ claims to customary landownership. Before the Land Act (1996) came into existence, about 97% of PNG was controlled by Indigenous peoples. However, provisions in the act enabled the state to lease land from customary owners, then re-lease it to private companies or individuals. According to Father Philip Gibbs, a professor and vice-president of research and higher degrees at Divine Word University in Madang, this “lease-leaseback scheme” has resulted in 10% of the country’s total land area ending up in private hands. The national and provincial governments of Papua New Guinea encouraged landowners to enter into the strategy, giving up their land, often based upon false promises of community enrichment or employment, Gibbs says.

Consumer demand high

Although Papua New Guinea seems a world away, and lost in time, the West is implicated in the ongoing destruction of its forest. Consumers, whether they live in the United States, Canada, the United Kingdom or the European Union, have a huge appetite for timber products – and manufacturing behemoth China is happy to meet this demand. According to the World Resources Institute, China is the largest importer of logs, which it processes then exports as timber products. In 2016, it imported logs from more than 100 countries, according to the United Nations’ Comtrade database.

Lela Stanley, the Washington-based senior policy advisor, Asia forests, for Global Witness, says the total 2018 export of logs from Papua New Guinea is greater than three million cubic metres, with more than 85% going to China via Malaysian logging companies. Studies by Global Witness and other NGOs indicate a significant percentage, “north of 70%” are illegal, “usually in violation of community land rights,” she says.

Countries like Canada and the U.S. have legislation trying to ensure that illegally sourced wood products are not sold to consumers. This means that retailers should “do everything they can to ensure their imports are legal,” says Stanley. This might involve interviewing a supplier, checking all documentation that declares the source of the products and even undertaking site visits. “But you can’t rely upon documents alone, so it’s really about being quite aggressive in checking your assumptions and cross-checking your suppliers for proof that what they are selling you is actually legal.” (The Canadian Association of Importers and Exporters as well as the Canada China Business Council declined comment while the Chinese embassy in Ottawa didn’t respond to requests for an interview.)

North of 70% of Papua New Guinea’s

logging exports are illegal and

“usually in violation of community land rights.”

The results of rampant logging and forest clearance are alarming on a world scale, since these once-pristine carbon sinks have been turned into sources of global emissions. Today, deforestation is responsible for 17% of annual greenhouse global emissions, says Stanley, of which tropical deforestation accounts for nearly half (8%). “That’s quite significant as tropical forests should be a carbon sink – not a source – which is why protecting them is such a critical issue, not just for communities in Papua New Guinea but the globe.”

Fighting to overturn leases

Peter Bosip is executive director of the Center for Environmental Law and Community Rights (CELCOR), a not-for-profit based in Papua New Guinea’s capital city of Port Moresby. CELCOR, which promotes and defends environmental and customary landowners’ rights, is trying to fight SABL leases. Since 2005, says Bosip, there have been 72 SABLs issued, with 27 found to be illegally acquired. This resulted in 5.2 million hectares, or 52,000 square kilometres, of land being logged or turned into oil palm plantation from 2005-2011, an area seven times larger than the Greater Toronto Area. “That’s huge,” he says. “We have been demanding the government take appropriate actions by cancelling all the SABLs and give the land back to customary landowners.”

Bosip explains how SABLs are illegally or clandestinely acquired by developers, most of them logging companies. Companies will connect with individuals who may or may not be members of a clan or tribe and strike a deal with them as representatives of the community. The government will then give its approval to the proposal. But when the developer goes to the area, to clear cut in order to plant palm oil, for example, “the majority of the land owners are taken by surprise.”

Members of the Kimadi tribe in Madang province are trying to stop a Malaysian logging company from cutting down trees on their traditional territory. Photos by Tallulah Photography

Bosip believes that many of these deals are facilitated by bribes. He points to widespread government corruption among government officials, a claim backed by Transparency International, which ranks Papua New Guinea 135 out of 180 countries on the Corruption Perceptions Index, comparable to nations like Russia. As a result, CELCOR has requested help from the United Nations Human Rights Office of the High Commissioner in Geneva. Since 2011, the commissioner has been sending letters to the PNG government expressing concern that SABLs “infringed Indigenous peoples’ rights.” The PNG government has consistently ignored the commissioner’s request for dialogue.

Another example of corruption, says Bosip, is the lack of taxes paid to the government by foreign companies. The companies declare a loss, despite exporting more and more logs every year. Although the companies pay royalties, taxes to the state are paid based on how much profit the firm admits to making. “They declare they are making zero or even negative profit.”

Such exploitation of PNG’s abundant resources, says Gibbs, leads to economic stagnation for much of the country, including a “steady decline in infrastructure and services in recent years, particularly in rural areas.” In 2018, the United Nations Development Programme placed PNG at 153 out of 189 countries on the Human Development Index, which measures basic human development achievements in a country.

There are worrisome developments ahead, says Bosip. In 2018, PNG announced its formal commitment to China’s $1 trillion-plus Belt and Road Initiative (BRI), an ambitious development strategy embracing 152 countries. Bosip says the PNG government hasn’t revealed publicly the “terms and conditions that have been agreed to by the state.” He fears China’s so-called debt trap diplomacy, whereby a country faces unsustainable debt and is forced to give up strategic assets.

This happened in Sri Lanka in 2017 when a Chinese company gained a 99-year lease port after the country failed to pay back loans to Chinese banks. “The worst thing that can happen is the Chinese say to the Papua New Guinea government, ‘you defaulted on your loan payment so we will take over all the land and especially the forest land.’ So, we are very worried,” Bosip says.

Papua New Guinea is facing a future that will see even more of its forests razed as the government pushes for more palm oil production while logging companies continue to conduct themselves in a rapacious manner. For tribes like the Kimadi, development of natural resources bodes an ill future. For them, not only their land but their lifestyle is on the chopping block.

Roberta Staley is a magazine editor and writer specializing in medical, science and business reporting.

All photos by Tallulah Photography.

Also by Roberta Staley: Trees and the laws of supply and demand: Illegal import bans and ecotourism protect tropical forests

The Asia Pacific Foundation of Canada helped fund this reporting endeavour.

The post Papua New Guinea on the chopping block appeared first on Corporate Knights.

Environmental advocates have had good reason to scorn Exxon at least as far back as 1989, when the Exxon Valdez spilled roughly 11 million gallons of oil into Alaska’s Prince William Sound. More recently, a 2015 investigative report from Inside Climate News revealed that Exxon scientists knew about the climate impacts of fossil fuel use back in the 1980s and undertook a massive lobbying and advertising campaign to sow seeds of doubt and uncertainty around the science of climate change.

Exxon is facing numerous lawsuits from cities and states across the U.S. who want the company to pay up for climate adaptation measures.  The lawsuit that I’m tracking most closely comes from the state of New York State’s Attorney General, which argues that Exxon misled investors by failing to accurately disclose and incorporate climate change risks into its business decisions. At Exxon’s annual general meeting coming up at the end of the month, New York State’s Comptroller and the Church of England will be voting against the company’s board in what has become, as Forbes put it, “a referendum on Exxon’s paltry engagement with investors on climate risk.”

Exxon was also hit with another climate risk-related investor suit this month (the third so far). It’s impossible to guess the liabilities from these lawsuits, but any ruling against Exxon will have a negative impact on its share price (which have tumbled ever since the price of oil collapsed in 2014).

Curiously, Exxon’s latest strategy has involved pledging to donate US$1 million towards a Republican-backed pro-carbon tax plan. Forgive me if I’m not impressed. Thinkprogress.org reported that the plan would end other regulations on carbon emissions and protect oil companies from further lawsuits. have declared they’ll vote against the board.

I will give Exxon credit for one tiny glimmer of green. It recently announced a $100 million joint partnership with the U.S. Department of Energy to fund research and development into breakthrough technologies to improve efficiencies and reduce carbon emissions. However, the cynic in me knows that $100 million is a drop in the bucket for a company that made over US$285 billion in 2018, and that this strategy falsely presumes that we don’t already have all the technology we need to transition away from fossil fuels.

Knowing that many investors want to ditch their shares in Exxon, Corporate Knights’ research team and I started looking for the most sustainable fossil fuel company on the stock market. We found Neste (NTOIY), a Finnish oil refiner that is now redefining what an energy company looks like. Although it still earns most of its revenues from oil refining and gas stations, biofuels like renewable diesel are now the fastest growing part of its business, comprising half its total profits. Its biofuels are made from a combination of waste sources (animal fat and used cooking oil) and plant sources (rapeseed oil and palm oil).

Because of concerns around natural forests being cleared to make room for palm oil plantations, Neste has been working to decrease the percentage of palm oil in its formula and claims to be using 100% certified and traceable sources (it even discloses the exact coordinates of all of its supplier mills). Still, environmentalists have raised concerns about state-owned Neste buying from an Indonesian supplier that has been repeatedly caught using illegal rainforest harvests. Neste has said it considers the sustainability of its supplier to have been “sufficiently restored,” but full transparency: palm oil does remain a liability for Nestle.

I really like renewable diesel as a transitional renewable energy source since it can fuel any regular diesel engine. It’s a much easier sell since companies don’t have to spend money to upgrade vehicles. Renewable diesel also fits in nicely with European Union fuel standards that require reductions in CO2 emissions and air pollution, which should give Neste a leg up. Though Neste will have to keep an eye on the fact that E.U. is planning on phasing out palm-oil derived biodiesel from transport fuel by 2030.

On the bright side, Neste is investing heavily in the growth of its renewable division, announcing a $1.8 billion biofuels production plant in Singapore. I’m also excited that they’ve started producing renewable jet fuel that will drastically reduce emissions in the aviation sector. It’s no surprise to me that Neste was named #3 on the 2019 Corporate Knights Global 100 Most Sustainable Corporations in the World list.

I’m not the only person who’s excited – investors have sent the share price soaring over the last five years. Some will argue that Neste is currently overvalued, and they’re not wrong. However, there’s still lots of room for the company to grow as the world shifts away from fossil fuels towards renewable sources.

If you’re looking to divest your portfolio from fossil fuels entirely, Neste may not be the company for you. But by showing the world how an oil and gas company can successfully transition into a renewable energy powerhouse, Neste wins this week’s Sustainable Stock Showdown.

Beta is a measure of a stock’s volatility in relation to the market. By definition, the market has a beta of 1.0, and individual stocks are ranked according to how much they deviate from the market. A stock that swings more than the market over time has a beta above 1.0. Lower beta means less risk.

Have a company in your portfolio that you want to replace with a more sustainable option? Write us an email or send us a tweet!

Tim Nash blogs as The Sustainable Economist and is the founder of Good Investing.

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One year from that deadline, UK-based non-profit Global Canopy had some less than laudatory news to share on the International Day of Forests, March 21. Not a single corporation is on track to deliver on their deforestation-free pledges.

There have been so many forest-saving announcements over the years it’s hard to keep track of them all. First came the big news of 2010 that 400+ companies in the Consumer Goods Forum would ensure that all their soy, palm oil, beef and pulp and paper would be zero net deforestation by 2020. Then, during a blue-sky day at a UN climate summit in September 2014, over 190 governments, companies (including Nestle, Kellogg’s and Cargill) and civil society organizations signed the New York Declaration on Forests with the goal of halving the loss of natural forests by 2020, striving to end it altogether by 2030. Amidst a lack of firm climate commitments, the forest declaration – while voluntary – felt fairly concrete, it felt good, it felt doable.

And the pledges kept on coming. After years of bad press, dozens of the world’s biggest palm oil producers and traders earned praise for promising to take on the ‘zero-net deforestation by 2020’ goal. Hundreds more companies from Unilever to McDonald’s had jumped on board.

Considering at least two-thirds of tropical deforestation comes from commercial agriculture, the commitments were – and are – a big deal. At the time, the UN said meeting the New York Declaration would slash carbon pollution by between 4.5 and 8.8 billion tons every year – “about as much as the current emissions of the United States.”

But if forests keep falling, is anyone held accountable? Global Canopy’s annual Forest 500 ranking has been keeping track of the 350 most influential corporations and 150 financial institutions in forest-risk commodity supply chains (linked to palm oil, soy, cattle and timber products). It concludes that while every year the number of companies making commitments rises, there’s a serious implementation gap. According to the report, “Even companies with ambitious commitments are not putting these into practice.”

Some of the report’s main findings:

• Over 40% of the companies ranked aren’t doing anything to tackle deforestation in their supply chains when it comes to palm oil, soy, cattle, timber and pulp and paper.

• Almost 1/3 of those that made commitments didn’t include any concrete policies on implementing those commitments, including publishing direct supplier lists or monitoring/verifying compliance.

Some companies are getting with the program. At least a handful are reporting on exactly how close they are to meeting their target. In 2017, Nestle said 58% of its deforestation commitments were met. JBS (the world’s largest processor of a fresh beef and pork) reported that 99.7% of its purchases were compliant and independently audited, with maps of all of its Amazon suppliers. However, Global Canopy points out that the commitment only applies to the Amazon rainforest and not to all the areas JBS source from.

While the latest Forest 500 report does offer a bit of data on whether sectors are disclosing supplier maps (overall, disclosure rates are abysmal), we were hoping to see Global Canopy share a list of corporate leaders and laggards on this front. Transparency is, after all, the oxygen for civil society to hold companies to account. Many major apparel companies have been posting their factory supplier lists for years. If major food companies aren’t sharing their palm suppliers, soy farms or cattle ranches, let’s call them out with a megaphone.

Speaking of cattle, they’re the largest driver of tropical deforestation globally, and yet companies in cattle supply chains are least likely to have a commitment. According to the report, only 16% of companies have a forest-related commitment for the beef or leather that they produce or source.

Cattle are the largest driver of tropical deforestation, but only 16% of companies have a forest-related commitment for their beef or leather.

 

One thing’s clear: companies are pretty spotty about which commodities they’re committing to clean up. Thanks to heavy campaigning by a number of environmental organizations (and all those heart-wrenching images of orangutans losing their forest homes), companies are more likely to have stronger commitments and implementation reporting on palm oil than any other commodity. Unilever, for instance, is singled out as a leader scoring 89% on palm oil, but it only earned 48% for its overall soy commitments. (With the global spotlight on palm, tellingly, no companies disclose their soy suppliers.)

In recognition of the gap between company commitments and impacts on the ground, the Forest 500 methodology was updated in 2018 to “better distinguish between companies who have set commitments, and those that have taken the next step towards implementation.” Still, onlookers will note major discrepancies in how the the organization grades top brands compared to say other forest advocates. Global Canopy gives companies like Nestle, Mondelez and PepsiCo five out of five on their palm policies (see below), when Chain Reaction Research reported in 2018 that the same brands were buying from a top 10 deforester in Asia. Greenpeace International reported that major brands like Nestle, PepsiCo, Unilever and Mondelez were sourcing from palm suppliers responsible for destroying an area of rainforest almost twice the size of Singapore in less than three years.

Global Canopy Forest 500: Palm oil leaders

Greenpeace: brand exposure to “dirty” palm oil producers

Global Canopy researcher Sarah Rogerson explains that the Forest 500 assessments only looks at commitments and reporting made publicly by the companies themselves. Says Rogerson, “This is due to the difficulty of getting standardized on-the-ground information across all of the powerbrokers that we look at,” adding “although of course company commitments and communications should always be considered alongside these reports where they are available.”

Either way, Global Canopy, Greenpeace and others agree that that industry is worryingly behind on sticking to their word. And the longer it takes corporate supply chains to catch up to their public commitments, the more natural forests it’s going to cost us.

The official 2018 progress assessment on the New York Declaration on Forests (NYFD) found that despite corporate commitments from roughly 800 companies, “the world continues to lose natural forests at an alarming rate. In the three years following the adoption of the NYDF (2014–17), the average annual rate of natural forest loss was 42 percent higher than in the previous decade.”

Yet Rogerson is still hopeful. “It’s always worth remembering that when the big commitments were made six to 10 years ago, companies didn’t know what it would take to get there. There’s been a lot of progress in terms of setting commitments and understanding how to implement those commitments.”

Nonetheless, Rogerson says there’s a huge need to put pressure on companies lagging behind. “They can’t just keep pushing the date away without some sort of backlash.” They will, she warns, “be held accountable.”

Investing in deforestation:

Investors can and should be a bigger part of holding laggards to account, says Global Canopy. “Financial institutions are even further behind in setting commitments and policies on deforestation. Of the 150 financial institutions assessed, 97 had no financing policy for any of the four key forest-risk commodities.”

 

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