Last week, the US$710bn Norwegian Government Pension Fund Global (GPFG) announced that it had withdrawn investment from 23 palm oil firms that it considered to be producing palm oil unsustainably, with a particular focus on deforestation. It said it had contacted the companies and placed weight on whether the companies were RSPO members.
Responding to the announcement, the RSPO said in a statement: “For those companies involved in oil palm cultivation that are yet to be certified, this decision by the Norwegian Government is as an affirmative action in encouraging these companies to urgently make a shift to sustainable practices.
“On the other hand, the companies the GPFG has divested from include also RSPO member organizations that have begun certification and continue to make commitments to fully certify all their mills over a stipulated time frame, which is a requirement by the RSPO. The RSPO would be interested to understand the other considerations which were used by GPFG in this decision.”
The RSPO also noted that the fund still holds US$450m in the sector and has increased its investment in companies that it considers to be acting sustainably.
In its annual report, the GPFG said: “In the first quarter of 2012 we sold our stakes in 23 companies that by our reckoning produced palm oil unsustainably.
“Before reaching this decision, we reviewed a number of companies contributing to tropical deforestation through their involvement in the palm oil industry in Malaysia and Indonesia.”
The RSPO said that it would like to work together with investors to help transform the market to make sustainable palm oil the norm.
“Constructive support of investors is essential for companies in their pursuit towards sustainable practices and certification,” it said.
The RSPO standard was introduced in 2008. To date, about 15% of all crude palm oil produced globally is certified under the initiative.