Home Topics Business Palm Oil Companies Go Green Under Public Pressure: Study

Palm Oil Companies Go Green Under Public Pressure: Study

© Reuters. FILE PHOTO: A worker arranges tufts of palm oil on a truck at a factory in Tanjung Karang

From Maytaal Angel

LONDON (Reuters) – Of the seven resource sectors driving deforestation, palm oil companies are doing the most to reduce their environmental impact after years of public pressure, a study by a global environmental disclosure group shows.

The CDP study, which will be released Monday but pre-sent to Reuters, is likely to put pressure on commodity companies to turn rainforest green, given advances in palm oil, which environmentalists blame for much of the destruction of tropical areas.

Based on responses from more than 550 leading companies in the agricultural commodities sector, the study found that almost everyone who uses or produces palm oil is taking at least one industry-standard measure to combat deforestation, such as sufficiently ambitious traceability targets.

On the other hand, companies involved in rubber perform the least, while the coffee and livestock products sector also performs poorly, the study found.

“Palm oil has been the subject of public campaigns in recent years. Companies view palm oil as a reputational risk,” she said.

CDP measures the environmental risk and impact of more than 10,000 companies, cities, states and regions on behalf of leading global investors.

Sareh Forouzesh, deputy director of forests at CDP, said: “There is a solid business model for companies to source raw materials sustainably.”

Companies are asked to provide information about CDP because they use or produce the seven raw materials that promote deforestation: wood, palm oil, soy, livestock, rubber, cocoa and coffee.

However, only a third of the companies asked to disclose to the CDP study did so. This still represents significant progress compared to previous studies, but it also shows a gap in the transparency of the extractive industries and, most likely, in their deforestation efforts.

Scientists say protecting forests is one of the cheapest and most effective ways to curb climate change, as trees suck in carbon dioxide, the main gas that is heating the planet.

According to the United Nations, 10 million hectares of forest have been destroyed annually in the five years since 2015.

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