Agriculture and food

This report discusses the role of South Korean companies in the worldwide palm oil market and the country’s position as an owner of oil palm concessions, a buyer of palm oil products, and a financier of palm oil operations. The analysis highlights the country’s role in the palm oil “leakage market," which trades unsustainable palm oil from growers and producers that are not compliant with No Deforestation, No Peat, No Exploitation (NDPE) policies.

Commissioned by the Netherlands Environmental Assessment Agency (PBL), this research assesses options for a more comprehensive monitoring of the Dutch coffee sustainability status. The previous approach of measuring progress based on the market share of certified coffee is perceived as not adequately accounting for the increasingly diversified sustainability strategies chosen by sector actors. The report identifies options for and barriers to a broadened approach to monitoring progress and impacts.

This research analyses the role of Brazilian soy in the overall domestic soy use on the Dutch market, and aims to estimate the revenues and profit generated from it by a selection of key industry stakeholders at different levels of the supply chain – from import and crush to animal feed to livestock product processing and eventually retailing.

For Environmental Action Germany (Deutsche Umwelthilfe), Profundo has investigated the German market for soy from South America. The research highlights the heavy dependence of German intensive animal husbandry on soy imports, and their connection to illegal deforestation of tropical rainforests. The import of soy is therefore a dangerous fire accelerant for the destruction of species-rich habitats and forests such as the Cerrado and the Amazon rainforest. The report provides a set of criteria for comprehensive supply chain due diligence, critically reviews the role of TSD chapters in trade agreements and summarizes key recommendations for effective legislation to achieve deforestation-free commodity supply chains.

This report reveals that the largest U.S. asset managers, BlackRock, State Street and Vanguard – known as the Big Three – have explicitly undermined efforts by consumer brands and agribusiness companies to halt deforestation. The Big Three collectively hold shares worth almost $700 billion in consumer brands with supply chain links to rainforest destruction, and tens of billions more in the agribusiness producers directly responsible for widespread deforestation. All three firms have voted against or abstained from voting on every single shareholder resolution requiring companies to act on deforestation since 2012, and lack clear policies to engage with companies on the issue, which is the second leading cause of climate change.

Forests and Finance is a website that reveals the role that finance plays in enabling tropical deforestation, which has been expanded to cover Brazil and Central & West Africa, as well as Southeast Asia. The website is a publicly searchable database, functioning as a transparency tool by providing CSOs and journalists a deep insight into financiers that are supporting forest-risk commodity companies. It is a joint initiative of the Forests & Finance Coalition, which includes Rainforest Action Network, Tuk Indonesia, Profundo, Amazon Watch, Repórter Brasil and BankTrack.

This new case study for Fair Finance Guide Netherlands shows that Dutch banks, insurance companies, and pension funds are financing deforestation in the Amazon and the Brazilian Cerrado-savannah, contributing to human rights violations, climate change, biodiversity loss and large-scale animal suffering.

The palm oil industry has seen considerable transformation in the last few years, as suppliers that are not compliant with NDPE policies have been increasingly excluded from supply chains. However, these gains are undermined when the same suppliers enter supply chains via spot purchases. Yet, little is known about the spot market. This paper seeks to provide information on the market, how it operates, and highlight the risk it presents to NDPE compliance efforts.

Widespread fires in Brazilian tropical forests were at the center of media attention in 2019. NGOs, politicians and celebrities called for action to stop deforestation for soy and livestock, the main cause of the fires. Indonesia also endured extensive blazes in 2019, often linked to deforestation for palm oil. Forests in Brazil and Indonesia capture carbon, retaining vast amounts of carbon dioxide and regulating global temperatures. Fires release that stored CO2 back to the atmosphere, contributing to further climate change. This report describes the main drivers of the fires in Brazil and Indonesia, the actors involved, the political context, and the risks for investors.

Palm oil refiners are a strategic bottleneck in the global supply chain. Since 2014, the largest refiners have adopted No Deforestation, No Peat, No Exploitation (NDPE) policies, the strongest private instrument to cut the direct link between deforestation and palm oil. Refiners commit to NDPE policies that cover their plantations and the plantations of their third-party suppliers. This market mechanism functions best when the entire industry follows commitments. However, non-cooperating refiners continue to leak unsustainable palm oil into the market.

Socfin group is a Luxembourg-based holding which is involved in oil palm and rubber production in Asia and Africa, with about 400,000 hectares of concessions in ten countries. It is 39% owned by the French group Bolloré and 54% owned by the Belgian businessman Hubert Fabri. The objective of this report is to get a better overview of the Socfin group’s ownership and holding structure.

The trend to integrate sustainability factors into financial regulatory frameworks is creating compliance, legal and reputational risks for local banks and investors financing forest-risk commodities in tropical countries. International banks and investors exposed to these supply chains may also be affected. Based on public sources and interviews, this report analyses the integration of sustainability in financial regulation on the international level, as well as in the regulatory frameworks of five countries with tropical forests: Brazil, Colombia, Peru, Indonesia and Malaysia.