Agriculture and food

April 2020

April 28, 2020
NDPE Policies Cover 83% of Palm Oil Refineries; Implementation at 72%
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.

February 2020

February 11, 2020
Unravelling the Socfin Group
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.

January 2020

January 31, 2020
Financing Deforestation Increasingly Risky Due to Tightening Regulatory Frameworks
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.
January 23, 2020
TIAA’s Farmland Funds Linked to Fires, Conflicts and Legacy Deforestation Risks in Brazil
This report analyses the sustainability and financial risks of the farmland investment funds of the Teachers Insurance and Annuity Association of America (TIAA, formerly TIAA-CREF) in Brazil. Such risks are most prevalent in Matopiba, Brazil’s newest soy frontier, consisting of part of the states of Maranhão, Tocantins, Piauí and Bahia. TIAA farmland investments operate through various companies, such as Radar and its subsidiaries, that acquire and manage properties. CRR’s sustainability analysis shows that deforestation and fires have taken place on TIAA’s farmland portfolio, enabling negative social impacts on local communities.

December 2019

December 17, 2019
Feed and Livestock in Brazil, China, EU Consume Most Cerrado Soy
This paper maps players in the Matopiba (a region in the Brazilian Cerrado) soy supply chain, focusing on midstream crushing as well as compound feed and livestock sectors in key soy processing markets. Their soy consumption is connected to considerable deforestation risk.
December 11, 2019
A Review Of Sustainable Finance Reforms In Indonesia
This report, based on data from the Forests&Finance database, released by Rainforest Action Network, TuK Indonesia, WAHLI, Jikalahari and Profundo reviews the progress of Indonesia’s Sustainable Finance reforms over the past 5 years. It shows that while new standards have started to improve the requirements on banks to disclose Environmental, Social and Governance (ESG) risks in their portfolios, major loopholes remain. These problems are further compounded by lack of bank implementation on the obligations they do have. The banks assessed failed to properly disclose - much less address - serious ESG risks identified in the operations of their major clients. Unreported risks included use of fire to clear land, labor violations, human rights violations, peatland development and deforestation. The report presents a suite of policy recommendations to close regulatory loopholes, improve bank risk management processes, and to increase transparency and accountability to the public and communities impacted by reckless bank financing.
December 13, 2019
Deforestation Not ‘an Immediate Priority’ for Walmart Despite Financial Risks
By revenue, Walmart is the largest company in the world, employing about 2.2 million people and serving over 265 million customers a week. Private-label products sold by Walmart contain commodities that contribute to deforestation. For the forest-risk commodities – palm oil, pulp and paper, soy, and beef – Walmart has set zero net deforestation goals for 2020. Although Walmart encourages its suppliers to address deforestation in their supply chains, the company does not have a system in place to track and monitor the origin of these four commodities.
December 9, 2019
Oil Palm Growers Exposed to USD 0.4-5.9B in Social Compensation Risk
Oil palm plantation development and its effects on land clearing has likely impacted areas of critical value to local communities. While palm growers have made progress in quantifying and compensating loss for areas with environmental value, they have made less headway regarding compensation for clearing of land with social and cultural values. If palm growers cannot effectively mitigate these risks and compensate for the losses, complaints and conflicts with local communities are likely to ensue. In Indonesia, evidence shows that growers experience substantial operational, stranded land, and market access risks from social conflicts.

November 2019

November 22, 2019
Palm Oil Biofuels Market May See Shake-Up in 2020, Heightening Leakage Risks
The expansion of the palm oil industry in the last ten years was partially in response to the anticipated demand for biofuels worldwide. The expected EU biodiesel boom did not materialize, resulting in a systemic oversupply of palm oil in Southeast Asia. A number of recent policy initiatives may bring about significant shifts in the enduser markets of palm oil-based biodiesel starting January 1, 2020. The geographical markets and the sectors with growing biodiesel demand are not traditionally known for their strict sustainability demands, and therefore may pose new leakage market risks.
November 4, 2019
JJF Holding Land-Grabbing Case Intensifies Soy Traders’ Exposure to Cerrado Deforestation
This report analyses deforestation risks linked to the “JJF Holding de Investimentos e Participações" land-grabbing case in Formosa do Rio Preto in the Matopiba region of the Cerrado biome (Brazil). The JJF Holding case, one of the largest land grabbing incidents in Brazil, is linked to land tenure insecurities that cover 366,000 hectares in one of the key Cerrado soyproducing areas. The land tenure insecurities expose soft-commodity traders like Bunge, ALZ and Cargill, to deforestation and financial risks
November 15, 2019
Procter & Gamble’s Deforestation Exposure May Affect Reputation
Procter & Gamble has a No Deforestation, No Peat, No Exploitation (NDPE) policy that covers all third-party suppliers, and it has committed to developing a traceable supply chain. P&G applies its responsible sourcing policy at the supplier group level but relies on intermediary traders to engage with non-compliant growers and ensure a clean supply chain. In July 2019, P&G changed its organization design to six Sector Business Units (SBUs). It has decentralized responsibility for supply chains across its new business units.

October 2019

October 29, 2019
Future Smallholder Deforestation: Possible Palm Oil Risk
Independent palm oil smallholders in Indonesia are facing declining yields per hectare as their trees are aging. Financial and land tenure hurdles prevent effective financing of replanting, raising the risk of increasing deforestation in Southeast Asia after a period of declining forest loss. This report evaluates the financial and other hurdlesin Indonesia and investigates plans by governments and companies to offer solutions.

August 2019

August 1, 2019
Glencore Agriculture Exposes Canadian Pension Funds to Deforestation Risks
Glencore Agriculture is an agricultural commodity trading company that operates in corn, cotton, soy, and grains markets. This report assesses Glencore Agriculture’s exposure to deforestation risks in Brazil’s soy supply chain.
August 30, 2019
Palm Oil Growers Suspended Over Deforestation Lose USD 1.1B in Equity Value
A large majority of global palm oil traders and refiners have implemented No Deforestation, No Peat, No Exploitation (NDPE) sourcing policies in recent years. Violations of such policies have repeatedly led to suspensions of oil palm growers from supply chains. This report investigates how 15 suspensions as a result of NDPE non-compliance impacted the financial performance of four oil palm growers: Sawit Sumbermas Sarana (SSMS), Austindo Nusantara Jaya (ANJ), Tunas Baru Lampung (TBLA), and Indofood Agri Resources.
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