Candriam has joined investors and leading consumer brands in a call for strengthened standards for certifying the sustainable production of palm oil.

Institutional investors representing over $5 trillion in assets – including Candriam Investors Group - have joined together with some of the world’s largest and most recognizable consumer brands, to call on the Roundtable on Sustainable Palm Oil (RSPO) to strengthen its standards for certifying the sustainable production of palm oil.

Palm oil is a globally traded agricultural commodity that is used in 50 percent of all consumer goods, from lipstick and packaged food to body lotion and biofuels. Used in about half of the products on supermarket shelves, palm oil imports to the U.S. have jumped 485% in the last decade. This increased demand has led to the rampant destruction of rainforests and the displacement of local communities to make way for palm oil plantations, primarily in the tropical countries of Indonesia, Malaysia and Papua New Guinea. Most worryingly, by razing rainforests to farm the oil, companies arereleasing dangerous quantities of greenhouse gas emissions into the atmosphere, making palm oil production a big contributor to climate change.

Together with other PRI signatories, Candriam Investors Group has signed a letter to the Roundtable on Sustainable Palm Oil (RSPO) that aims to represent investor and company interest in seeing the RSPO strengthen its certification standards and practices to align with best practices for producing palm oil sustainably.

The RSPO is the palm oil industry’s primary certification body, yet its standards are widely recognized to contain key gaps that fail to address some of the most urgent sustainability issues facing the industry.
This letter was prompted by the recognition that, while many companies have adopted sourcing standards that go beyond those currently set by the RSPO, ultimately the industry supports and would like to see the RSPO become a more effective tool for ensuring palm oil is produced sustainably.

Given current shortcomings of RSPO certification, purchasing RSPO Certified Sustainable Palm Oil (CSPO) does not sufficiently address critical sustainability concerns in the palm oil supply chain.The RSPO currently does not include protections for some of the most critical externalities of palm oil production, such as conversion of High Carbon Stock forests and expansion on peatlands, nor provide sufficient assurance that its standards are being complied with.

This collaborative initiative is calling on the RSPO to take the very specific actions. To find out more, click here to read the letter.

Candriam Investors Group is committed to joining investors’ groups and to supporting collaborative engagement initiatives whose goals are to encourage companies to improve their disclosure on any sustainable development-related challenges that might impact companies’ long-term value. The final objective is to increase companies’ awareness and influence their behaviour as well as their transparency on specific sustainability-related themes related to our SRI screening.

  • In this particular case, this initiative is relevant for Candriam’s Best-in-Class analysis, specifically the sustainability challenges Climate change and Resource Depletion of our macro analysis (evaluation of the company’s activity) and the Supplier practices in our micro analysis (evaluation of responsible stakeholders management).
  • It also plays an important role in Candriam’s Norms-based analysis, particularly regarding the domains of Environment and Human Rights.