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Palm oil industry failing on deforestation goals, new analysis finds

Worker throwing the oil palm fruit branch into trolley, in Johor Bahru, Malaysia.

Demand for palm oil has become increasingly controversial due to the commodity's role in driving deforestation, particularly in Southeast Asia. Photo by Mohd Erwin on Shutterstock.

Many of the world's biggest palm oil producers, processors and traders are still failing to implement effective strategies to prevent the destruction of forests across the tropics, often despite having adopted zero deforestation commitments, according to the Zoological Society of London (ZSL).

Clearance and burning of forests and carbon-rich peat soils in order to free-up land for palm oil plantations is among the biggest drivers of deforestation in the tropics, destroying precarious wildlife habitats, removing natural carbon storage and accelerating biodiversity loss and climate change.

But ZSL found most firms involved in the supply chain for palm oil — used in myriad food and personal care products worldwide — still do not report basic information on how they are monitoring deforestation, caused either by their own or their suppliers' operations, and that they remain far from achieving deforestation goals.

The sobering findings come despite a host of corporate commitments to end deforestation, including a global deadline agreed through the New York Declaration of Forests to halve deforestation by 2020, and a Consumer Goods Forum pledge in 2010 from its members, which include high profile names such as Nestle and P&G, to achieve zero net deforestation from their products by the same date.

While 55% of palm oil producers apply clear zero deforestation commitments on their suppliers, only 10% comprehensively report on how they are monitoring their suppliers, potentially undermining efforts to enforce their pledges.

The findings come in the wildlife conservation charity's latest annual assessment of the world's biggest palm oil producers, processors and traders. It shows that while 56 of the 79 companies assessed — 71 percent — have made a clear commitment to zero deforestation, just 42 percent — 33 out of 79 — provide detailed information on how they are actually monitoring deforestation in their own operations.

Moreover, while 55 percent of palm oil producers apply clear zero deforestation commitments on their suppliers, only 10 percent comprehensively report on how they are monitoring their suppliers, potentially undermining efforts to enforce their pledges throughout their supply chains, according to ZSL.

"2020 has been a wake-up call, with many realizing the impact of human consumption and behavior on the planet," said Eleanor Spencer, ZSL's palm oil technical adviser. "While progress has been made by palm oil companies in setting clear commitments to tackle deforestation, it is now certain that many 2020 zero deforestation targets will not be met. These deadlines cannot be extended any further if we are to meaningfully tackle the climate and biodiversity crises."

ZSL's analysis follows data over the summer showing that primary tropical forest loss has in fact increased during the past 10 years since the Consumer Goods Forum made its zero deforestation pledge, underscoring the need for companies to urgently ramp up their efforts to curb forest destruction, according to Spencer.

"The responsibility to tackle deforestation and improve the sustainability of palm oil production is shared by all actors in the supply chain and key stakeholders outside of it, and it is vital that these different groups work together to push for change," she added.

The analysis was carried out by ZSL's Sustainable Palm Oil Transparency Toolkit (SPOTT) team, an initiative developed by the charity to incentivize the transparent reporting and the implementation of best practice in managing commodity supply chains.

The SPOTT team also highlighted similar concerns with other aspects of companies' No Deforestation, No Peat, No Exploitation (NDPE) commitments, with 72 percent of companies assessed providing comprehensive commitments to no planting on peat, but only 20 percent reporting on the implementation of the commitment. Around three-quarters of firms — 59 out of 79 — committed to zero burning, yet only just over half disclosed details of fire management and monitoring practices, the assessment found.

It is crucial now that the industry and its stakeholders come together to ensure sufficient action is being taken on the ground, and that these zero-deforestation targets are not empty promises.

"These results should be a red alert for the palm oil producers, their investors, banks and buyers downstream — all of whom have made the same commitments to stopping forest loss," Spencer said. "It is crucial now that the industry and its stakeholders come together to ensure sufficient action is being taken on the ground, and that these zero-deforestation targets are not empty promises."

Demand for palm oil has become increasingly controversial due to the commodity's role in driving deforestation, particularly in south-east Asia, including through devastating forest fires which in 2015 produced more carbon emissions that the entire daily emissions of the U.S. Proponents of palm oil point out, however, that it remains one of the most efficient vegetable oil crops in terms of yield per hectare, and that a shift towards less-efficient alternative oils would therefore require more land and potentially lead to even greater habitat destruction.

As well as signing up for certification from the Roundtable on Sustainable Palm Oil (RSPO), the world's largest palm oil certification scheme, some multinationals have attempted to develop systems to overcome these challenges. Confectionery giant Nestlé last year launched a satellite monitoring tool in collaboration with Airbus and the Earthworm Foundation, while earlier this month a coalition of investors including Aviva, Fidelity and ACTIAM announced they are developing satellite technology which uses radar imagery, machine learning and data analytics to detect changes in tropical forest cover, helping them assess retailers' and manufacturers' efforts to prevent their demand driving deforestation.

But, as ZSL's stark new findings confirm, the industry and its big brand customers still has a long way to go if it wants to live up to their zero deforestation commitments.

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