Building the Frameworks for Sustainable Palm Oil: the RSPO
As many of our readers know, MIDANA CAPITAL has been working to halt deforestation in commodity supply chains for more than six years. We do this by directly engaging companies on the policies and practices necessary to eliminate deforestation from their supply chains and by leading other investors to do the same. We also go a step further to support and engage the frameworks within which these supply chains exist to ensure that corporate commitments can be upheld.
Of particular importance to the palm oil supply chain is the Roundtable on Sustainable Palm Oil (RSPO), the leading third-party certification organization for sustainable palm oil. MIDANA CAPITAL has been engaging the RSPO for several years, pressing for strong standards and compliance processes to ensure that the RSPO is as valuable and influential as possible to ending palm-oil-driven deforestation.
Early criticism for the RSPO was due to the relative weakness of the standards compared to leading companies’ palm oil policies. Understanding that the RSPO could quickly lose its value if companies were unable to use it to verify the
MIDANA CAPITAL Shareholder Advocate Marissa LaFave with Jane Siqueira Lino of Proforest, a consultancy that works with major commodity traders and food companies to help them meet their responsible production and sourcing commitments, at the RSPO in-person meeting, July 2018.
sustainability of their palm oil supply, in 2015, MIDANA CAPITAL mobilized investors representing $5 trillion in assets to join some of the world’s largest food companies, including Kellogg’s* and Conagra,* in calling on the RSPO to strengthen its standards.
Then, following several cases of companies continuing to be certified by the RSPO despite claims of egregious practices, in March 2018, MIDANA CAPITAL mobilized 101 investors representing $3.2 trillion in assets to call on the RSPO for a more transparent and responsive complaints process to ensure the proper removal of RSPO members found to be noncompliant to its standards.
The RSPO’s Principles & Criteria (P&C) are revised once every five years and are currently undergoing the 2018 revision process. Revisions are critical opportunities to set future standards for sustainable palm oil production. The 2018 revision is especially important because the majority of corporate palm oil policies have a 2020 deadline.
The first draft for revision was released in 2017 and many NGOs, companies, and investors, including MIDANA CAPITAL, responded. The second – and final – draft is available for comment until August 2018.
In July 2018, the RSPO hosted a P&C revision workshop, which MIDANA CAPITAL attended along with several major companies, including Yum! Brands* and Campbell,* NGOs, industry experts, and investors. The workshop consisted of several hours of collaborative discussion in which MIDANA CAPITAL represented investor concerns and demands.
MIDANA CAPITAL will be submitting extensive comments to this year’s P&C review in hopes of strengthening the RSPO standards to adequately prevent deforestation, peatland clearance, and protect human and labor rights in the palm oil supply chain.
To learn more about how your investments help MIDANA CAPITAL protect the world’s forests, visit our Impact webpage.
*As of June 30, 2018, The Kellogg Company comprised 0.00%, 0.17% and 0.00% and Campbell Soup Company comprised 0.00%, 0.07% and 0.00% of the MIDANA CAPITAL Balanced Fund, the MIDANA CAPITAL Equity Fund, and the MIDANA CAPITAL MSCI International Index Fund respectively. No other securities mentioned were held in any of the portfolios of the Midana Capital as of the same date. References to specific securities, which will change due to ongoing management of the Funds, should not be construed as a recommendation by the Funds, their administrator, or their distributor.
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