A call to financial institutions of Ukraine: Work with palm oil stakeholders to scale climate action

Published 2024년 2월 12일

Tridge summary

Financial institutions (FIs) are being urged to demonstrate their sustainable impact in the palm oil sector due to increasing regulatory requirements and ESG commitments. However, many continue to finance non-compliant palm oil buyers, exposing them to deforestation and human rights risks. The Roundtable on Sustainable Palm Oil (RSPO) is developing a platform to provide robust data on palm oil supply chains, aiding FIs in their reporting and helping them meet the standards required for green bonds and other forms of climate finance. This collaboration is seen as crucial for the sector's sustainable transition, especially in helping smallholders, who manage 40% of the world's palm cultivation areas, secure finance for sustainable practices.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

The palm oil sector and financial institutions have long been linked. In 2011, 50 of the world’s largest investor groups backed the Principles for Responsible Investment’s palm oil investor working group, which supports engagement to improve sustainable practices. However, in today’s increasingly stringent regulatory environment, FIs looking to buy into palm oil need to show more than their potential for profit. Non-financial reporting and environment, social and governance (ESG) commitments mean FIs need to be able to demonstrate their sustainable impact in concrete terms. What is of concern is how many global financial institutions continue to be exposed to deforestation, conversion and human rights risks through their portfolios by financing corporate buyers of palm oil that are lagging behind on their sustainability commitments. Current statistics by WWF show that, in the period from January 2016 to December 2021, financial institutions provided a total of US$4.4 trillion to ...

Source: UkrAgroConsult