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FFC to Bunge: Reconsider sourcing from palm oil supplier Sarawak Oil Palms Berhad

April 17th, 2014

palm oil 1Friends Fiduciary, along with other institutional investors, urges agribusiness giant Bunge Limited to stop sourcing palm oil from Sawarak Oil Palms Berhad (SOP). SOP is not only engaged in rampant deforestation and the clearance of carbon-rich peatland, but is additionally fighting industry initiatives to reduce greenhouse gas emissions and protect forests, peatlands and communities. The state of  Sarawak has one of the highest rates of peatland clearance globally, due in part to industry pressure, particularly SOP, to more aggressively expand palm oil development in the region. A 2012 Stanford University study concluded that projected peatland clearance throughout Borneo will, by 2020, result in an additional 558 million metric tons of carbon dioxide released into the atmosphere – an amount greater than all of Canada’s (2012) fossil fuel emissions. Major companies like Nestle, Kellogg, Unilever and Wilmar International have committed to purchase palm oil exclusively from suppliers adhering to environmental and social protections, but Bunge’s primary supplier SOP is known to be actively preventing these companies from implementing their commitments. For example, SOP’s CEO also serves as CEO of the Sarawak Oil Palm Plantation Owners Assocation, and has been using the trade association as a platform to aggressively lobby Sarawak’s government and publicly attack and attempt to undermine Wilmar’s efforts to implement protections.  FFC has supported Wilmar’s leadership on development of palm oil that does not contribute to deforestation, development of peatlands and exploitation of local communities. As a socially-responsible and long-term investor, FFC is concerned about Bunge’s sourcing from SOP despite Bunge’s stated commitment to sustainable sourcing. We believe Bunge could face reputational and market access risks given widespread consumer concern and the uptake of sustainability commitments by consumer companies. FFC urges Bunge to source palm oil responsibly for social, environmental and business reasons. To view the letter addressed to Bunge, click here