Over the weekend it was reported that Iceland, the UK supermarket, has had its Christmas TV commercial banned. The advert, highlighting the damage caused by some palm oil production, was not approved by Clearcast, the assessment body which implements the UK Code of Broadcast Advertising, as it was perceived to carry a political message. Regardless, the film has been circulating widely on social media – it has been viewed more than 15 million times on Twitter – and a petition to overturn the decision has garnered some 670,000 signatures.
Along with the plight of the orangutan that the advert focuses on, palm oil production is associated with massive deforestation in Indonesia and Malaysia, among other countries. Palm oil is just one of the major commodities connected with deforestation, along with soy, cattle and timber. According to CDP1, up to US$941bn of public companies’ revenue is dependent on these commodities.
Deforestation is estimated to contribute around 15% of global carbon emissions. Forests are also the cheapest carbon capture and storage technology we have and are responsible for global fresh water transfer and oxygen supply. Approximately 33% of global climate change mitigation efforts rely on maintaining forestland. Forests will therefore play an essential role in our efforts to meet the Paris Agreement to keep global temperature increases below two degrees above pre-industrial levels. The challenge is that the environmental and long-term economic benefits of a standing tree are rarely taken into account when deciding whether to cut it.
Some companies work hard to secure segregated, sustainable supplies of forest commodities to reduce or remove the deforestation and related impacts. Since its first meeting in 2003 the Roundtable on Sustainable Palm Oil, which counts Unilever as a founding member, has been promoting sustainable production and procurement practices, and offers a certification standard allowing buyers and growers to be connected and ensure maintainable supply chains. A similar organisation exists for soy. Forest Stewardship Council, or FSC, certified wood products are globally recognised; as a business Merian Global Investors is committed to using 100% certified sustainable paper.
Palm oil is rarely listed as an ingredient, so you could be forgiven for not being aware of its presence at all. However, some estimate that it is in over half of all products we buy from supermarkets, from cosmetics to washing detergents to chocolate bars. Nonetheless, increased consumer awareness of the issues associated with some forest commodities’ production is likely to provide opportunities for those companies that can show they only use sustainably produced palm oil. 87% of the companies reporting to CDP Forests say that they see opportunities associated with addressing deforestation.
Additionally, as the global movement to tackle climate change continues, unsustainable forestry practices are likely to receive additional regulatory scrutiny. Indeed, deforestation is specifically highlighted in the Paris Agreement. Some initiatives are commodity specific, such as the EU’s resolution on palm oil calling for the introduction of minimum sustainability criteria, whereas others, such as the New York Declaration on Forests calls for the overall removal of deforestation from all agricultural commodities. Companies whose supplies cannot be demonstrated as sustainable therefore risk disruption from increasing regulatory scrutiny and challenge.
While money may not grow on trees, it certainly grows better with them than without.