The Roundtable on Sustainable Palm Oil (RSPO) has lent its backing to the WWF's Palm Oil Investor Review 2012.
Responding to the review published by the WWF, which campaigns on environmental issues including biodiversity, the RSPO said: "The results of this review also provide a strong message to palm oil companies that sustainability is important to investors as it impacts long-term investment returns and that better environmental, social and corporate governance (ESG) disclosure directly impacts the ability of investors to direct more capital into this industry.
"RSPO hopes that the industry takes heed of this and that palm oil growers in particular, many of whom have already demonstrated significant success in embracing this philosophy, continue to embed sustainability across all their core operations and assist their scheme smallholders along this journey. Downstream users of palm oil are also impacted by palm-related ESG issues and should engage with investors to provide the necessary disclosure about commitments, timing and interim progress.
"RSPO supports the recommendations of this report and welcomes greater participation by investors in the RSPO and believe that they will make a valuable contribution to the RSPO's future development."
The environmental charity's review recommends that investors work in their organisations to quantify their palm oil exposure and include palm oil in their ESG appraisals. And it urged them to commission and fund independent ESG research.
It proposed that investors worked collaboratively in the investment community to engage with and support the Roundtable for Sustainable Palm Oil (RSPO), highlight gaps in information and tools and drive sustainable reporting criteria and openness to sustainability.
Investors should actively engage with investee companies across the supply chain to join the RSPO and disclose commitments and pressure stock exchanges to mandate minimum reporting requirements for high impact sectors, the WWF review states. Firms using palm oil should also be encouraged to develop demand for certified sustainable palm oil through market mechanisms.
The WWF recommends that the RSPO should develop and publish uniform ESG performance data, educate its members about the costs and benefits of palm oil certification and help its members develop and share best practice analytical and investment tools.
It should also clarify its requirements for commitments and actions to transform the palm oil industry and have flexibility in membership fees to encourage investors with minor assets in palm oil to join.
The environmental charity hailed the growth of the palm oil industry as a huge success in the investor review. Production had risen from 10 million tonnes a year in 1990 to 50 million tonnes in 2011. This had helped lift millions of people in emerging market economies out of poverty.
It pledged to actively support investors in the palm oil sector by providing ongoing information on relevant work and research.