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Investment giant bans two palm oil companies for ‘unsustainable’ deforestation

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By Caroline Scott-Thomas+

21-Oct-2013

Ta Ann asserts that
Ta Ann asserts that "reforestation is the best way in ensuring sustainability of forest resources"

The world’s biggest sovereign wealth fund has permanently banned investment in two palm oil companies for alleged unethical practices, after dropping  23 palm oil firms from its portfolio for the same reason in March.

The US$729.2bn Norwegian Government Pension Fund Global (GPFG) is the largest pension fund in the world, holding 1% of global equity stocks, and is backed by Norway’s oil and gas industries. In 2012, it decided to include deforestation in its investment guidelines as a threat to future growth.

Following a review of its investments, and based on recommendations from the Council of Ethics, it sold its stock in 23 palm oil companies that it considered to be “unsustainable in the longer term” due to their deforestation policies.

Now, two Malaysian palm oil companies, Ta Ann Holdings Bhd in Malaysia, and WTK Berhad Holdings, have been permanently banned from GPFG investment, although they were already among those it had delisted from the fund earlier this year.

Ta Ann: Reforestation is best for sustainability

Ta Ann spokesperson Sharon Yii told FoodNavigator via email: “Whilst the decision by Norwegian Government to exclude Ta Ann from the investment universe of its pension fund is regrettable, Ta Ann stands firm in its belief that reforestation is the best way in ensuring sustainability of forest resources.

“We are constantly striving to refine our best practices as part of our commitment towards sustainable resource management and we reiterate that our Group adheres strictly to all relevant laws and regulations governing our business operations.”

No one from WTK Berhad responded to a request for comment prior to publication.

Catapult Campaigns, an organisation working to end trade in commodities linked to deforestation, described the GPFG move as recognition that rainforest destruction is not just bad – it’s bad for business. It generates serious reputational and financial risk, and investors worldwide should look hard at the palm oil and pulp and paper sectors and factor this substantial risk into their valuations.”

Three other companies were also permanently banned from the fund based on the Council of Ethics’ recommendations: Zijin Mining Group and Volcan Compañia Minera for risk of severe environmental damage, and Zuari Agro Chemicals Ltd. for risk of contributing to the worst forms of child labour.

2 comments (Comments are now closed)

Well done! GFPG

It is high time for someone to take action that is directly linked to $. Strike those Unethical Palm producers, where it hurts.
'Reforestation', is only a fix and cannot replace those lost Rainforests,Peatlands that are hundred if not thousands of years old. Not to mention, species extinction, loss of homes for indiginous people that comes with Deforestation.
'Reforestation', is not the answer!

Just to clarify, Palm oil is what is being discussed not Coconut plantations.

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Posted by Ro
23 October 2013 | 10h042013-10-23T10:04:52Z

Coconut Fuel for thought

I agree with dropping those companies who do not support sustainable growth. I am passionate about the coconut tree and all the foods that can be made from it, especially coconut water, coconut meat, and coconut oil. Palm oil is different in ways. There are many commercial coconut water processing companies who have private investors like Madonna, Elton John, Rhiana, and many others. I hope that in the future celebrity types will follow more the true nature of fresh coconut and coconut water. Our company, Noelani Coconut water Company is sustainable. We only market fresh coconut water and have a very limited carbon footprint to leave behind.

~ Ed Hartz

Report abuse

Posted by Ed Hartz
21 October 2013 | 18h582013-10-21T18:58:49Z

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