Forest Conversion Financing
Financial institutions need to tread carefully in the palm oil sector
The palm oil industry has had bad press of late. The rapid expansion of oil palm plantations, particularly in Southeast Asia, has resulted in large-scale deforestation and the haze-related health problems due to the use of fire to clear land. Producers that disregard environmental and social standards face the prospect of falling market share as more and more buyers demand sustainable palm oil. They also expose their creditors and investors to reputational risk.
New guide for financial institutions: The Palm Oil Financing Handbook
Practical guidance on sustainable financing and investing in the palm oil sectorHow can banks and investors reduce their risks in the palm oil sector?
How can financial institutions encourage sustainable palm oil production?
These two questions are the starting point for The Palm Oil Financing Handbook, which aims to help financial institutions create or strengthen their own sustainable palm oil finance and investment policies. The handbook offers step-by-step advice on everything from defining the scope of such a policy, to developing appropriate screening criteria and helping client or investee companies comply with the policy.
The handbook has been developed with the needs and concerns of financial institutions in mind
As such, the handbook provides:• proposed measures that are feasible and affordable to adopt, while also being sufficiently
rigorous to ensure an effective and credible policy on palm oil;
• guidance on how to integrate the sustainable palm oil policy with standard operating procedures;
• advice on how to apply the sustainable palm oil policy for both upstream and downstream companies and for lending and non-lending activities; and
• tips on how to manage the internal roll-out of the sustainable palm oil policy, and the communication of the policy with external stakeholders.
and features:
• a model sustainable palm oil policy that can be adapted to fit the needs of different financial institutions;
• ready-to-use, downloadable templates for key documents to support implementation of a sustainable palm oil policy;
• a ‘navigational aid’ to help readers find the information of most relevance to them; and
• a glossary of technical terms and a list of additional sources of information – with web links for downloading.
