Palm oil assessment summary – November 2018

Michael Guindon and Annabelle Dodson | 06 Nov 2018 | Kota Kinabalu, Malaysia

SPOTT assesses 70 palm oil producers and traders on the public disclosure of their policies, operations and commitments related to environmental, social and governance (ESG) issues.

We encourage stakeholders to engage with producers and traders, as company policies and commitments may not always translate into effective implementation on the ground.

23 / 70
companies
score
< 33%

22 / 70
companies
score
33-66%

25 / 70
companies
score
> 66%

Indicator categories:

SPOTT scores palm oil producers and traders using up to 119 ESG indicators across 10 categories. Click on the categories below to find out more about the companies, and visit their pages to view full assessments.

Transparency
score ranges:

lower
< 33%

moderate
33-66%

higher
> 66%

47.9% Average score:

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Sustainability policy and leadership 58.4%
- 48 companies have put in place clear sustainability policies that apply to all their operations.
- 31 companies extend their sustainability policies to all their suppliers.
- 45 companies are full members of the Roundtable on Sustainable Palm Oil (RSPO), but only 17 are members of other external industry schemes.
Landbank, maps and traceability 54.2%
- 51 companies report a planted area, totalling over nine million hectares (ha).
- 30 companies have made at least some of their estate maps available.
- 22 companies have made all their estate maps available.
- 42 companies report their areas set aside for conservation or High Conservation Values (HCV) areas, totalling over one million hectares.
- 18 companies with trading operations achieved more than 80% traceability to mill level.
- 22 companies have achieved more than 75% traceability to plantation for their own mills.
- Two companies have achieved more than 75% traceability to plantation for supplier mills.
Deforestation and biodiversity 53.0%
- 46 companies have clear commitments to zero deforestation.
- Three companies have unclear zero (net) deforestation commitments.
- 26 companies extend their zero deforestation commitments to all suppliers.
- 31 companies report habitat management/restoration activities.
- 19 companies provide strong evidence of monitoring deforestation.
- Five companies provide some evidence of monitoring deforestation, but they lack clear methodologies or timeframes.
HCV, HCS and impact assessment 47.5%
- 44 companies commit fully to the High Conservation Value (HCV) approach.
- 24 companies extend their HCV commitment to smallholders and/or suppliers.
- 34 companies commit fully to conducting High Carbon Stock (HCS) assessments and to applying the HCS Approach for all assessments.
- 25 companies have no HCS-related commitments in place to date.
- 11 companies have unclear HCS-related commitments that may not apply to all new planting and development or are another assessment methodology, not clearly the HCS Approach.
- 17 companies have made HCS assessments publicly available to date.
- 33 companies have made social and/or environmental impact (SEIA) assessments publicly available to date.
Peat, fire and GHG emissions 43.8%
- 34 companies have a commitment to no planting on peat of any depth.
- 16 companies have weak or unclear commitments that fail to specify all depths of peat.
- 20 companies have no commitment prohibiting development on peat.
- 48 companies have a clear commitment to zero burning.
- 28 companies extend their no burning commitment to smallholders and/or suppliers.
- 33 companies disclose data relating to monitoring/managing fires.
- Nine companies have a time-bound plan to reduce greenhouse gas (GHG) emissions.
- 11 companies report progress on reducing GHG emissions over time.
Water, chemical and pest management 40.3%
- 11 companies have clear time-bound commitments to improve water use per tonne of fresh fruit bunches (FFB) processed.
- 12 companies have weak or unclear commitments to improve water use.
- 47 companies are clearly implementing an Integrated Pest Management (IPM) approach.
- 27 companies no longer use paraquat.
- Three companies have a time-bound plan to phase out paraquat.
Community, land and labour rights 55.7%
- 15 companies do not have a public commitment to respect human rights.
- 45 companies commit to the principle of free, prior and informed consent (FPIC).
- 32 companies clearly commit to all eight fundamental International Labour Organization (ILO) Conventions or Free and Fair Labour Principles.
- 12 companies have provided evidence that they are paying the minimum wage.

Certification standards 35.8%

45 companies are full members of the Roundtable on Sustainable Palm Oil (RSPO) certification scheme.
4 companies are not full members but own subsidiaries that are RSPO members.
21 companies are currently not RSPO members.
16 companies have RSPO-certified more than 75% of their mills.
Nine companies have RSPO-certified more than 75% of their estates.
32 companies are certified under other voluntary certification schemes, including organic certification, International Sustainability and Carbon Certification (ISSC), Sustainable Agriculture Network (SAN), Roundtable on Sustainable Biomaterials (RSB), RSPO NEXT, etc.

Smallholders and suppliers 37.2%

27 companies report a clear process for prioritising, assessing and/or engaging suppliers on compliance with their policy and/or legal requirements.
Seven companies follow a weak or unclear process for prioritising, assessing and/or engaging suppliers on compliance with their policy and/or legal requirements.
Nine companies disclose clear suspension or exclusion criteria for suppliers.
Nine other companies publish unclear criteria for suspending or excluding suppliers, with no timeframes for action or steps taken.

Governance and grievances 51.9%

53 companies have commitments to both ethical conduct and prohibition of corruption.
10 companies have no commitment to ethical conduct nor prohibition of corruption.
32 companies recognise whistleblowers and have relevant procedures on whistleblowing.
17 companies allow whistleblowing but provide no procedures.
21 companies publish no information on whistleblowing.
19 companies report details of grievances publicly.

Key findings:

The average score of 70 palm oil producers and traders is 47.9% in November 2018, compared to 50.4% during the last assessment of 50 palm oil companies in November 2017.
25 companies have an overall score of at least 66% (higher transparency), compared to 17 companies in November 2017.
23 companies have a score below 33% (lower transparency), compared to 14 in the last assessment round.
34/50 companies assessed in 2017 saw an increase in their scores in 2018 – the average change in score was +6%.
14/50 companies assessed in 2017 saw a decrease in their scores in 2018 – the average change in score was -3%.
Companies perform best in the categories Sustainability policy and leadership (average score: 58.4%) and Community, land and labour rights (55.7%).
There is room for improvement in Certification standards (35.8%) and Smallholders and suppliers (37.2%).
The average score of 45 Roundtable on Sustainable Palm Oil (RSPO) members, including companies with subsidiary RSPO members, is 60% vs. 20% for 21 non-RSPO members.