Storebrand halts investments in palm oil firms

0

STOREBRAND ASA ended its investment in most palm oil producers, apart from Golden Agri-Resources Ltd, after Norway’s second-largest insurer found the companies breached its environmental sustainability standards.

“The main driver behind deforestation in tropical regions is often the establishment of new palm oil plantations,” Christine Meisingset, head of sustainable investments at the insurer, said in a statement. “Storebrand would rather invest more in companies that are pushing the industry toward a more sustainable approach.”

Storebrand, Norway’s largest insurer after Gjensidige Forsikring ASA (GJF), assesses possible investments based on its own environmental, social and governance criteria.

The Oslo-based company last year halted investments in coal producers and those with exposure to oil sands, adding to a blacklist that includes tobacco and landmine producers.

A Storebrand study of the palm oil industry found 11 companies to be in breach of the insurer’s sustainability standards, Meisingset said. “Climate change is the most comprehensive risk to sustainability, and the protection of forests, especially rainforests, is essential in order to negate the effects of climate change.”

The Norwegian investor declined to name the 11 palm oil producers it decided to exclude from its investments, saying it plans to continue dialogue with them. Indonesia and Malaysia are the largest producers, with some leading companies including Sime Darby Bhd (SIME), Wilmar International Ltd. (WIL) and Indofood Agri Resources Ltd. (IFAR)

Conserving forests, part of a United Nations initiative, is key to controlling climate change because deforestation and changes in land use account for about 17 percent of global emissions of heat-trapping gases.

Norway’s sovereign wealth fund, the world’s largest, sold investments in 23 palm producers including Wilmar, Golden Agri and Kuala Lumpur Kepong Bhd in 2012 due to concerns about deforestation.

Palm oil, the world’s most-used edible oil, is used in products ranging from margarine and ice cream to detergents, cosmetics and biodiesel. — Bloomberg