Storebrand pulls out from the palm oil industry
Storebrand, the largest private pension fund in the Nordic region, is divesting its shares in eleven of the twelve palm oil companies in which it is invested. “A victory for the rainforest and a crystal clear signal to the palm oil industry”, declares Rainforest Foundation Norway.
In a press release, Storebrand states that following a thorough review, it is excluding eleven palm oil companies from its investment portfolio, in light of the fact that they are responsible for extensive environmental destruction.
“This is a victory for the rainforest, and I am certain that this would not have happened had it not been for the fact that we, alongside other organisations, have focused attention on the destructiveness of the palm oil industry”, says Vemund Olsen, Head of Rainforest Foundation Norway’s Policy Department.
The news has been very well received by Rainforest Foundation Norway (RFN), which has been working for a number of years to encourage Norwegian investors to pull out from the worst offenders in terms of rainforest destruction. Over the last year RFN has, moreover, conducted an extensive campaign against the use of palm oil in Norwegian food products. The campaign has already engendered a 70% reduction in the use of palm oil by Norwegian food producers.
Hope that the industry will change its ways
The Nordic region’s biggest pension provider is now following up with a clear signal to the palm oil sector that the destruction of rainforest is not acceptable.
“As a savings and pension provider, we are focused on delivering long-term value to our customers. Climate change is the most comprehensive risk to sustainability, and the protection of forests, especially rainforest, is essential in order to negate the effects of climate change”, says Christine Meisingset, head of sustainable investments at Storebrand.
The palm oil industry is the main cause of rainforest destruction in Indonesia and Malaysia. In both countries the rainforest is disappearing at an alarming rate, and the production of palm oil threatens both people, animals and the climate.
”We hope that Storebrand’s decision will help the palm oil industry realise the seriousness of the situation and halt the rainforest devastation for which it is responsible”, says RFN’s Vemund Olsen.
Pressure pays off
Norway’s Government Pension Fund Global (GPFG) was rightly the subject of acclaim in the spring of 2013 when it divested its shares in 23 palm oil companies deemed responsible for rainforest destruction - among them Wilmar, named ”the worst company in the world” by Newsweek Magazine. At the same time, the GPFG effected a manifold increase in its investments in the Malaysian palm oil companies Sime Darby and Genting – companies that Storebrand is now divesting as they have rated poorly in the pension provider’s own assessments.
In total, the GPFG is invested in five companies now being excluded from Storebrand’s portfolio. Several Norwegian investors maintain holdings in the palm oil companies that Storebrand is now pulling out from – among them KLP, a mutual insurance company responsible for the management of municipal and county pensions and insurance issues, which holds shares in eight of the eleven companies excluded by Storebrand.
”The palm oil industry needs capital and, as such, pressure from investors and investment banks can be very effective in engendering improved behaviour on the part of the companies. In addition, pressure is needed from importers, food producers, consumers and NGOs such as Rainforest Foundation Norway. It is to be hoped that more investors will follow Storebrand’s lead”, says RFN’s Head of Policy, Vemund Olsen.
A number of palm oil companies are already in the process of implementing policies on no deforestation, among them former “prime offender” Wilmar, which goes to show that pressure does, indeed, pay off.