Palm oil and sustainability: the facts 16-11-2020

Lots of good qualities, but sadly also lots of bad ones

Palm oil, a vegetable oil extracted from the fruit of the oil palm, is used in a wide range of products including foods, detergents, cosmetics, paint and biodiesel.

Palm oil cultivation is more efficient than other crops in terms of land use, and palm oil is also said to be a healthier alternative to trans fats in the food industry. Even so, its cultivation is controversial.

Non-sustainable palm oil cultivation: harmful for the environment and bad for human rights

Important ecosystems end up being destroyed to make room for palm oil plantations. This threatens biodiversity, the natural variety of plant and animal species living on Earth.

Industrial-scale logging and slash-and-burn agriculture increase greenhouse gas emissions.

Human rights, labour rights and land rights may be violated.

KBC Asset Management tightens inclusion criteria

The ‘Roundtable on Sustainable Palm Oil’ (RSPO), a not-for-profit organisation, was set up to make palm oil production more sustainable. All member companies undertake to adhere strictly to the standards imposed by the RSPO.

KBC AM closely monitors the companies it includes in its SRI funds and is duly tightening its criteria for palm oil companies. Any companies that are not RSPO members or that are involved in controversial situations will be excluded, thus eliminating malpractice to the maximum possible extent from its funds.

Kenneth De Bruycker, SRI expert KBC Asset Management
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Editing ended on 16 November 2020. This document is a publication of KBC Asset Management NV (KBC AM). The information in it can be changed without notice and offers no guarantee for the future. Nothing in this document may be reproduced without the prior, express, written consent of KBC AM. This information is governed by the laws of Belgium and is subject to the exclusive jurisdiction of its courts.