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PNG company named as a global sustainability leader | Pacific Beat

PNG company named as a global sustainability leader

PNG company named as a global sustainability leader

Updated 6 February 2013, 18:54 AEDT

Papua New Guinea's biggest palm oil producer has been named as the world's leading sustainable agricultural company by a British-based independent assessment organisation that looks at the impact companies have on the world's remaining forests.

In its 2012 assessment the Forest Footprint Disclosure Project ranked 100 companies from every region of the world.

They included such household names as Colgate-Palmolive, Gucci and Heinz .

New Britain Palm Oil, which has farms in Papua New Guinea and Solomon Islands, was ranked number one among agriculture companies.

Presenter: Jemima Garrett

Speaker: James Hulse, Director of the Forest Footprint Disclosure Project

GARRETT: Deforestation accounts for 15 per cent of the world's carbon dioxide emmissions and takes a toll on biobiversity.

Big companies and their investors are increasingly seeing it as a risk to their reputation.

The London-based Forest Footprint Disclosure Project is endorsed by 184 investment companies, managing 13 trillion dollars worth of funds.

It rates agricultural companies highly, if they have independently verified sustainable certification of their products, they engage with smallholders, and work with them to improve yields and reduce the area of land that needs to be farmed.

James Hulse, Director of the Forest Footprint Disclosure Project, says New Britain Palm Oil was the only company to score well in all categories.

HULSE: In terms of all of those, it is certified, it is engaging with its suppliers and it is working with the community and within the community to really try and inmprove best practice as to how it goes about its plantations. New Britain Palm Oil are one of the few companies to have a fully integrated, segregated, supply chain that I believe is almost entirely RSPO certified.

GARRETT: Oil palm plantations are one of the biggest threats to tropical rainforests.

New Britain Palm Oil was a foundation member of the industry certification body, the Roundtable on Sustainable Palm Oil, but it has found the process is expensive.

James Hulse says the costs are worth it.

HULSE: It is obviously a burning question at the moment as to who pays for this is it the consumer? Is it the producer? Is it shared throughout the supply chain? I think there are financial advantage to becoming RSPO certified. There have been a number of studies done that show, yes, there has been an investment but, yes, there has been a return in terms of improved yields and lower input costs.

GARRETT: The Forest Footprint Disclosure project also rates the timber industry, oil and gas, cattle producers and many others.

James Hulse says companies need to be aware of the risks of being associated with deforestation.

HULSE: There are big reputational risks for companies. There are also legislation risks We are starting to see with logging around the world Europe the US and obviously Australia is now working on its own illegal looging laws , and we've also got operational risk. These are food commodities that are operating under increased supply constaints and increased demands, from population growth, from changing diet and also from climate change and it is causing a massive squeeze - you know the world missed the credit crunch but I don't think it is going to miss the commodity crunch. It is a well understood theme among investors. So really a lot of what we are doing is about supply chain management for companies. It is about risk management within the context of feeding the world and not expanding into deforested lands.

GARRETT: The Forest Footprint Disclosure Project has just merged with the Carbon Disclosure project. Where do you plan to take it from here?

HULSE: I think it is a really exciting move for us. It is important to look at each of these issues - we have carbon, we have water and we have deforestation. And we are looking at them individually because it is important to understand the issues and certainly with deforestation there are global supply chains. A lot of companies aren't actually aware of what is going on within their supply chains. But also what we would like to do is bring them together to look a little bit more realistically at how companies use natural capital and how they impact on the environment more generally. And the carbon disclosure project obviously gives us some huge reach - it has been backed by more than half the world's investable capital. There are four thousand companies around the world that are reporting to it. The scale of the carbon disclosure project is going to be hugely important for us to get the message across.

GARRETT: So what will it mean for companies that are slow to get on the bandwagon of sustainable agricultural produce, for instance?

HULSE: Hannah Jones, who is the V P of sustainability at Nike talks about winners, fast followers and the extinct and I think that is likely to happen. You have got the leading companies who are really integrating this into the way they do business. It is not an add-on, it is fundamental to the way they do business. Then you have a number of companies that look at the leaders and say 'Well, it looks to be working for them, there is a business case for this and there is a reputational case, there is a consumer case, let's go follow them'. And then you have a number of companies who stick their head in the sand, and some of them will be able to turn around in time and some of them will not

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