financial insitutions

Singapore Dialogue (update 1a): SIIA / Simon Tay dialogue in Singapore centered on palm oil sustainability, Indonesia extends moratorium, ASEAN banks under WWF spotlight

Yesterday, I attended the Singapore Dialogue run by Simon Tay's SIIA. Full day event on 13 May 2015 (but I couldn't stay on past 5pm as had to catch a flight) with well-rounded selection of speakers, mostly on palm oil, but also from a Kalimantan 100,000 ha carbon bank project (but not REDD+ carbon market, but seeking funding from Clinton Foundation, Google etc) and also some insights from the timber/pulp & paper sector (including swamp forest timber). Lots of interesting insights on how NGO and big corporate thinking on palm oil sustainability is evolving. More on this in due course. I also had a fascinating chat on a timber eucalyptus-rice paddy margin project with over 1.5 million trees planted and more to come.

Banks such as OCBC and HSBC also reported on their approach to sustainability - good data insights revealed by HSBC and TUK# also pointed out some of their latest data on banks role in funding the oil palm tycoons. WWF has report out on ASEAN banks (Singapore, Indonesia, Malaysia) financing of forestry-linked agro-industries - which financial institutions have policies or not.

Singapore is picking up the role as regional center to work on sustainability issues. Singapore stock exchange (SGX) also looking to setting up policy for compulsory sustainability reporting (policy due end 2015). A few years ago, it was noticeable Singapore started to bring in the big NGOs to have an office in the island state. Notable at past conference were big US NGOs flew in, and now I see they have presence in Singapore. The palm oil sustainability issue has also evolved from Europe centric (Europe NGOs) to presence of US NGOs too, some with ties to Europe (well, UK), example Forest Heroes / Catapult links with TFT to work on Indonesia Palm Oil Pledge (6 members and seeking 6 more) - UN New York Declaration. Singapore clearly seeking a meaningful role in the regional sustainability markets; so far it has the Transboundary Haze Bill, and Vivian Balakrishnan, Minister for Environment spoke vividly of opportunities for Singapore-based companies including timber verification technology and more.

For palm oil sustainability: interesting updates on sustainability policy views updates from Greenpeace Indonesia, Wilmar and insights from many more.

However, not all NGOs agree with the current approach with UN links to corporate approaches: UN bodies putting smallholders' livelihoods at risk;

And some argue that peat technical issues need to be reviewed, rather than just jettisoning the peat zones without more scientific consideration: Sarawak to host 15th International Peat Congress 2016; /khorreports-palmoil/2015/05/sarawak-to-host-15th-international-peat.html

And it's not plain sailing for plantations who've gone in with the "second wave" of heightened "three nos" on peat, deforestation and exploitation. Sector risk is of a "third wave" of rather tough to resolve social issues, which may be heightened due to the HCS / high carbon stock regimes coming into play.

The Roundtable on Sustainable Palm Oil (RSPO) has prohibited Golden Agri-Resources (GAR), one of its most prominent members, from "acquiring or developing any new areas" pending the resolution of a formal complaint against the palm oil giant in Indonesia's West Kalimantan province.  The decision by the RSPO, the world's largest voluntary certification scheme for palm oil, is a stern directive from an organization that has been criticized for failing to take action against companies that flout its standards....  Read more:<<a%20href=>">

#TUK-Profundo report on top 25 tycoon-owned Indonesia palm oil groups and their financiers:  and English language data summary paper here, and screenshot of page 13 with Figure 10 Banks providing loans to tycoon-controlled groups, 2009-2013and Figure 11 Banks underwriting share and bond issuances of tycoon-controlled
groups, 2009-2013:

Links to financing of palm oil issues - key NGOs

WWF: ASEAN regional banks and investors behind on Environmental, Social and Governance standards Posted on 13 May 2015; Singapore – A WWF report finds an alarming gap between regional ASEAN financial institutions and the environmental, social and governance (ESG) standards adopted by their international counterparts.  Moreover, WWF reports a similar shortfall exists between regional financial regulations on responsible lending guidelines and corporate sustainability disclosure requirements as compared to their counterparts in Brazil, China, South Africa and Hong Kong. The report, released today at the Singapore Institute of International Affairs’s 2nd Singapore Dialogue on Sustainable World Resources, assesses to what degree regional capital providers are factoring sustainability issues into their lending and investment activities. It argues strongly for regional financiers to act in their own long-term interests and adopt ESG practices with urgency. It also calls for sustainable banking guidelines and more prescriptive sustainability disclosure requirements to be issued by regulatory authorities across ASEAN.

Responsible palm oil financing and investment - WWF has developed a practical handbook to help financial institutions develop and implement a responsible palm oil financing and investment policy.
Many of the environmental problems caused by oil palm plantations can be avoided through the application of best management practices.  However, in many cases there are incentives for palm oil production that lead to the conversion of natural habitats, and misguided investments that support environmentally destructive forest conversion.

Financial institutions & palm oil - What are some of the major global financial institutions doing about palm oil sustainability issues? And what risks are they reducing in the process? Commercial banks are sharpening their palm oil and timber risk assessment policies plantations. Why? To avoid negative environmental and social impacts of their lending and investment activities. Some have developed written statements on palm oil.
Bank Palm oil policy: 
- Rabobank Stand-alone palm oil policy
- HSBC Part of broader Forest Land and Forest Products Sector Guideline
Financial institutions that have joined the RSPO: ANZ Banking Group Ltd, Co-operative Insurance Society, HSBC Bank Malaysia Berhad, HSBC Indonesia, International Finance Corporation, Rabobank

[Joint Statement] Briefing to banks and potential investors on the ongoing risks and outstanding social conflicts in the palm oil agribusiness sector. Briefing to banks and potential investors on the ongoing risks and outstanding social conflicts in the palm oil agribusiness sector: Golden Agri-Resources (GAR) bond offering...


Links on the moratorium and SIIA/ Simon Tay's Singapore Dialogue

Indonesia extends moratorium on forest, peatland licences Posted on May 13, 2015, Wednesday
SINGAPORE: Indonesia, through a Presidential Instruction, has extended the moratorium on new licences for the utilisation of primary forest and peatland, which expires today.
Its Deputy Minister for Environment Degradation Control and Climate Change, Ministry of Environment and Forestry, Arief Yuwono said the instruction would enable the forestry ecosystem to recover while allowing improvements to be made on its governance.
“The instruction is an instrument which will help the government to focus actions on preventive measures on forest fires, controlling the fires and improve on the law enforcement.
“I believe the enacted instruction that has been approved today for the next two years, can continue to help combat the forest fires and issues relating to it that is causing the haze,” he told reporters on the sidelines of the 2nd Singapore Dialogue on Sustainable World Resources here today.

Sustainability: A New Profit Driver?
Southeast Asia is one of the world’s largest producers of soft commodities including palm oil, rubber, and wood pulp. With Asia’s populations expected to soar, demands for these valuable resources are set to grow, leading to higher pressure on land use and climate change.
How can we cope with this explosive growth without jeopardising nature, public health and the way of life of some indigenous communities? How can we encourage more industry players – from plantation owners to processors and buyers – to address these concerns? What is the responsibility of those who trade and invest in these resources? Should governments in Asia pursue a bigger regulatory role collectively?
At the second Singapore Dialogue on Sustainable World Resources, the Singapore Institute of International Affairs will bring together leading voices from relevant stakeholders – including governmental and non-governmental organisations and companies- to present a business case for sustainable production, harvesting and financing. Centring on the mega market of Asia, the conference aims to feature the best practices in corporate sustainability, and foster more collaborations among forward-looking players.