SPOTT Review and exploration of existing tools - Practitioners' & developer's perspectives
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Use of data to support transition to sustainable palm oil 21 March 2019, FMO, The Hague Classification: Internal
Our view: palm oil has a future, provided it is produced sustainably • Within our land policy, our focus is on deforestation, pollution and the rising demand for food. Social factors also play an important role, such as land rights and access to food. • Companies violating our investment principles in relation to human rights, labour rights and pollution, are therefore excluded (e.g. Astra International). • However, the often justified criticism is directed at the production method however not against palm oil itself. • Palm oil has a future, provided it is produced sustainably, a view which is supported by international organizations • These companies are therefore engaged with clear objectives and strict monitoring to track progress (see next slide). Classification: Internal Page: 5
Our role: through engagement to a sustainable trade in palm oil Banks Investors Loans Upstream Downstream Small holder Large agri- FMCG Retailers Consumers producers companies manufacturers Classification: Internal Page: 6
Our approach: data key in determining impact, risks and adaptive capacity SDG impact positive impact safe and just space Example of SPOTT indicator: Having a timebound plan Adaptive capacity Example of SPOTT for achieving 100% RSPO indicator: Risk exposure certification of estates Evidence of monitoring transition zone within 5 years deforestation unethical behavior Classification: Internal Page: 7
SPOTT – Developer’s perspective EU CoP Finance@Biodiversity: 21 March 2019 Biodiversity risk and opportunities in high impact sectors Clara MELOT SPOTT.org @ZSLSPOTT
What is SPOTT? • SPOTT is a free, online platform supporting sustainable commodity production and trade. • SPOTT assesses commodity producers and traders on the public disclosure of their policies, operations and commitments related to environmental, social and governance (ESG) issues. SPOTT.org
Assessment coverage 2018 2019 50 timber/pulp producers & traders 100 timber/pulp producers and traders – currently available – JULY 2019 70 palm oil producers & traders 100 palm oil producers, traders, refiners – currently available and crushers – NOVEMBER 2019 _ 15 rubber companies – OCTOBER 2019 120 companies in total 215 companies in total
Technical Advisory groups Palm oil: • Andy Roby, Independent Forestry Advisor • Abigail Herron - Eugenie Mathieu, Aviva Investors • Ann Weddle, NEPCon • Ben Ridley, Credit Suisse • Clotilde Henriot, ClientEarth • Gabriel Thoumi, Climate Advisers • Elizabeth Kennedy, ISEAL Alliance • Emma Keller, WWF UK • Eugenie Mathieu, Aviva Investors • Hilde Jervan, Etikkrådet • Julia Young, WWF • Naasir Roomanay, Investec Asset Management • J T Lee, Credit Suisse • Danielle Carreira and Paul Chandler, PRI • Marieke Abcouwer, ABN Amro • Peter van der Werf, Robeco • Robert-Alexandre Poujade, BNP Paribas Asset • Robert Zuehlke, Daemeter Management • Siobhan Collins, Ceres • Richard Donovan, Rainforest Alliance • Tetsuro Takase, Sumitomo Mitsui Trust Asset • Samuel Mary, PIMCO Management • Seiji Kawazoe, Sumitomo Mitsui Trust Bank Timber and pulp:
Company selection • We select companies for assessment based on the following factors: • Operations in priority countries (i.e. in areas of high biodiversity value threatened by commodity production); • Scope and scale of operations (e.g. areas of land owned or leased, revenue generated or market capitalisation); • Nominations by interested stakeholders, or companies volunteering themselves for assessment.
Methodology SPOTT assessment cycle • We engage with companies throughout the year; • SPOTT only scores information if it is publicly available; • Assessments are carried out/supervised by the SPOTT team; • All our indicators and scoring methodologies are available online.
Scope • E, S and G issues; Sustainability policy Water, chemical, waste • 120+ individual indicators; and leadership and pest management • Looking at information on Landbank, maps, FMUs, Community, land and mills and traceability labour rights operations, commitments and policies and reported progress; Deforestation and Certification biodiversity standards • No on the ground verification; HCV, HCS and impact Smallholders and • Indicators are enabled/disabled assessments suppliers based on a company’s scope of Peat, soils, fire and Governance and activities, location etc. GHG emissions grievances
Some biodiversity related indicators • #24 - Commitment to zero deforestation • #25 - Deforestation commitment applies to scheme smallholders and independent suppliers • #26 - Criteria for defining deforestation • #27 - Evidence of monitoring deforestation • #28 - Examples of habitat management and/or habitat restoration • #29 - Implementing a landscape-level approach to biodiversity conservation • #30 - Commitment to biodiversity conservation • #31 - Commitment to not endanger species of conservation concern (…) • #34 - Commitment to conduct High Conservation Value (HCV) assessments • #35 - HCV commitment applies to scheme smallholders and independent suppliers • #36 - Commitment to only use licensed High Conservation Value (HCV) assessors accredited by the HCV Resource Network's Assessor Licensing Scheme (ALS) • #41 - Commitment to the High Carbon Stock (HCS) Approach • #42 - High Carbon Stock (HCS) assessments • #43 - Commitment to conduct social and environmental impact assessments (SEIAs)
New issues to be covered in 2019 The SPOTT team consulted TAG, companies and wider stakeholders on new indicators. 2019 assessments will include: • Approach to Gender issues (pay, no-discrimination) ; • Climate Risk Assessments ; • Natural Capital Assessments ; • Tax issues ; • Timber traceability and legality.
Log-in only features • More features are available for free, in a dedicated log-in area: • Bookmark companies ; • Download assessment data in CSV and PDF ; • Compare company scores, track trends and changes over time ; Register on the free SPOTT Dashboard for extra features • Subscribe to news alerts and invitations to events and consultations.
A tool for engagement “ We hold the high calibre content in ZSL’s SPOTT indicator framework in the utmost esteem as part of ” investee engagement activities as well as integrating it into our financial analysis. • SPOTT team engagements: Abigail Herron Global Head of Responsible Investment • Up to 50% response rate from companies ; AVIVA INVESTORS “ • Scores of companies who respond progress faster (double digit vs single digit). SPOTT is a very important tool • A growing number of companies: because it provides the means to palm oil companies and their • proactively promote their SPOTT score to stakeholders to identify and ” benchmark the best examples stakeholders and in our industry. • use their assessment to structure engagement responses. Tulio Dias Brito Corporate Social Responsibility Manager, AGROPALMA GROUP
A call to action • Many investors, banks and other financiers have developed and adopted sector specific sustainability policies to address the risks associated with the palm oil industry. • Some of these requirements are a good start but will need to evolve. • Many are yet to follow, thus potentially creating ‘leakage’. • To create a level playing field for companies, financial institutions therefore need to review and update their own requirements and engage with the companies which do not meet them.
Get in touch for more information Timber & Pulp Palm oil Rubber Financial sector engagement
Developed by the Zoological Society of London (ZSL), SPOTT is a free, online platform supporting sustainable commodity production and trade. By tracking transparency, SPOTT incentivises the implementation of corporate best practice. SPOTT assesses commodity producers and traders on the public disclosure of policies, operations and commitments related to environmental, social and governance (ESG) issues. Investors, buyers and other key influencers can use SPOTT assessments to inform stakeholder engagement, manage ESG risk, and increase transparency across multiple industries. email@example.com SPOTT.org @ZSLSPOTT
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