SPOTT Review and exploration of existing tools - Practitioners' & developer's perspectives

 
SPOTT Review and exploration of existing tools - Practitioners' & developer's perspectives
Review and exploration of existing tools
               SPOTT

Practitioners’ & developer’s perspectives
SPOTT Review and exploration of existing tools - Practitioners' & developer's perspectives
Ruud Hadders
                         Actiam

                        SPOTT
Why we use this tool and for which types of application?
SPOTT Review and exploration of existing tools - Practitioners' & developer's perspectives
Use of data to support transition to
sustainable palm oil
21 March 2019, FMO, The Hague

    Classification: Internal
SPOTT Review and exploration of existing tools - Practitioners' & developer's perspectives
In the news: all eyes on negative environmental and social impact

                                                       Classification: Internal   Page:   4
SPOTT Review and exploration of existing tools - Practitioners' & developer's perspectives
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
SPOTT Review and exploration of existing tools - Practitioners' & developer's perspectives
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
SPOTT Review and exploration of existing tools - Practitioners' & developer's perspectives
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 Review and exploration of existing tools - Practitioners' & developer's perspectives
Clara Melot
              Zoological Society of London

                      SPOTT
How should this tool be used and what’s behind it?
SPOTT Review and exploration of existing tools - Practitioners' & developer's perspectives
SPOTT – Developer’s perspective
       EU CoP Finance@Biodiversity: 21 March 2019
  Biodiversity risk and opportunities in high impact sectors
                         Clara MELOT

                  SPOTT.org @ZSLSPOTT
SPOTT Review and exploration of existing tools - Practitioners' & developer's perspectives
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.

 spott@zsl.org                       SPOTT.org                        @ZSLSPOTT
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