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Institutional investors seek stronger palm oil standards

New York State Common Retirement Fund, four Swedish national pension funds, Allianz Global Investors and 90 other institutional investors and groups representing a combined $5 trillion in assets are calling for stronger standards from an international palm oil certification organization, said a news release Monday from the investor coalition.

The letter, signed by representatives of members of the coalition and sent Monday to Darrel Webber, secretary general of the Roundtable on Sustainable Palm Oil, based in Kuala Lumpur, said tougher standards “are essential for long-term … investments that depend on a resilient, sustainable natural capital base.”

In the letter, the signatories call on the certification organization to protect forests and peat lands for certified palm oil production and to include other environmental as well as human rights protections.

The letter was signed by Thomas DiNapoli, New York state comptroller and sole trustee of the $183.5 billion New York State Common Retirement Fund, Albany; and officials of Stockholm-based Swedish pension funds the 295 billion kronor ($34.3 billion) AP4, the 293.9 billion kronor AP2, the 284 billion kronor AP1 and the 272.6 billion kronor AP3.

Other signatories include Scott Stringer, New York City comptroller, who oversees the five pension funds of the New York City Retirement Systems, with combined assets of $163.4 billion.

Ceres, a group that includes asset owners and other institutional investors, focusing on corporate sustainability, helped coordinate the appeal through the letter.

RSPO, in a statement e-mailed to Pensions & Investments, said the organization "acknowledges the importance of the issues raised by some institutional investors and industry players in the (Ceres) letter … We are, and will continue, taking all constructive comments on board.” The statement noted that the RSPO May 5 issued a proposal on strengthening “voluntary guidelines aimed at further enhancing the existing standard’s requirements on issues such as deforestation, peatland development and indigenous peoples’ rights.” RSPO plans to present its draft later this month to its board of governors, made up of representatives of the palm oil industry, and expects to put the updated guidelines into effect later this year.