Benxi
Projects Palm Oil

Palm oil

Over the past 20 years Aidenvironment has acquired solid and reliable knowledge of the palm oil sector. The largest palm oil dataset in the sector, our database includes over 7,000 concessions and 20 million hectares in Indonesia, Malaysia and Papau New Guinea. We conduct monthly monitoring of deforestation, peat and peat forest clearance on known oil palm concessions, and use public mill lists and trade data to trace deforestation links to domestic and international supply chains. Aidenvironment has used this data to aid some of the largest palm oil companies in Indonesia, Malaysia and Europe with the implementation of their NDPE policies.

Sustainable Transformation of the Global Palm Oil Industry

Commodities: palm oil & derivatives
Geography: Indonesia, Malaysia
Target Audience: companies across the supply chain (traders, refiners, producers, consumer brands)
Date: 2014 to present

Aidenvironment works with palm oil companies to aid the implementation of their NDPE policies, particularly applying to third-party suppliers. We have developed what is considered the largest dataset of oil palm concessions maps, mill/refinery locations and corporate ownership data. We use this data to conduct monthly monitoring of deforestation and to work with palm oil traders and consumer goods companies, enabling them to motivate growers to stop deforestation or be excluded from supply chains.

Chain Reaction Research

Commodities: palm oil, soy, cattle, farmland investments
Geography: Indonesia, Malaysia, Brazil
Target Audience: financial institutions, asset managers, investors, banks, financial regulators, companies
Date: 2014 to present

In 2014, Aidenvironment with its partners Profundo, Climate Advisers, and Green Century launched Chain Reaction Research (CRR), a program that educates financial sector actors on deforestation as a material financial risk, with a goal to motivate them to integrate sustainability in their investment criteria and demand deforestation-free production from portfolio companies. CRR makes use of a proprietary framework that includes extensive deforestation and supply chain monitoring systems, as well as a model to identify and quantify the business and financial risks associated with deforestation.

Addressing Leakage and Export Markets in the Palm Oil Sector

Commodities: palm oil & derivatives
Geography: Indonesia, Malaysia
Target Audience: companies across the supply chain (traders, refiners, producers, consumer brands)
Date: 2018 to present

Aidenvironment and its partners in the Chain Reaction Research consortium continue to investigate and report on the sustainability performance of palm oil companies and the finance flows to key market players in the palm oil industry. In 2020, CRR published a report on the palm oil spot market, a leakage market characterized by one-off purchases where suppliers in violation of buyers’ No Deforestation, No Peat, No Exploitation (NDPE) policies are able to sidestep due diligence procedures and sell unsustainable palm oil. The project aims to address the leakage gap by increasing transparency and awareness of leakage and export markets in South and East Asia. The project is funded by the David & Lucille Packard Foundation and in partnership with CRR consortium members Profundo and Climate Advisers.

Domestic Market Transformation of Indonesia’s Palm Oil Industry

Commodities: palm oil
Geography: Indonesia
Target Audience: companies, NGOs, media, local and national government, local banks, consumer groups
Date:
2018 to 2020

In 2018, Norway’s International Climate and Forest Initiative (NICFI) awarded an addendum grant to Aidenvironment for its Domestic Market Transformation project that aimed to promote the transparency, accountability, and sustainability of Indonesia's local palm oil industry. The project addresses the challenges of the leakage market in Indonesia, a domestic palm oil industry that furthers unsustainable palm oil production because the local industry has less rigorous “No Deforestation, No Peat and No Exploitation (NDPE)" compliance compared to international markets. The intervention is focused on three result areas: increasing transparency on NDPE compliance and finance flows in the palm oil industry (research), engaging palm oil producers and traders as well as their financial and CSO stakeholders (engagement), and raising awareness among local consumer groups (advocacy). Through its efforts, the project influenced domestic palm oil producers, traders, and suppliers, financial institutions, and state-owned palm oil producer Pertamina to adopt and implement NDPE policies. The project's Theory of Change also involved the empowerment and capacity building of CSO stakeholders and consumer groups to increase pressure on palm oil companies and government bodies to implement stronger forest protection policies.