New Palm Oil Screening Criteria

Ethical Screening is pleased to announce the launch of our latest new screening criteria, allowing investors to scrutinise company behaviour around the controversial topic of palm oil.

Palm Oil is an efficient and versatile edible oil that is found in a number of products, including food products, cosmetics and biodiesel. The rising demand for palm oil has significantly contributed to deforestation which negatively impacts global biodiversity and critical habitats, and is a major contributing factor to climate change. In addition, the production of palm oil can be associated with human rights and labour rights violations, such as poor working conditions and community displacements.

As a result of these concerns, Ethical Screening has developed Palm Oil criteria that exclude companies that are directly involved in the production, processing or manufacturing of products using palm oil. After extensive research, Ethical Screening have narrowed down sectors where palm oil use is more commonly used, such as food producers, pharmaceuticals and personal goods, as well as the slightly less obvious users of palm oil, such as oil and gas and travel and leisure. In these sectors, we will assess if a company's palm oil is used in own brand products or determine if the company has ownership of palm oil plantations. 

Ethical Screening are taking a bold approach to the palm oil issue. Our exclusion process is based around the amount of palm oil used and does not take into account any mitigating efforts, such as membership of the Roundtable of Sustainable Palm Oil. This is because we believe that the current standards relating to palm oil are not strong enough to have any mitigating impact on the negative effects of palm oil, both environmentally and socially.

Existing subscribers to the Company Ethics Database service can log in now to use the criteria in practice. Non-subscribers please contact us for further information.