Haze Puts Palm Oil ESG Practices Back Under Scrutiny

Dow Jones
Oct 05

0155 GMT - Haze puts palm oil sustainability back under scrutiny, with recurring fires highlighting the need for stronger land and fire management, MBSB Research says in a note. Malaysia recorded 93 hotspots in September, while Indonesia recorded 14,422, with Kalimantan accounting for 76.8% of the total. While sustainability certifications provide some assurance on environmental and land-management practices, their effectiveness ultimately depends on implementation on the ground, MBSB says. Fires outside plantation boundaries could also affect the industry's reputation and raise questions over smallholder compliance, it reckons. Certification alone may not shield the sector's reputation as Indonesia's B60 biodiesel ambitions boost palm oil demand, making responsible land management increasingly important as production expands, it adds. MBSB maintains a tactical positive stance on Malaysia's plantation sector.

 

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