Trucost speaks at Responsible Business Forum on Food & Agriculture

This year’s Responsible Business Forum on Food and Agriculture was held in partnership with WWF Philippines on the 14 & 15 July at the Dusit Thani Hotel in Makati, Manila.

The forum explored innovative and collaborative approaches to improving agricultural productivity and environmental sustainability across key commodity value chains.

Global leaders gathered from business, government and NGOs to make recommendations for increasing agricultural productivity, whilst improving rural livelihoods and reducing environmental impacts. Working groups produced recommendations on sustainable land use, equitable opportunity for small-holder farmers, increasing productivity and improving rural livelihoods.

Speaking on the Philippines recent declaration to convert some eight million hectares of idle lands across the country into oil palm plantations, leaders of the palm oil industry cautioned the country to tread carefully in their expansion.

Discussing the challenges and opportunities of the sector, they flagged social and environmental issues that the palm oil sector faces in Indonesia and Malaysia, such as continued deforestation, increased emissions from illegal burning of trees, and the marginalisation of indigenous communities.

The working group also recommended that new companies venturing into palm oil in the Philippines be mindful of the financial consequences of operating their plantations unsustainably.

Chaoni Huang, head of business development for Asia of British environmental consultancy Trucost, explained that there are “unpriced environmental liabilities” when a firm does not strive to meet sustainability standards or improve their processes, which could eventually hurt the bottomline.

Huang, who helps organizations evaluate their operations through the value of natural capital or “making nature accountable in the market system”, cited a case study they conducted with Brazilian cosmetics firm Natura on agroforestry and monoculture systems of palm oil production.

Based on their findings, the total environmental and financial benefits of operating a sustainable plantation is three times higher than the monoculture system, she said.

Monoculture, or the planting of one crop across a plot of land, is a common agricultural practice that negatively impacts the ecological balance of the soil and greater area, as well as affecting the traditional way of planting of rural communities.

Huang also added: “Once we account for the environmental benefits I think the higher cost of RSPO production should be justified, because companies forecast business risks all the time but it’s time for them to forecast the business risk from deforestation and other environmental challenges and price that into the market,” she noted.

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