24 Oct 2017 - 09:00 CET

Using our influence to engage on palm oil

Focus point palm oil

NN Investment Partners (NN IP) systematically integrates environmental, social, and corporate governance (ESG) aspects into the investment process to ensure it has full insight into all value drivers. It believes that companies that maintain high standards of corporate governance and sustainable business practices tend to deliver long-term shareholder value over time.

As part of its active ownership approach, NN IP engages on topics with the objective to enhance shareholder value while at the same time promoting ESG practices. Through its investments, NN IP is exposed to palm oil. Following an in-depth review of the palm oil industry, we believe we can use our influence to improve the standards in the industry.

Palm oil is a commodity which is used in many different consumer-related products, and its use has been increasing. This growth has come at a cost to society. The biggest environmental impact of palm oil production is the large-scale deforestation contributing to climate change. The sector is also exposed to several other sustainability risks, both environmental and social oriented.

As the supply chain of palm oil can be long and complex, we do not think that excluding palm oil producers is beneficial. Engagement is in our view a better approach. NN IP has developed an engagement strategy that targets not only the palm oil producers, but also the traders, processors, food producers, and retailers. Read more on the environmental and social objectives that we aim to address in this Focus Point publication.