Bankrolling rainforest destruction through investments in palm oil companies
Palm oil, derived from the fruit of the West African oil palm tree, is the world’s most widely traded vegetable oil commodity, and its production is projected to double over the next decade, as it is used in thousands of consumer products from baked goods and ice cream, to cleaning products and cosmetics, to biofuels.
However, palm oil comes with a high environmental and social cost: palm oil production, along with production of cattle and soy, is one of the greatest causes of tropical deforestation and land grabbing. Palm oil expansion has devastated vast areas of forest in South East Asia and is rapidly expanding across other rainforest regions in West and Central Africa and Central and South America.
In Indonesia, palm oil expansion has taken a particularly severe toll. As recently as the 1960s, about 80 percent of Indonesia was forested. Today, less than half of the country’s original forest remains. The island of Borneo, shared by Brunei, Indonesia and Malaysia, has lost 16,000 square miles of rainforest since 1973, largely due to palm oil plantation expansion. This trend is only getting worse.
Palm oil is also responsible for extensive human rights violations, ranging from corporate land grabbing of indigenous and community forests for plantations to the use of forced and child labor to violence and murder of community leaders by private armies and paramilitaries.
And one of the biggest drivers of all of this may be your retirement fund.
Institutional investors account for about 6 percent of the financing for the world’s largest palm oil traders, mostly based in Southeast Asia. In the U.S., TIAA is among the shareholders in palm oil companies, along with mutual fund managers BlackRock, Vanguard, State Street, JP Morgan Chase, Fidelity and Dimensional Fund Advisors. These U.S. investment firms are propping up abusive companies and destructive practices, but their clients often have no idea.
Simply put, companies investing for the future should not be destroying the present, and retirement funds should not destroy rainforests.
To learn if your mutual fund is exposed to palm oil or other deforestation-risk commodities, and to take action, go to DeforestationFreeFunds.org.