Between 2010 and 2016, 8 RSPO member banks were involved in finance to at least 4 non-RSPO member palm oil groups operating in South East Asia. Together, these RSPO banks provided corporate loans and revolving credits to the 4 non-RSPO member groups worth USD 212 million. They also held shares in these companies worth around USD 29 million.
The top 3 banks providing corporate loans and revolving credits to non-RSPO member companies are Standard Chartered (USD 26 million), HSBC (USD 72 million) and Credit Suisse (USD 94 million).
These are initial findings based on analysis of the data from the Forests and Finance website.
If a palm oil company is member of the RSPO this does not necessarily mean its operations are certified. Some companies are member for years without certifying a single hectare. Therefore, banks should not use RSPO membership as a proxy for their due diligence, as they would risk getting involved with controversial companies.
However, RSPO membership is the first step towards certification. If little else, it is a sign of acknowledgement by the company that it needs to improve sustainability aspects of its operations. Financial institutions, and especially those that are RSPO members, should therefore consider it to be an absolute minimum requirement for their palm oil clients. This requirement should apply to all the services the banks provide, including their bond and shareholding portfolios.
Furthermore, the financial research is limited to the dataset of the Forests and Finance website, which only covers syndicated financing and investments in bonds and shares. The data set is limited to only 40 major palm oil groups.