By Jemima Garrett for Pacific Beat
Papua New Guinea's biggest palm oil producer has been named as the world's leading sustainable agricultural company by a London-based independent assessment organisation.New Britain Palm Oil, which has farms in Papua New Guinea and Solomon Islands, was ranked number one among agricultural companies.
The FFD Projects director James Hulse says it was the only company to score well in all categories.
"In terms of all of those, it is certified, it is engaging with its suppliers and it is working with the community and within the community to really try and improve best practice as to how it goes about its plantations," he said.
"New Britain Palm Oil are one of the few companies to have a fully integrated, segregated, supply chain that I believe is almost entirely RSPO certified."
The Forest Footprint Disclosure Project ranked 100 companies from every region of the world, including Colgate-Palmolive, Gucci and Heinz, in its 2012 assessment.
Backed by $US 13 trillion in invested capital, the FFD Project engages with smallholders, and works with them to improve yields and reduce the area of land that needs to be farmed.
It rates agricultural companies highly if they have independently verified sustainable certification of their products.
The FFD Project also rates the timber industry, oil and gas, cattle producers and many others.
Risky businessNew Britain Palm Oil was a foundation member of the industry certification body, the Roundtable on Sustainable Palm Oil, but it has found the process is expensive.
"I think there are financial advantage to becoming RSPO certified," Mr Hulse said.
"There have been a number of studies done that show, yes, there has been an investment but, yes, there has been a return in terms of improved yields and lower input costs."
Mr Hulse says companies need to be aware of the risks of being associated with deforestation.
"There are big reputational risks for companies. There are also legislation risks We are starting to see with logging around the world Europe the US and obviously Australia is now working on its own illegal logging laws, and we've also got operational risk.
"These are food commodities that are operating under increased supply constraints and increased demands, from population growth, from changing diet and also from climate change and it is causing a massive squeeze - you know the world missed the credit crunch but I don't think it is going to miss the commodity crunch.
"It is a well understood theme among investors. So really a lot of what we are doing is about supply chain management for companies. It is about risk management within the context of feeding the world and not expanding into deforested lands."
Carbon footprintOil palm plantations are one of the biggest threats to tropical rainforests.
Deforestation accounts for 15 per cent of the world's carbon dioxide emissions and takes a toll on biodiversity.
Big companies and their investors are increasingly seeing it as a risk to their reputation.
In June 2012 the FFD Project merged with the Carbon Disclosure Project create the world's largest natural capital disclosure system covering the carbon, water and forests.
Mr Hulse says it is important that the issues are understood separately, and that with deforestation there are global supply chains.
"A lot of companies aren't actually aware of what is going on within their supply chains," he said.
"What we would like to do is bring them together to look a little bit more realistically at how companies use natural capital and how they impact on the environment more generally.
"And the Carbon Disclosure Project obviously gives us some huge reach - it has been backed by more than half the world's investable capital. There are 4,000 companies around the world that are reporting to it. The scale of the CDP is going to be hugely important for us to get the message across."