LONDON and PARIS, 6th July 2014 -
Standard Chartered Bank today become the tenth bank to formally adopt the Soft Commodities Compact, which aligns the banking industry with The Consumer Goods Forum’s resolution to help achieve zero net deforestation
in their supply chains by 2020.
The announcement was made on Friday at a meeting in London hosted by Paul Polman, Chief Executive of Unilever, and The Prince of Wales, who brought together business leaders to move from commitments to action on removing deforestation from commodity supply chains.
Last year the volume of global palm oil production covered by corporate commitments to ‘zero deforestation’ rose to over 90%. The case for banks to support their consumer goods clients in implementing commitments that remove deforestation from their supply chains is therefore stronger than ever.
Standard Chartered’s decision to adopt the Compact means that around 20% of the market for international financing of agricultural commodities is now aligned behind the Compact’s goal.
The Soft Commodities Compact was developed by the Banking Environment Initiative
(BEI), a Cambridge Institute for Sustainability Leadership platform, and The Consumer Goods Forum (CGF), a body representing 400 of the world’s biggest consumer goods retailers and manufacturers, with over $3 trillion in combined procurement power.
Mark Devadason, Global Head of Sustainability at Standard Chartered said, “We believe adopting the Soft Commodities Compact, a client-led initiative, will help us support our clients to be here for good by transforming soft commodity supply chains to support zero net deforestation. This will promote economic and social development, and build on the outcomes we are already achieving through membership of the Banking Environment Initiative”.
Jeff Seabright, Chief Sustainability Officer at Unilever said, “There is a compelling business case for driving deforestation out of our supply chains. Not only does it reduce reputational risk and safeguard our future licence to operate, but through deep collaboration with both our suppliers and tropical forest countries, we can increase yields, improve livelihoods and secure sustainable supplies of agricultural raw materials into the future – all the while mitigating our contribution to climate change. The financial sector plays a critical role in enabling such win-win outcomes”.
Commenting on the impact of the Compact, David Nussbaum, WWF-UK Chief Executive said, “Banks can make a difference for the world’s forests. These 10 banks have set the bar for other financial institutions in terms of tackling deforestation – which is essential to avoid dangerous climate change. Action on deforestation includes requiring banking clients at least to use credible third party certifications for deforestation risk factors, for example Forest Stewardship Council (FSC) or Roundtable for Sustainable Palm Oil (RSPO) certification. We call for all banks and investors to apply similarly robust policies across their business”.
Ignacio Gavilan, Director, Sustainability at The Consumer Goods Forum said, “The global challenges business and society face today are too complex for any one player to solve by themselves, so it’s important to us that the consumer goods industry works with key intermediaries in the economy such as international banks. The BEI is providing impressive leadership by changing the norms for how banks integrate a strategic response to deforestation into their financing policies and products such as trade finance solutions”.
Andrew Voysey, Director of Finance Sector Platforms at CISL said: “On a daily basis we hear just how far the banking industry has to go to regain trust that it is serving society’s best interests. CISL’s work with banks focuses on enabling practical solutions. With the Soft Commodities Compact we are seeing new business norms and financing solutions emerge from the banking industry that help people and businesses respond to the global challenge of feeding a growing population without compromising the natural resources that communities all around the world rely on”.
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University of Cambridge Institute for Sustainability Leadership (CISL), for Banking Environment Initiative
Gemma Pryor, Media Consultant, CISL
The Consumer Goods Forum
Lee Green, Senior Manager of Communications, The Consumer Goods Forum
Notes to Editors:
Nine banks have already adopted the Compact: BEI Members Barclays, Deutsche Bank, Lloyds Bank, RBS, Santander and Westpac as well as BNP Paribas, Rabobank and UBS, who are not BEI Members.
Banks who have adopted the Compact make two principal commitments:
to finance the transformation of supply chains by working with CGF member companies to identify interventions to support the growth of commodity production meeting the CGF’s required zero net deforestation standards.
to raise industry-wide banking standards by aligning the provision of their services with the procurement policies being implemented by the CGF.
The Compact is available to download here.
The first tangible output of the Compact has been the Sustainable Shipment Letter of Credit, which is a trade finance solution backed by the IFC which enables banks to reduce the cost of importing sustainably produced palm oil into emerging markets, where the premium associated with sustainable production methods can be a barrier to uptake.
About the Banking Environment Initiative (BEI)
The Chief Executives of some of the world’s largest banks created the Banking Environment Initiative (BEI) in 2010. Its mission is to lead the banking industry in collectively directing capital towards environmentally and socially sustainable economic development. The group comprises 11 leading banks with over US$ 10 trillion of assets. Its members come from different business models and markets, but share a belief in the need for bold new leadership in directing capital towards the business models that the 21st century demands. At the heart of the group’s vision lies a simple thesis: banks work for their clients and an initiative like this will only work if it is aligned with their interests and vice versa. The BEI achieves its mission by focusing on topics where industry-wide action is needed, working in partnership with its customer base by bringing independent thinking to bear on the issues and through the active leadership of its Chief Executives. For more information, please visit: www.cisl.cam.ac.uk/banking.
About The Prince of Wales.
For over 40 years The Prince of Wales has encouraged businesses, charities, governments and other organizations to help promote sustainable ways of living and working.
The Prince of Wales continues to address many of today’s most significant environmental challenges, including climate change, sustainable agriculture, fisheries and depletion of Natural Capital, through the work of various initiatives and projects. This is often in partnership with governments, the private sector and non-governmental organizations. The Prince is Founder, Patron or President of leading sustainability charities and initiatives like the University of Cambridge Institute for Sustainability Leadership (CISL), Accounting For Sustainability (A4S)
and the International Sustainability Unit (I.S.U).
For more information about The Prince of Wales, please visit www.princeofwales.gov.uk
or contact the Clarence House Communications team on 0207 024 5510.
About Cambridge and CISL
For 800 years, the University of Cambridge has fostered leadership, ideas and innovations that have benefited and transformed societies. The University now has a critical role to play to help the world respond to a singular challenge: how to provide for as many as nine billion people by 2050 within a finite envelope of land, water and natural resources, whilst adapting to a warmer, less predictable climate.
Within the University, the Cambridge Institute for Sustainability Leadership (CISL) empowers business and policy leaders to make the necessary adjustments to their organisations, industries and economic systems in light of this challenge. By bringing together multidisciplinary researchers with influential business and policy practitioners across the globe, it fosters an exchange of ideas across traditional boundaries to generate new, solutions-oriented thinking. His Royal Highness the Prince of Wales is the Patron of CISL and plays an active role in its work.
A particular strength of CISL is its ability to engage actors across business, finance and government. With deep policy connections across the EU and internationally, dedicated platforms for the banking, investment and insurance industries, and executive development programmes for senior decision-makers, it is well-placed to support leadership in the real economy.
About The Consumer Goods Forum
The Consumer Goods Forum (“CGF”) is a global, parity-based industry network that is driven by its members to encourage the global adoption of practices and standards that serves the consumer goods industry worldwide. It brings together the CEOs and senior management of some 400 retailers, manufacturers, service providers, and other stakeholders across 70 countries, and it reflects the diversity of the industry in geography, size, product category and format. Its member companies have combined sales of EUR 2.5 trillion and directly employ nearly 10 million people, with a further 90 million related jobs estimated along the value chain. It is governed by its Board of Directors, which comprises 50 manufacturer and retailer CEOs.