Page 1

Oil palm and biodiversity:

Company commitments and

reporting in 2020

Published: September 2021

Version: 1

Authors: Annabelle Dodson, Eleanor Spencer, David Johnston

Zoological Society of London

Citation: Dodson, A., Spencer, E., Johnston, D. (2021). The state of palm oil company reporting on biodiversity. SPOTT. London:

Zoological Society of London.

Available at: https://www.spott.org/news/oil-palm-biodiversity-report-2021/

Image credits: Shutterstock, Unsplash, Ian Markham, Suzanne Robberegt, Nazarizal Mohammad, David Johnston

About SPOTT

Developed by the Zoological Society of London (ZSL), SPOTT is a free online platform supporting sustainable commodity production and

trade. By tracking transparency, SPOTT incentivises the implementation of corporate best practice.

SPOTT assesses commodity producers, processors and traders on their public disclosure regarding their organisation, policies and

practices related to environmental, social and governance (ESG) issues. SPOTT scores tropical forestry, palm oil companies and natural

rubber annually against over 100 sector-specific indicators to benchmark their progress over time. Investors, buyers and other key

influencers can use SPOTT assessments to inform stakeholder engagement, manage ESG risk, and increase transparency

across multiple industries.

For more information, visit SPOTT.org.

About ZSL

ZSL (Zoological Society of London) is an international conservation charity working to create a world where wildlife thrives. From

investigating the health threats facing animals to helping people and wildlife live alongside each other, ZSL is committed to bringing

wildlife back from the brink of extinction. Our work is realised through our ground-breaking science, our field conservation around the

world and engaging millions of people through our two zoos, ZSL London Zoo and ZSL Whipsnade Zoo.

Acknowledgements

This publication was funded with the generous

support of the David and Lucile Packard

Foundation, UK aid from the UK government,

the Good Energies Foundation, and Norway's

International Climate and Forest Initiative

(NICFI), however, the views expressed do not

necessarily reflect the views of these donors.

The information in this publication, which does not purport to be comprehensive, is for illustrative and informational purposes only.

While this publication has been written in good faith it does not constitute investment advice nor does it provide recommendation

regarding any particular security or course of action. This report and the information therein is derived from selected public sources.

ZSL expressly disclaims any responsibility for the opinions expressed by external contributors in this publication. The opinions expressed

by ZSL are current opinions as of the date appearing in this material only and are subject to change without notice. No representation,

warranty, assurance or undertaking express or implied is being made that any account, product, or strategy in particular will or is likely

to achieve profits, losses, or results similar to those discussed, if any. ZSL expressly disclaims any liability arising from

use of this publication and its contents.

2

Executive summary

• We are facing a global biodiversity crisis, which threatens not only our

health, food systems and economies, but all life on our planet.

• The Fifteenth Conference of the Parties for the Convention on

Biological Diversity (CBD COP-15), to be held in 2021 and 2022, is

drawing much-needed attention to this biodiversity crisis, and it is

vital that this conference provides a real turning point in global efforts

to mitigate it. However, any efforts will depend heavily on the private

sector playing its part in demanding safeguards for biodiversity.

• Unsustainable palm oil production plays a significant role in

biodiversity loss in tropical forests, and this must be a focus area for

both the industry and its stakeholders to remedy. In order to do this,

palm oil companies and their financiers and buyers must all inform

themselves of the current state of commitments and efforts from

upstream companies to tackle biodiversity loss, and where serious

improvements are needed.

• This analysis draws on data from the 2020 SPOTT assessments of 100

palm oil producers, processors and traders, to provide an overview

of their disclosure of commitments and progress on biodiversity

protection. Findings indicate that although the majority of upstream

palm oil companies assessed on SPOTT commit to protecting

biodiversity, most fall short in reporting on implementation.

• While 71% of companies commit to conducting HCV assessments

before new development, only 23% have publicly available High

Conservation Value (HCV) assessments and management and

monitoring (M&M) plans for all estates planted since January 2015.

• Less than half of companies report multiple, externally verified

examples of species and/or habitat conservation management in their

set-aside areas or in the surrounding landscape, or describe activities

with stakeholders to support positive environmental or social

outcomes associated with palm oil production.

• ZSL recommends a range of actions to better-protect biodiversity in

oil palm landscapes. It is the responsibility of all actors involved –

from the producer through to its downstream buyers, investors and

lenders – to ensure clear and robust policies on protecting species

and landscapes are in place as a first step, but then crucially, to ensure

these are followed up with the implementation of concrete and

effective actions on the ground.

• We appeal to buyers and financial institutions, who are exposed to

the Environmental, Social and Governance (ESG) risks of palm oil

companies and can exercise considerable influence over

their management, to:

• Quantify and disclose their palm oil exposure.

• Publish ESG commitments and implementation activities, and

demand upstream supply chain actors to do the same.

• Incorporate biodiversity impact mitigation into all

decision-making processes.

3

Oil palm and biodiversity: Company commitments and reporting in 2020

Box 1: Defining biodiversity

The Convention on Biological Diversity (CBD) defines

biodiversity as the "variability among living organisms

from all sources including, inter alia, terrestrial, marine and

other aquatic ecosystems and the ecological complexes of

which they are part; this includes diversity within species,

between species and of ecosystems." ¹

The International Union for Conservation of Nature (IUCN)

describes biodiversity – the diversity of life on earth – as

"integral to a healthy and stable environment. Diversity

of life ensures environmental resilience, provides humans

with the life systems on which they rely, and enriches

life on earth." ²

4

Oil palm and biodiversity

Introduction

Life on our planet is declining faster now than at any other point

in human history.³ ZSL and WWF’s latest Living Planet Report,

which provides a measure of the state of global biodiversity,

determined that humans reduced the world's wildlife

populations by more than two thirds during a period of just 50

years, between 1970 and 2016.⁴ This extremely grave finding

is yet more evidence that we are facing a crisis on a global scale.

While governments, businesses, financiers and the public are

growing more aware of the risks that declining biodiversity

poses and what it means not just for nature, but for societies

and economies across the globe, urgent action is required to

slow down the mass extinction of Earth’s wildlife.

Biodiversity (see box 1) underpins our economies at local,

national and global levels. According to the World Economic

Forum, approximately $44 trillion USD of economic value

generation (over half of the world’s total GDP) is at least

moderately or highly dependent on ecosystem services, and

transitioning to more nature-positive models could deliver

$10.1 trillion USD in business opportunities, and 395 million

jobs by 2030.⁵ The recent Dasgupta review on the Economics

of Biodiversity, commissioned by the UK Treasury, has provided

further evidence for this discussion, laying out clearly the failure

of current systems to properly value, invest in and protect

nature, and the global economic imperative of doing so from

now on: “Just as diversity within a portfolio of financial assets

reduces risk and uncertainty, so diversity within a portfolio of

natural assets increases nature’s resilience to shocks, reducing

the risks to nature’s services. Reduce biodiversity, and nature

and humanity suffer.” ⁶

Financial institutions should be aware not only of their exposure

to biodiversity-related risks, but also that their financing

decisions may have serious impacts on nature and humanity.

While measuring these impacts is complex, investment and

lending approaches seeking to address biodiversity loss

are gaining prominence.⁷ A recent study by Credit Suisse

and Responsible Investor, based on the survey responses

of 327 asset owners and asset managers, found that 67%

reported they are addressing biodiversity to some extent

in their portfolios (mostly through screening or

engagement), and more than half thought that biodiversity

would be one of the most important topics in the investment

community by 2030.⁸ The launch of the Taskforce on Nature-

related Financial Disclosures (TNFD) in June 2021 is also a

clear sign that the risks of not protecting biodiversity are being

taken seriously by major corporate and financial-sector actors.

Additionally, September 2020 saw the launch of the ‘Finance for

Biodiversity Pledge’, along with a call on global leaders to agree

to effective measures to reverse nature loss. The 37 financial

institutions which have signed the pledge since its launch

represent over €4.8 trillion EUR in assets and have committed

to protect and restore biodiversity through their finance

activities and investments.⁹

One major milestone that is drawing attention to the

biodiversity crisis is the Fifteenth Conference of the Parties for

the Convention on Biological Diversity (CBD COP-15), to be held

in 2021 and 2022, at which the Parties are expected to adopt a

post-2020 global biodiversity framework for 2021-2030. Given

that not one of the Aichi Biodiversity targets set for 2011-2020

was fully met, and that the Intergovernmental Science-Policy

Platform on Biodiversity and Ecosystem Services (IPBES) has

warned that 25% of assessed species are at risk of extinction

within the next decade,³ it is vital that COP-15 provides a real

turning point in global efforts to mitigate this crisis. However,

any efforts will depend heavily on the private sector playing its

part in demanding safeguards for biodiversity.

5

Company commitments and reporting in 2020

ZSL's Living Planet Index (LPI) tracks the abundance of

almost 21,000 populations of mammals, birds, fish, reptiles

and amphibians around the world. The 2020 global LPI

shows an average 68% decline in monitored populations

between 1970 and 2016 (range: -73% to -62%).

Palm oil and the biodiversity crisis

Palm oil is a useful and versatile commodity globally, and

the industry provides employment and supports economic

development in several countries. However, unsustainable oil

palm cultivation has serious social and environmental costs,

including various direct and indirect impacts on biodiversity.

This not only threatens individual species with extinction, but

also puts at risk the ecosystem services biodiversity underpins,

such as nutrient cycling, water purification, climate regulation

and the provision of food, fuels, and medicines. In Indonesia

and Malaysia in particular the impacts have been severe,

with unsustainable palm oil production contributing to the

depletion of crucial habitat such as the Leuser ecosystem in

Sumatra, and to major declines in populations of orangutans,

gibbons, rhinos, tigers and elephants, among other species.

As oil palm plantations expand increasingly into new frontiers,

particularly within Africa and South America, these impacts

will continue to stack up. According to the IUCN, oil palm

cultivation already threatens at least 193 species listed as

Critically Endangered, Endangered or Vulnerable, and its

future expansion has the potential to affect 39%, 54%, and

64% respectively of all threatened amphibians,

mammals and birds.¹⁰

Direct impacts

The IPBES reports that land-use change has had the largest

negative impact on global biodiversity loss and ecosystem

degradation since 1970, with agricultural expansion the

most common form of land-use change.³ Oil palm cultivation

has played a major role in the decline of species diversity

and abundance, primarily through the associated clearing

of natural forests. Land clearance destroys and fragments

forest ecosystems, leaving small and isolated forest patches

with remnant plant and animal populations. This leads

to substantially reduced genetic variation in remaining

populations.¹¹ Forest fragments are also left more exposed

to ‘edge effects’ – such as changes in microclimate, canopy

structure, species abundance and composition, and increased

exposure to human disturbance – meaning they continue to

degrade further and more quickly than larger areas of forest.

These fragments support fewer species, with forest specialists,

endemics (i.e. species that globally only occur in a particular

area), large-range species and species of conservation

concern suffering the greatest impacts.¹² Sumatran tigers

are one example of such species, and are now believed

to number as few as 290 individuals in the wild, split into

smaller populations that are isolated from each other and so

cannot inter-breed. It is possible only two robust breeding

populations of Sumatran tigers remain in the world.¹³ Oil palm

plantations themselves also support far fewer species than

natural forests – one review of studies in Malaysia suggested

that 80 percent of the species found in forest habitats were

not found in oil palm concessions.¹⁴

The use of fire to clear land also contributes significantly to

ecosystem degradation, as well as releasing vast amounts of

carbon dioxide, methane and other greenhouse gases into the

atmosphere, especially when carbon-rich peatland is burned.

Various other aspects of palm oil production can contribute

to emissions, including use of fertilisers and Palm Oil Mill

Effluent (POME) ponds. Thus, the direct impacts of tropical

forest clearance and palm oil production on biodiversity

are compounded by the cumulative impacts of the climate

changes these activities contribute to, which are already

demonstrably affecting ecosystems and species in the tropics.

Other direct impacts of unsustainable palm oil production

include pollution caused by run-off of chemical fertilisers

and pesticides from plantations, and increased erosion and

changes to the ecology of soils.

Indirect impacts

Various indirect impacts result from changes in the behaviour

of people and wildlife that unsustainable development of oil

palm can lead to.

The displacement of animals from their natural habitats

often brings them into conflict with people, as they move

into plantations or inhabited areas in search of food or when

moving between isolated forest patches. This human-wildlife

conflict can lead to wildlife being harassed, injured or killed,

and indeed has been a major contributor to the decline in

orangutan populations. One study across 687 villages in

Kalimantan, Indonesia, found an average of 1,950–3,100

orangutans killed per year due to conflict and hunting.¹⁵

Hunting is another major impact that can result from oil palm

development, although the drivers behind it can be varied

and complex. Communities living in or near tropical forests

may depend on hunting for subsistence purposes, and if oil

palm development removes or reduces their access to other

food sources without providing them with food security, the

hunting pressure on local species may increase. Equally, this

local hunting pressure can be increased by the movement

of oil palm plantation workers into previously less populated

areas, if company employees hunt in and around concessions.

The wildlife trade is another powerful driver of hunting in

tropical forest landscapes, and certain species are particularly

in demand, making them more vulnerable to this threat. The

development of road infrastructure into forest areas for oil

palm development makes access to wildlife easier for hunters,

as well as increasing the likelihood of wildlife being killed by

vehicles. One study found that the most common cause of

animal death in oil palm landscapes was due to illegal hunting,

both for subsistence purposes and the illegal wildlife trade.¹⁶

6

Oil palm and biodiversity

Pushing for industry progress

Simply avoiding the use of palm oil and replacing it

with alternatives is not currently a viable solution.

Demand for vegetable oils is high and continuing to

grow quickly, and given the relative efficiency of the oil

palm’s yield per hectare compared with other major

oil crops – oil palm produces approximately 35% of

vegetable oils globally, on <10% of the land given to oil

crops – meeting this demand without palm oil would

likely require a significant increase in the global land area

used for vegetable oil production.¹⁷ This would expand

and displace many environmental and social impacts

rather than removing them, and could increase overall

biodiversity loss. Palm oil sustainability is therefore

crucial, and all stakeholders in the industry must ensure

they are working to minimise the environmental and

social risks linked with its production. In addition to the

clear conservation and human rights imperatives for

improving palm oil sustainability, a failure to minimise

negative impacts on biodiversity also exposes producers

– and their downstream buyers and investors – to

reputational, physical, market, legal and financial risks.¹⁸

In recent years, a range of approaches have been

committed to by palm oil companies and their

stakeholders to try and improve sustainability within

the industry. This report provides an overview of the

disclosure of commitments and progress on biodiversity

protection by palm oil companies assessed on SPOTT

in 2020, and provides recommendations for producers,

downstream companies and financial institutions.

7

Company commitments and reporting in 2020

i. See more on SPOTT here: http://www.spott.org ii. See SPOTT's assessment criteria here: https://www.spott.org/spott-methodologies/ iii.For example, see recent

evaluation of certifications schemes by Greenpeace International https://www.greenpeace.org/international/publication/46812/destruction-certified/, and EIA

International reports on auditing processes under the RSPO https://eia-international.org/report/who-watches-the-watchmen-2/

INDICATOR ID

(2020)

INDICATOR TITLE

DISCLOSURE TYPE

(see box 2)

8

Collaboration with stakeholders to reduce negative environmental or social outcomes

associated with palm oil production

Practice

17

Conservation set-aside area, including HCV area (ha)

Organisation

62

Implementing a landscape or jurisdictional level approach

Practice

63

Commitment to biodiversity conservation

Policy

65

Identified species of conservation concern, referencing international or national sys-

tem of species classification

Practice

66

Examples of species and/or habitat conservation management

Practice

67

Commitment to no hunting or only sustainable hunting of species

Policy

69

Commitment to conduct High Conservation Value (HCV) assessments

Policy

72

High Conservation Value (HCV) assessments for all estates planted since January 2015 Practice

73

High Conservation Value (HCV) management and monitoring plans for all estates

planted since January 2015

Practice

74

Commitment to only use licensed High Conservation Value (HCV) assessors accredit-

ed by the HCV Resource Network's Assessor Licensing Scheme (ALS)

Policy

76

Satisfactory review of all High Conservation Value (HCV) assessments undertaken

since January 2015 by the HCV ALS Quality Panel

Practice

SPOTT reporting 2020 – indicators and analysis

SPOTTi is a free online platform that assesses forest-risk

commodity companies on their public disclosure regarding their

organisation, policies, and practices related to environmental,

social and governance (ESG) issues.¹⁹ SPOTT scores palm oil,

natural rubber and tropical forestry companies annually against

over 100 sector-specific indicators. This supports constructive

industry engagement with the industry by investors, ESG

analysts, buyers and other supply chain stakeholders – those

with the power to influence companies to increase disclosures

and improve their practices on the ground.

This analysis draws on data from the 2020 SPOTT assessments

of 100 palm oil producers, processors and traders. Arguably,

most of the 180 indicators companies were assessed against

on SPOTT in 2020 have implications for the protection of

biodiversity. For this analysis, however, this report focuses

on those most linked to direct management and monitoring

of biodiversity and habitats. The following SPOTT palm oil

indicators from the 2020 framework have been

used for this analysis:

The SPOTT results show that companies vary significantly in

the transparency and strength of their sustainability reporting.

To allow SPOTT users to better understand where companies

currently are and how they are progressing, indicators are

separated into three groups: Organisation, Policy and Practice.

The SPOTT indicator framework places emphasis on assessing

progress reported by companies in implementing individual

commitments, differentiating between two levels of reporting

on implementation: self-reported practice and externally

verified practice. Within these Practice indicators, ZSL places

greater weight on externally verified information, while still

rewarding companies for self-reported progress.

For a number of Practice indicators that align with the RSPO

Principles & Criteria (see box 3), growers that have any land

certified under the RSPO automatically receive one full point

for progress that is externally verified. Some Policy indicators

are also awarded automatic points based on RSPO certification

if the company is an RSPO member and has at least 75% of its

landbank RSPO-certified, and a time-bound commitment to

certify its remaining landbank within five years.

The focus of the SPOTT assessments is on the transparency

of informafion, as this is key to sustainability in forest-risk

commodity producfion. The following results therefore only

consider policies and reporfing that are made publicly available

and meet the assessment criteria.ii It should be kept in mind that

there may be cases where a company does not score points for

an indicator but does in fact have a relevant policy or acfivifies

in place that it has not made publicly available.

8

Oil palm and biodiversity

Box 3: Certification and biodiversity

Certification has become a widely used tool for tackling

environmental and social impacts associated with

forest-risk commodities, including palm oil. Views vary

on the effectiveness both of individual schemes and of

certification as an approach, and there are significant

challenges that still need addressing, particularly

regarding assurance and auditing.iii However, while it

cannot provide a full solution in itself, certification is a

key tool for improving sustainability in the palm oil sector,

and one which all relevant stakeholders should keep

working to improve.

The Roundtable on Sustainable Palm Oil (RSPO) is the

largest global certification scheme for sustainable palm

oil, currently with over 5,000 members and certifying 19%

of the world’s palm oil. The RSPO Principles and Criteria

(P&C) 2018, against which producers are audited, cover

multiple elements relevant to biodiversity conservation,

including requirements for no deforestation and the

protection of HCV and HCS forest, no clearing of land

using fire, and reducing the use of chemical pesticides.

According to a 2019 comparison by IUCN NL²⁰ of the five

standards with the biggest market share in certified palm

oil production, the RSPO P&C 2018 scored the highest in

terms of biodiversity protection and level of assurance.

This was followed by International Sustainability and

Carbon Certification’s (ISCC) EU and Plus certification

systems, and the Sustainable Agriculture Network (SAN)

2017 standard. The Indonesian Sustainable Palm Oil (ISPO)

and Malaysian Sustainable Palm Oil (MSPO) standards

were scored as the weakest.

Box 2: SPOTT Indicator Framework

Organisation: The transparency and content of

company disclosure regarding its operations, assets and

management structure.

Policy: The transparency and content of company

disclosure regarding the policies, commitments and

processes it has to guide its operations and practices

on the ground.

Practice: The transparency and content of company

disclosure regarding activities it undertakes, in order to

actively progress towards its targets and implement its

policies and commitments on the ground.

• Self-reported: Information that has been reported by

the company, without external verification

• Externally verified: Information reported by the

company has been verified by a second or third-party,

or has been audited by a certification body.

9

Company commitments and reporting in 2020

How are upstream palm oil companies protecting biodiversity?

The majority – 54/79 (68%) – of companies assessed on SPOTT

make a commitment to biodiversity conservation within

their own operations. However, few report clearly on the

activities relating to the implementation of this commitment.

Biodiversity protection requires a whole range of approaches,

from setting aside important areas within a concession

boundary, to habitat management and restoration, species

monitoring and stakeholder engagement. Below we explore in

more detail how companies assessed on SPOTT are putting this

commitment into practice.

Identifying Conservation Priorities

In order to protect biodiversity from the impacts of oil palm

development, a producer must first thoroughly survey and

identify key species, habitats and ecosystem services in and

around its concession area. This is crucial for determining what

conservation management practices are needed, as well as to

provide baseline data for assessing their effectiveness in the

future. Just over half of companies assessed (43/79; 54%) have

identified species of conservation concern within or around

their operational area, referencing an appropriate system

of classification (see box 4), and have had this information

externally verified. A further eight companies (10%) have

identified species but without external verification of the data.

Before continuing with any development, a company must

first set aside important areas for conservation, to ensure they

are not included in clearance, planting or construction. Areas

can be set aside for many different reasons, such as to protect

endangered species, standing forest, water courses or fragile

soils, or to maintain connections between other protected

areas, and collectively this set-aside land is a valuable

conservation asset. In total, 48/79 (61%) companies report

recenti figures on their landbank set aside for conservation,

totalling almost 1 million hectares. On average this represents

14% of these companies’ reported total landbanks controlled

for palm oil production.

A key framework for assessing and deciding upon which areas

to set aside is the High Conservation Value (HCV) approach

(see box 5). The HCV approach has widespread recognition

in the palm oil sector – 56/79 (71%) companies commit to

conducting HCV assessments before new development.

Box 4: Classification of species’ conservation status

There are various systems for classifying the conservation status of species, and it is important that palm oil companies use an

appropriate system when assessing species found in their operations.

The International Union for Conservation of Nature (IUCN) Red List of Threatened Species is the world’s most comprehensive

information source on the global conservation status of animal, fungi and plant species, and is a robust classification system for palm

oil companies to refer to. The Red List provides information about range, population size, habitat and ecology, use and/or trade,

threats, and conservation actions that will help inform necessary conservation decisions. It divides species into nine categories: Not

Evaluated, Data Deficient, Least Concern, Near Threatened, Vulnerable, Endangered, Critically Endangered, Extinct in the Wild and

Extinct. Currently, there are more than 35,500 species listed as threatened with extinction on the IUCN Red List.²¹

The IUCN’s Regional and National Red Lists provide an equivalent method to assess the conservation status of species but at a

more granular local, national or regional scale. These can also be very valuable for informing species assessment, management and

monitoring in oil palm concessions.²²

CITES (the Convention on International Trade in Endangered Species of Wild Fauna and Flora) is an inter-governmental agreement

aiming to ensure that international trade in wild animals and plants does not threaten their survival. There are currently 183 parties

to CITES, protecting over 38,700 species against over-exploitation through international trade. Species are listed in three CITES

Appendices, according to how threatened they are by international trade and the degree of protection they need. Appendix I includes

species threatened with extinction, where trade is permitted only in exceptional circumstances. Appendix II includes species not

necessarily threatened with extinction, but in which trade must be controlled in order to avoid utilization incompatible with their

survival. Appendix III contains species that are protected in at least one country, which has asked other CITES Parties for assistance in

controlling the trade. Classifying species by CITES Appendices is another useful way in which palm oil companies can

indicate conservation status.²³

i. ‘Recent’ here meaning data not more than two years old at the time of assessment.

10 Oil palm and biodiversity

However, evidence of this approach being implemented is

much lower – only 16/69 (23%) companies assessed clearly

have publicly available HCV assessments for all estates

planted since January 2015. This figure is higher for RSPO

grower members (15/36, 42%), but still concerningly low

given the emphasis RSPO membership and certification

places on transparency.

In 2014, the HCV Network launched the Assessor Licensing

Scheme (ALS) (see box 5), to help ensure the quality of HCV

assessments. Having a satisfactory review confirms that the

reports are of sufficient quality and meet key criteria, such

as ensuring the methodology used to identify HCVs was

adequate. Without robust identification of HCVs, negative

impacts on biodiversity and local people cannot be properly

managed. Again, we see here a disparity between company

commitments and results – 48/79 (61%) companies commit

to only use licensed HCV assessors accredited by the ALS, but

only 15/69 (22%) have a review marked as ‘satisfactory’ by

the ALS for all of their HCV assessments.

Box 5: The HCV approach

The concept of ‘High Conservation Value’ (HCV) areas was first used in forestry, but is now widely implemented across various soft-

commodity sectors, and is a key component of several voluntary certification schemes, including the RSPO.

The HCV approach is a practical tool for identifying and protecting biological, ecological, social and cultural values ‘of outstanding

significance or importance’ in production landscapes, and incorporates a precautionary approach and consideration of the wider

landscape context within which HCVs are identified. There are six categories used to classify HCVs:

HCV 1: Concentrations of biological diversity, including rare, threatened or endangered species

HCV 2: Landscape-level ecosystems and mosaics, including intact forest landscapes

HCV 3: Rare, threatened, or endangered ecosystems, habitats or refugia

HCV 4: Basic ecosystem services in critical situations, including water catchments

HCV 5: Sites and resources fundamental for satisfying the basic necessities of local communities or indigenous peoples

HCV 6: Sites, resources, habitats and landscapes of global or national cultural, archaeological or historical significance

The HCV Network²⁴ is a member-based organisation that oversees development and coordination of the HCV approach, providing

guidance and quality-checking. The HCV Network runs the Assessor Licensing Scheme (ALS), which issues licenses to HCV and HCV-

HCSA assessors, and monitors the quality of their reports through desk-based evaluation by a Quality Panel. HCV reports must obtain

a ‘Satisfactory’ marking, with three attempts to attain a satisfactory outcome permitted per report. Since 2015, the RSPO has required

its oil palm grower members to hire licensed assessors to conduct HCV assessments before any new planting can be undertaken, and

under the 2018 P&C, growers are required to undertake integrated HCV/HCSA assessments.²⁵

11

Company commitments and reporting in 2020

Management and monitoring

Once conservation areas have been set aside, effective

management and regular monitoring is needed to ensure that

these areas do not degrade over time, and that their critical

environmental and social values are maintained or enhanced.

Adaptive management, in which conservation management

activities are informed by monitoring outputs, is an important

part of this. It allows plans to be regularly reviewed to assess

their effectiveness, and adjusted to respond to changing

circumstances or new findings, to ensure the most appropriate

management activities are used.²⁶ This can also help to reduce

company costs and ensure optimal use of resources.

As part of the HCV approach, the findings of an HCV

assessment should be used to design and implement HCV

management and monitoring (M&M) plans to ensure

identified HCVs continue to be maintained or enhanced.i

Disclosure of HCV M&M plans helps key stakeholders,

including downstream buyers and financiers, understand

how companies are implementing their commitments to

protect HCV areas and the biodiversity they support. Only

15/36 (42%) RSPO grower members, and only 16/69 (23%)

companies assessed overall, have publicly available HCV

M&M plans or recommendations summaries for all estates

planted since January 2015. An additional eight companies

(12%) have externally verified HCV management and

monitoring plans or recommendation summaries covering

some new plantings, or not clearly covering

all new plantings.

Both within and outside of HCV areas, companies should aim

to maintain the quality of natural habitat and protect species

in any areas under their management. However, only 39/79

(49%) companies report multiple, recent and externally

verified examples of species and/or habitat conservation

management in their set-aside areas or in the surrounding

landscape. A further seven (9%) report comprehensive, self-

reported information.

‘No Hunting’ policies should extend across the entire scope

of a company’s operations, from plantations to conservation

areas, and should allow for sustainable hunting by local

communities for subsistence purposes that does not cause

decline of local species populations, if appropriate. Only

30/79 (38%) companies commit to no hunting of all species

or only sustainable hunting by local communities for

subsistence purposes, while 16 companies (20%) make a

weaker commitment, either not covering all operations

(e.g. commitment only covers HCV areas) or not covering all

species (e.g. protected species only).

i Detailed guidance for the management and monitoring of HCVs is provided by the HCVRN (Brown & Senior 2014). Brown, E. and M.J.M. Senior. 2014

(September). Common Guidance for the Management and Monitoring of High Conservation Values. HCV Resource Network. https://hcvnetwork.org/wp-content/

uploads/2018/04/HCV_Mgmt_Monitoring_final_english.pdf

12 Oil palm and biodiversity

Patrols and on-the-ground monitoring

Implementing regular and thorough patrols of priority areas

is an important management and monitoring tool, and from

a review of company reporting on relevant indicators the ZSL

team found at least 23 of the 46 (50%) companies reporting

comprehensively on species and habitat management

mention conducting patrols as part of their management

of conservation set-aside areas, with 14 (30%) of these

specifically mentioning this as part of their strategy to

implement their no hunting policies.

One way to maximise the effectiveness of patrols is through

the use of SMART (Spatial Monitoring and Reporting Tool),²⁷

developed by a partnership of conservation agencies,

including ZSL. SMART was originally developed to support

protected area monitoring and management, and enables

the collection, storage, communication, and evaluation of

ranger-based data. Information on patrol efforts – such as

time spent, areas visited and distance covered – helps to

improve efficiency of patrols, and patrol results and threat

levels help to improve protection of wildlife and their habitats.

The SMART approach involves use of free SMART software

alongside capacity building and site-based protection

standards,²⁸ and SMART’s mobile data collection capabilities

allow rangers to easily gather needed data. ZSL also developed

the HCV Threat Monitoring Protocol, to be used in conjunction

with SMART, as a way to systematically monitor all HCV

areas using standardised patrol methods to identify and

analyse threats and understand the species present to help

meaningfully manage HCV areas.²⁹ This system has been

shown to improve both the efficiency and effectiveness

of HCV management.

Community engagement

A critical and often under-utilised tool for monitoring and

managing biodiversity and set-aside areas is the meaningful

consideration and inclusion of local communities in the

process.³⁰ Local people living in or near set-aside areas should

be involved in both the development and implementation

of management and monitoring plans, and ongoing, clear

communication is key. As a minimum, communities should

be thoroughly informed of areas designated as conservation

set-asides and what this means in practice. In many

cases communities may be well-positioned to support on

management activities if they are willing to, such as patrolling

set-aside boundaries, monitoring species populations, or

reporting signs of encroachment. This is more complicated

where community needs may conflict with biodiversity

protection – for example, if a company concession contains

13

Company commitments and reporting in 2020

endangered species (HCV 1), but these are also important as

a food source for local community members (HCV 5). In cases

such as these, it is particularly important that development of

management approaches fully includes the local community,

and a range of measures may be needed to properly protect

both HCVs³⁰ – for example, in this case, by combining

awareness-building and anti-hunting measures with provision

of appropriate sources of alternative protein. Of the 46 SPOTT

companies reporting comprehensively on species and habitat

management, 26 (57%) explicitly report implementing some

form of community engagement as part of this.

Remote sensing

Remote sensing can be particularly useful for monitoring

HCVs 2 and 3, though can also be used to monitor the habitat

of HCV 1 species and in some cases the status of HCV 4.³¹ A

number of platforms exist to help with this, such as Global

Forest Watch, Satelligence, Starling and MapHubs, and some

companies have built their own monitoring platforms. This

type of technology can be used to monitor changes in land

cover and detect disturbances such as non-compliant forest

clearance or fires, and satellite or drone imagery can in some

cases help to record species sightings or support in estimating

population sizes. Remote sensing analysis should be followed

up by ground truthing to ensure the data has been interpreted

correctly.i Of the 46 companies reporting comprehensively,

only 18 (39%) report using remote sensing or mapping data as

part of their species and habitat management.

Landscape-level approaches

Landscape-level management approaches, which involve

governments, companies, communities and other key

stakeholders across a landscape, are crucial for protecting

species and ecosystems both within and beyond the

boundaries of company concessions. They can help maintain

and enhance HCV areas beyond concession boundaries, taking

into account habitat connectivity, species movement, water

catchments and other landscape-level factors.³² Research by

SENSOR suggests that forest fragments less than 1,000 ha

in size support only 50% of forest animal species,³³ and as

conservation areas within a company’s palm oil operations can

be relatively small and fragmented, it is important to connect

these habitats to each other and to the wider landscape in

order to support viable genetic populations and large-range

species. These ‘wildlife corridors’ also reduce the chances

of human-wildlife conflict, by allowing species to travel

undisturbed between forest patches without having to cross

plantation areas or villages. Protection of peatland is also

more effective when done at a landscape scale, as the entire

peat dome is connected and must be maintained as a whole

to prevent degradation.³⁰ A total of 47/100 (47%) companies

assessed on SPOTT incorporate consideration of a landscape

approach, though the majority of these are awarded points

due to their RSPO certification status. Only eight companies

explicitly refer to incorporating a landscape approach, and

only two of these have this information externally verified

by a second or third-party separately from RSPO certification.

Given the urgent need for landscape approaches in palm oil

production landscapes, and particularly considering their

collaborative nature, this is a discouraging trend to see.

Collaboration

Collaboration on conservation efforts with other stakeholders

outside the supply chain – such as governments, NGOs

and academic institutions – can allow for more effective

conservation and scaling up of impacts, as well as providing

companies with significant benefits in access to relevant

expertise, and cost and time savings through the sharing of

efforts and management responsibilities.³⁰

Landscape or jurisdictional approaches, for example,

depend upon strong collaboration with local government,

communities, and other companies operating in the area. At

a smaller scale, working with communities within or adjacent

to company concessions to patrol and protect HCV set-

asides is another important form of collaboration. Another

example would be working with a university or specialist

NGO to study an endangered species or habitat within the

company’s concession – this allows gathering of valuable data

to inform conservation research, but can also provide the

company with important insight for their management and

monitoring efforts. Despite these important benefits, less

than half (45/100; 45%) of companies describe activities with

stakeholders (governments/NGOs/academic institutions)

to support positive environmental or social outcomes

associated with palm oil production, such as conservation

projects, jurisdictional approaches, sectoral initiatives, multi-

stakeholder or community collaborations, or strengthening

of certification schemes.

Leading companies should also share their knowledge of

effective M&M strategies with others, to help growers

overcome challenges in managing HCVs. This can be done

through training programmes and mentoring of HCV staff.

i The HCV Network’s Common Guidance for Management & Monitoring of High conservation Values provides more information on the use of remote sensing for

HCV M&M. https://hcvnetwork.org/wp-content/uploads/2018/04/HCV_Mgmt_Monitoring_final_english.pdf.

14 Oil palm and biodiversity

15

Company commitments and reporting in 2020

Conclusion and recommendations

Given the critical environmental and social impacts

associated with biodiversity loss, it is crucial that palm

oil companies work to minimise the risks to biodiversity

on and around their plantations or those of their

suppliers. However, although the majority of upstream

palm oil companies assessed on SPOTT commit to

protecting biodiversity, most fall short in reporting on

implementation. While many companies (71%) commit to

conducting HCV assessments before new development,

only 23% have publicly available High Conservation Value

(HCV) assessments and M&M plans for all estates planted

since January 2015. Less than half of companies report

multiple, externally verified examples of species and/or

habitat conservation management in their set-aside areas

or in the surrounding landscape, or describe activities

with stakeholders to support positive environmental or

social outcomes associated with palm oil production.

We recommend the following actions be

implemented by palm oil producers, supply chain

companies and financiers:

Oil palm and biodiversity

16

Downstream buyers should:

• Develop strong, clear biodiversity policies that apply to all

of their palm oil suppliers.

• Assist with capacity building of supplier companies and

smallholders to help them implement best practices in

biodiversity protection.

• Assess and engage with all suppliers to ensure adherence

to strong biodiversity policies.

• Support physical RSPO-certified palm oil through sourcing

decisions and through active participation as RSPO

members, to strengthen the organisation and support

implementation of the standards.

• Support ZSL’s work in engaging with the palm oil sector by

signing up to our SPOTT Supporter Network, and calling for

increased transparency in commodity sectors to promote

sustainable production and trade (https://www.spott.org/

supporter-network/).

Palm oil producers should:

• Put clear and robust policies in place relating to biodiversity

protection and the procedure for identifying priorities,

including commitments to identify species of conservation

concern in their operations, to conduct HCV assessments

prior to any development, and to use licensed HCV

assessors accredited by the ALS.

• Report clear data on the extent and type of areas set aside

for environmental or social reasons in their concessions.

• Make their HCV M&M plans, or summaries of these,

publicly available.

• Collaborate with external expert stakeholders where

relevant, to inform their management and monitoring

practices. This could include using external tools, such as

SMART, to promote effective monitoring

and adaptive management.

• Engage with local communities and invite their

participation in biodiversity protection, including in the

development and implementation of HCV M&M plans.

• Consider use of a landscape or jurisdictional approach

where appropriate, incorporating landscape-level

management and monitoring of HCVs.

• Incorporate use of remote-sensing technology where

possible, to support monitoring of all operations for

deforestation and fires.

• Share knowledge and experience with others in the

industry, and particularly those operating within the

surrounding landscape, on effective M&M strategies,

to support improved biodiversity protection

throughout the industry.

Banks and investors should:

• Assess the impact of their financing in the palm oil sector

on biodiversity, as well as the risks they themselves

are exposed to through biodiversity loss as a result of

unsustainable palm oil production.

• Establish strong and clear biodiversity policies that cover

their financing of the palm oil sector, with time-bound

and measurable targets for monitoring progress, and

incorporate biodiversity criteria into capital allocation

due diligence frameworks.

• Report on the impact of their financing and the progress

they are making in the implementation of their policies

and targets relating to the palm oil sector. The new Task

Force on Nature-related Financial Disclosures (TNFD) aims

to develop an approach for disclosure on biodiversity

by financial institutions.

• Support RSPO-certified palm oil through financing

decisions and through active participation as RSPO

members, to strengthen the organisation and support

implementation of the standards.

• Join financial sector initiatives such as the Principles for

Responsible Investment (PRI) collective engagements

on sustainable commodities and deforestation, the UN

Environment Programme Finance Initiative’s (UNEP FI)

Principles for Responsible Banking and Principles for

Sustainable Insurance, or sign up to the Finance

for Biodiversity Pledge.³⁴

• Support ZSL’s work in engaging with the palm oil sector by

signing up to our SPOTT Supporter Network, and calling for

increased transparency in commodity sectors to promote

sustainable production and trade (https://www.spott.org/

supporter-network/).

Company commitments and reporting in 2020 17

Oil palm and biodiversity

18

References

1 Article 2, Use of terms, Convention on Biodiversity, [Accessed 11

January 2021]. Available from: https://www.cbd.int/convention/

articles/?a=cbd-02#:~:text=%22Biological%20diversity%22%20

means%20the%20variability,between%20species%20and%20of%20

ecosystems

2 Biodiversity Conservation, IUCN [Accessed 20 July 2021]. Available

from: https://www.iucn.org/regions/europe/our-work/biodiversity-

conservation

3 IPBES (2019). Summary for policymakers of the global assessment

report on biodiversity and ecosystem services of the Intergovernmental

Science-Policy Platform on Biodiversity and Ecosystem Services.

https://ipbes.net/news/globalassessment-summary-policymakers-

final-version-now-available

4 ZSL and WWF Living Planet Report (2020). Available from: https://

www.zsl.org/sites/default/files/LPR%202020%20Full%20report.pdf

5 WEF and ALPHABETA (2020). The Future Of Nature And Business

(No. 2), New Nature Economy. World Economic Forum. http://

www3.weforum.org/docs/WEF_The_Future_Of_Nature_ And_

Business_2020.pdf

6 The Economics of Biodiversity: The Dasgupta Review - Full report

(2021). https://www.gov.uk/government/publications/final-report-the-

economics-of-biodiversity-the-dasgupta-review

7 EU B@B Platform: Finance Sector and Biodiversity Conservation.

Outcome of a workshop by the European Union Business and

Biodiversity Platform. [Accessed July 2021] https://ec.europa.eu/

environment/archives/business/assets/pdf/sectors/FINAL_Finance.pdf

8 Unearthing investor action on biodiversity. https://www.responsible-

investor.com/reports/responsible-investor-and-credit-suisse-or-

unearthing-investor-action-on-biodiversity

9 Finance for Biodiversity Pledge. [Accessed 11 January 2021]. https://

www.financeforbiodiversity.org/

10 Meijaard, E., Garcia-Ulloa, J., Sheil, D., Wich, S.A., Carlson,

K.M., Juffe-Bignoli, D., and Brooks, T.M. (eds.) (2018). Oil palm and

biodiversity. A situation analysis by the IUCN Oil Palm Task Force. IUCN

Oil Palm Task Force Gland, Switzerland: IUCN. xiii + 116pp.

11 Daniel R. Schlaepfer, Brigitte Braschler, Hans-Peter Rusterholz, Bruno

Baur (2018). Genetic effects of anthropogenic habitat fragmentation

on remnant animal and plant populations: a meta-analysis https://

esajournals.onlinelibrary.wiley.com/doi/full/10.1002/ecs2.2488

12 Dr Jennifer Lucey (2015). Co-benefits for biodiversity and carbon

in land planning decisions within oil palm landscapes http://www.

sensorproject.net/wp-content/uploads/2015/09/Biodiversity-and-C-

stock-report_FINAL.pdf

13 Matthew Scott Luskin, Wido Rizki Albert, Mathias W. Tobler

(2017). Sumatran tiger survival threatened by deforestation despite

increasing densities in parks https://www.ncbi.nlm.nih.gov/pmc/

articles/PMC5717059/

14 Selva Dhandapani (2015). Biodiversity loss asoociated with oil

palm plantations in Malaysia: Serving the need versus Saving the

nature https://www.researchgate.net/publication/281523357_

Biodiversity_loss_asoociated_with_oil_palm_plantations_in_

Malaysia_Serving_the_need_versus_Saving_the_nature

15 Erik Meijaard, Damayanti Buchori, Yokyok Hadiprakarsa, Sri

Suci Utami-Atmoko, Anton Nurcahyo, Albertus Tjiu, Didik Prasetyo,

Nardiyono, Lenny Christie, Marc Ancrenaz, Firman Abadi, I

Nyoman Gede Antoni, Dedy Armayadi (2011). Quantifying Killing of

Orangutans and Human-Orangutan Conflict in Kalimantan, Indonesia.

https://journals.plos.org/plosone/article?id=10.1371/journal.

pone.0027491

16 B. Azhar et al., Contribution of illegal hunting, culling of

pest species, road accidents and feral dogs to biodiversity loss

in established oil-palm landscapes. Wildlife Research 40, 1-9

(2013/03/19, 2012). https://doi.org/10.1071/WR12036

17 IUCN 70 years : International Union for Conservation of Nature

annual report 2018 https://portals.iucn.org/library/node/48376

18 Clara Melot, Izabela Delabre, Joyce Lam, Abigail Herron.

Aviva Investors, ZSL SPOTT (2019). Palm oil: a business case for

sustainability https://www.spott.org/news/palm-oil-a-business-case-

for-sustainability/

19 ZSL SPOTT Indicaor Framework (2020). Available at: https://www.

spott.org/wp-content/uploads/sites/3/2020/05/SPOTT-Palm-Oil-

Indicator-Framework-2020.xlsx

20 IUCN National Committee of the Netherlands (2019) Setting the

Biodiversity Bar for Palm Oil Certification. https://www.iucn.nl/app/

uploads/2021/03/iucn_nl_setting_the_biodiversity_bar_for_palm_

oil.pdf

21 Inernational Union for Conservation of Nature (IUCN) Red List

[Accessed July 2021]. Available at: https://www.iucnredlist.org/

22 National Red List, IUCN. [Accessed August 2020]. Available at:

https://www.nationalredlist.org/home/about/

23 The Convention on International Trade in Endangered Species

of Wild Fauna and Flora (CITES). [Accessed June 2021]. Available at:

https://cites.org/eng

24 HCV Resource Network [Accessed May 2021]. Available at: https://

hcvnetwork.org/who-we-are/

25 Assessor Licensing Scheme. HCV Resource Network. [Accessed 11

January 2021]. https://hcvnetwork.org/als/

26 https://hcvnetwork.org/wp-content/uploads/2018/05/HCV-MM-

Report_Final.pdf

27 SMART Spatial Monitoring and Reporting Tool. [Accessed 11

January 2021]. https://smartconservationtools.org/

28 SMART: A Guide to Getting Started. https://

smartconservationtools.org/wp-content/uploads/2017/11/SMART_

GettingStarted2017_English_sm.pdf

29 ZSL (2013) HCV Threat Monitoring Protocol. https://hcvnetwork.

org/wp-content/uploads/2018/05/HCV-Threat-Monitoring-Protocol.

pdf

30 https://hcvnetwork.org/wp-content/uploads/2018/05/HCV-MM-

Report_Final.pdf

31 https://hcvnetwork.org/wp-content/uploads/2018/04/HCV_

Mgmt_Monitoring_final_english.pdf

32 Scriven SA, Carlson KM, Hodgson JA, et al. Testing the benefits

of conservation set-asides for improved habitat connectivity in

tropical agricultural landscapes. J Appl Ecol. 2019;56:2274–2285.

https://besjournals.onlinelibrary.wiley.com/doi/pdf/10.1111/1365-

2664.13472

33 http://www.sensorproject.net/wp-content/uploads/2017/03/At-

Risk-Species-paper-FINAL_20160805.pdf

34 Finance for Biodiversity Pledge. [Accessed 11 January 2021].

https://www.financeforbiodiversity.org/

Acronyms

COP

Conference of the Parties

HCV

High Conservation Value

M&M

Management and monitoring

ESG

Environmental, Social, Governance

LPI

Living Planet Index

GDP

Gross Domestic Product

HCS

High Carbon Stock

IPBES

Intergovernmental Science-Policy

Platform on Biodiversity and

Ecosystem Services

RSPO

Roundtable on Sustainable

Palm Oil

P&C

Principles & Criteria

ALS

Assessor Licensing Scheme

SMART Spatial Monitoring and

Reporting Tool

PRI

Principles for

Responsible Investment

CBD

Convention on Biological Diversity

TNFD

Taskforce on Nature-related

Financial Disclosures

19