Norway’s wealth fund ditches 33 palm oil firms over deforestation

A truck carrying oil palm fruits passes through Felda Sahabat plantation in Malaysia. (Reuters)
Updated 28 February 2019

Norway’s wealth fund ditches 33 palm oil firms over deforestation

  • Norway’s Government Pension Fund Global (GPFG) sold stakes in more than 60 companies due to deforestation — including 33 firms involved in palm oil
  • As the world’s most widely used edible oil, palm oil is found in everything from margarine to biscuits and soap to soups, as well as in biofuel

KUALA LUMPUR: Norway’s $1 trillion sovereign wealth fund, the world’s largest, has pulled out of more than 33 palm oil companies over deforestation risks during the last seven years, a green group said on Thursday.
Norway’s Government Pension Fund Global (GPFG), which released its annual report on Wednesday, sold stakes in more than 60 companies due to deforestation — including 33 firms involved in palm oil — Rainforest Foundation Norway said.
“It’s great to see that the GPFG is taking action against deforestation,” Vemund Olsen, a senior policy adviser at the Oslo-based group said on Thursday.
“The divestments should be seen as a warning shot to those investors and companies still involved in deforestation,” Olsen, whose group has monitored the GPFG’s investments since 2010, told the Thomson Reuters Foundation.
As the world’s most widely used edible oil, palm oil is found in everything from margarine to biscuits and soap to soups, as well as in biofuel.
But in recent years, the industry has come under close scrutiny from green activists and consumers, who have blamed it for clearing forests for plantations and causing fires, along with the exploitation of workers.
Green groups have often accused Norway of double standards by investing billions of dollars in palm oil or soya farmers while also giving cash to nations from Brazil to Indonesia to slow deforestation.
Norway signed a $1-billion deal with Indonesia to help protect its tropical forests in 2010, and the first payment for reduced emissions was agreed last week.
Since 2012, the GPFG has become a more active shareholder and now pushes sustainability and ethics among its investments and drops firms that fail to meet its standards.
Marthe Skaar, spokeswoman at Norges Bank Investment Management, which manages the fund, confirmed that more than 60 divestments had been made due to deforestation risks, including 33 palm oil firms, since 2012.
Divestments in two palm oil companies happened as recently as last year, said Skaar, adding that the fund does not disclose the names of such companies. Most palm oil is grown in Indonesia and Malaysia.
In a report released earlier this month, GPFG said that it engages with companies it owns stakes in to push them to cut their ties to deforestation.
It is currently asking banks in Indonesia, Malaysia and Brazil to adopt no deforestation criteria for their loans to the agricultural sector, the report said.
“The GPFG has realized that deforestation reduces its long term returns on investments,” says Olsen.
“It’s increasingly clear that companies involved in deforestation, directly or through their supply chains, are a major liability to investors.”

A homegrown UAE brand bets on date’s heritage appeal

Updated 29 February 2020

A homegrown UAE brand bets on date’s heritage appeal

  • Dates are locally sourced by The Date Room from around 20 farms in the Al Ain oasis area of Abu Dhabi
  • UAE farms grow about 475,000 tons of dates a year, a significant percentage of which is exported

DUBAI: When you can answer the classic business question about a unique selling proposition (USP) in six different ways, you likely have a successful product on your hands.

Thankfully, when you are dealing with dates, unusual product features are not a problem.

There are more than 3,000 date varieties around the world, but Emirati brand The Date Room is approaching the sticky business of breaking into an established market with just half a dozen local cultivars.

From the buttery, caramel notes of the golden Kholas date to the lower-carbohydrate Razaiz type, their flavors offer a change from the more commonly available Medjool and Deglet Noor varieties.

Being locally sourced from about 20 farms in the Al-Ain oasis area of Abu Dhabi, they are also introducing UAE residents to the nation’s heritage.

“Emirati dates are unique because they’re generally much richer in taste and texture than others on the market — although they can be smaller in size,” said Tony N. Al-Saiegh, executive director of The Date Room.

The Date Room launched with two luxury boutiques in the UAE last November after founder Ahmed Mohamed bin Salem spotted a gap for local fruit in a market dominated by produce from Saudi farms.

While official market share by origin data is not available, Saudi dates may control close to 90 percent of the UAE’s retail market.

Yet, with an annual production of 755,000 tons, Saudi Arabia trails Egypt, Iran and Algeria, all of which produce in excess of a million tons each year, according to the UN Food and Agriculture Organization.

By contrast, UAE farms grow about 475,000 tons, a significant percentage of which is exported.

Dates are among the world’s oldest cultivated crops. The palm is native to the Middle East, North Africa and South Asia, with origins that go back more than 5,000 years to what is modern-day Iraq.

The appeal of dates has grown considerably in recent years. Their high fiber and mineral profile have led to their classification as a superfood, they have been used for their high natural sugar content in healthy natural alternatives to processed candy bars.

“The Date Room’s main initial motive was the fact that our own farms produce a superior quality of date in every way,” Al-Saiegh said.

“Our families have been enjoying these dates with every meal and occasion for generations, so why not introduce it to the market in a way that makes them available to everyone but also promotes the unique culture of the UAE?”

The company’s annual production runs to about 160 tons.

For now, distribution is restricted to the UAE, but Al-Saiegh says his team is in talks with distributors in India and Indonesia.

With farmers everywhere agonizing over the impact of climate change, what are the challenges facing date farmers, accustomed as their crops are to heat and aridity?

Scientists expect 2019 to be the second-hottest year on record after 2016, and they forecast that by 2070, today’s major producers will suffer from a markedly unsuitable climate.

Despite palm trees being able to tolerate the heat for hundreds of years, Al-Saiegh says his farms are already feeling the impact.

“As the weather gets hotter and the summers get longer, it’s drying out farms and (arable) land. This means more water is required because a lack of water affects the size and texture of the fruit,” he explains.

While the full impact of those changes is some years away, the Abu Dhabi government has focused on conserving the UNESCO World Heritage oasis where the UAE’s dates are grown.

On the other hand, given the way technology has transformed the local agricultural sector with solutions such as vertical, indoor and soilless farms, Al-Saiegh may soon be able to add another distinguishing feature to The Date Room’s USP.

• This report is being published by Arab News as a partner of the Middle East Exchange, which was launched by the Mohammed bin Rashid Al Maktoum Global Initiatives and the Bill and Melinda Gates Foundation to reflect the vision of the UAE prime minister and ruler of Dubai to explore the possibility of changing the status of the Arab region.