How it is not taking responsibility for abusive practices in palm oil production

How are large palm oil companies financed? And what role do investors like banks, pension funds and passive investment funds play in the ongoing abusive social and environmental practices of these companies? Why are financial institutions not taking their responsibility to provide green, social and sustainable investments?

In this background paper, SOMO explores the diverse financial instruments and complex channels of the financial sector through which big companies are financed. This is done through a specific example, the Salim conglomerate, which has subsidiaries with palm oil production in Indonesia.

The paper provides an overview of the wide range of financiers involved and reveals financing instruments scattered around the world, offering profitability for a wide range of global financial players. Also, this paper provides insight into the lack of a national and international regulatory framework that relates to the actual operating practices of the financial sector and its (lack of) influence over companies.

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