Investors would welcome specific bonds that help finance the growth of sustainable palm oil, according to Meryam Omi, head of sustainability at Legal & General Investment Management (LGIM).
Speaking at the ESG in Fixed Income conference, hosted by Environmental Finance, Omi said investors were not doing enough to support the growth of sustainable palm oil.
“Some of the good practice on the ground is not coming through to investors and I think we need to start looking at that,” she said, having warned that currently the conduct of the big food retailers on the issue was “quite a depressing story”.
Omi, who has met with palm oil producers as part of LGIM’s efforts to increase the transparency of the supply chain, was keen to counter the perception that being sustainable necessarily brings exorbitant extra costs, and suggested that investors consider calling for specific bonds to build in evidence of good practice.
“Specific bonds or types of investment that showcase good practice might not be the only solution we need, but it’s a solution we need now to show that actually, we can offer affordable palm oil,” she said.
For such bonds or clauses in other forms of investment to be developed, Omi made clear the main challenge would be in ensuring traceability and transparency across the supply chain.
Companies:Legal & General Investment Management
People:Meryam Omi