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Deforestation and land grabbing in the palm oil sector

Monday, May 1, 2017

Netherlands - This case study shows that nine insurance groups active in the Netherlands invested in ten controversial listed palm oil companies over a period of four years, between 2013 and 2016. These palm oil companies have been involved in serious deforestation and land grabbing controversies. Most insurance groups show a lack of transparency regarding how they address deforestation and land grabbing in this high risk sector. Three insurance groups, Allianz, Legal & General and Generali, are not transparent. Aegon, APG and Delta Lloyd demonstrate to a very limited extent that they address deforestation and land grabbing. Achmea and NN Group share information and clearly show that they take some steps to address risks, although there is room for improvement. One insurance group, Vivat Verzekeringen, shows that it is possible to both take substantial action and also be transparent. Without transparency it is not possible to hold investors accountable.

Deforestation and land grabs form ongoing risks in the palm oil sector, with severe consequences for the environment and for communities. Deforestation and land grabs are connected to a wide range of other serious social and environmental impacts, such as land conflicts, forced evictions and conflicts with indigenous communities, as well as loss of biodiversity and the burning of peat; leading to devastating levels of pollution that contribute greatly to global climate change.

The objective of this Dutch Fair Insurance Guide (part of the Fair Finance Guide International) case study is to assess whether and if so, how, the ten largest insurance groups active in the Netherlands respond to the risk of being associated with and contributing to deforestation and land grabs through their investments in palm oil companies. The palm oil sector is a high-risk sector in terms of social and environmental impacts. The study focuses on the risks that arise due to investments in shares and bonds for the own account of the insurance group and through the management of assets for third parties. These investments contribute to the financing required for expansion in the palm oil sector.

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