Global Markets

Profitability and Sustainability in Palm Oil Production

A first-of-its-kind study for both the palm oil industry and agricultural commodities in general, Profitability and Sustainability in Palm Oil Production comprehensively examines the financial costs and benefits of adopting certification. The report was produced jointly by WWF, CDC, the UK’s development finance institution, and FMO, the Dutch development bank.

Examining the dividends of palm oil certification, this groundbreaking report finds economic benefits of pursuing sustainable palm oil operations outweigh the financial costs. The report's research shows that adopting sustainable practices, even in a high impact industry like palm oil, can result in net financial benefits to producers—providing gains for people, the planet and the bottom line. Read more

WWF International Finance Newsletter

The quarterly International Finance Newsletter series aims to provide regular information on key sustainability developments in the production and trade of food and fiber commodities. Offering practical and timely guidance on ways to incorporate sustainability in investment decisions (for example, in this edition we assess the requirements for credible “sustainability” standards) and review progress in the development and traction of key sustainability standards.

WWF has been active in these markets for several years and recognizes the role that the financial sector can play in supporting more sustainable practices. We also see growing interest in “soft” commodities and sustainability within the financial sector.  A range of strategic drivers (including food security, climate change, new investment opportunities and new markets) will ensure that the importance of the food and fiber sectors will continue to grow, and will continue to attract the attention of financial institutions.

February 2012, International Finance Newsletter
Dividends of Certification
What is the impact of certification on the business bottom line? This is a critical question for our field. The answer may help facilitate further uptake of better practices and unlock new opportunities for financiers. Yet the question has remained glaringly under-researched. Meanwhile, soft commodity producers and their funding partners are required to make tough sustainability decisions in changing markets based on anecdotes and assumptions. This edition of WWF’s Commodity Standards Update is dedicated to addressing this challenge and providing insights to help producers and their financial backers navigate the complexities of investing in sustainability. Read more

September 2011, International Finance Newsletter
Commodity Standards Update
We are witnessing a rapid increase in production of credibly certified soft commodities (albeit often from a small base), and, consequently, growing interest in this asset class from our finance sector partners and the broader financial community. There is a consistent message from producers that finance is a critical component in scaling up more sustainable production, but it is also clear that the types and scales of finance range widely across different commodities. Beyond “sustainability concerns”, there are clearly also issues relating to the sophistication of potential clients and their ability to prepare compelling business models, the volume and ease of lending—especially to small scale producers—and other barriers. Read more

May 2011, International Finance Newsletter
Standards and Environmental and Social Governance Metrics
We are seeing increasing alignment of expectations for financing and investment in soft commodities (food, fuel, and fiber). Compliance with credible voluntary standards is becoming the default performance hurdle for many institutions, and “certified” products are serving as the common currency of supply chain assurance.WWF is of the opinion that good ecological and social standards that can be efficiently applied at scale will drive large scale change in production practices. These tools are increasingly important as we see large scale investment into soft commodity production and an urgent need to increase the clarity with which investors make decisions about investments. Standards and better environmental and social governance (ESG) metrics will both play a role here, and this edition of WWF’s Commodity Update highlights recent developments in these areas. Read more

February 2011, International Finance Newsletter
Forest Carbon Markets
The market for carbon credits and other environmental benefits from forests (often characterized under the acronym REDD+, reducing emissions from deforestation and forest degradation), received a major boost at the Cancun climate meeting last December.  In this issue, Iain Henderson and Steve Ruddell, two of WWF’s forest carbon advisors, explore REDD+ and emerging opportunities in carbon markets. WWF sees the evolution of this market as important since any serious effort to address climate change will have to integrate forests, and additionally, creating a value for standing and intact forests. Read more.

November 2010, International Finance Newsletter
Payment for Ecosystem Services
Over the past four years the Florida Ranchlands Environmental Services Project (FRESP) has been field testing elements of a Payment for Environmental Services (PES) program where cattle ranchers can use working agricultural land to provide valuable water-related environmental services, using market-like concepts to increase the provision of environmental services. The state of Florida has decided to take this design to scale in a new Northern Everglades PES by modifying existing water management systems on a ranch to capture water and reduce the amount of phosphorus in surface water drainage.  Read more 

July 2010 International Finance Newsletter
Innovative lending to save coral reefs
Coral reefs are being lost to the world at a rate five times faster than rainforests, often as a result of polluted farm run-off. The good news is that solutions are being pioneered in Australia in a partnership between The Coca-Cola Foundation, WWF and local catchment leaders (Reef Catchments NRM). ‘Project Catalyst’ has shown that modern technology can significantly improve farm profitability and reduce pollution at the same time. The Great Barrier Reef, ‘the Reef’, has over 500 coral and 1,500 fish species. Yet up to 700 of its reefs are at risk of contamination, mostly from elevated levels of pollution and nutrients (the diversity of coral reefs is dependent on fewer rather than more nutrients). An expert team at Reef Catchments NRM has started working with The Coca-Cola Foundation and WWF to support “on-farm” innovation that reduces nutrient run-off. Read More

April 2010  International Finance Newsletter
Balancing the Earth’s Budget
Humanity is currently using natural resources faster than they can be renewed, and our demand is exceeding the earth’s supply which is resulting in serious consequences for the planet. Most experts expect global population to peak at about 9.1 billion by 2050 (United Nations Population Fund 2005), which represents an additional 2-3 billion people on the planet from the 2000 population. If these trends continue, there will not be enough food to meet the expected demand. For the last decade, we have been converting natural habitat for food production at the rate of 0.6% per year. But the Earth’s resources are finite, and if we continue to expand into natural habitat at the current rate there will be very little left by 2050.  

With this in mind WWF is focused on a number of strategies around key commodities through its Market Transformation Program, working on better practices, technology, degraded land assessment, property rights, waste, overconsumption, and carbon. Read more

January 2010 International Finance Newsletter
Water is not the new carbon
This edition features news on forestry plantations; aquaculture standards, an article on water, an issue of growing importance as seen by the number of analyst reports over the past year; as well as updates on sustainable sugar and ethanol. The finance sector’s interest in water seems to be expanding to include the broader assessment of sustainability risks and opportunities, and it is clear that water availability will surely become one of the defining sustainability concerns of the next decade. WWF is active in this arena through bilateral partnerships with corporate and financial institutions such as Coca Cola and HSBC, and through multi-stakeholder participation such as the Water Roundtable. Read more.

October 2009 International Finance Newsletter
Key Trends and Issues in Standard-Setting
Hundreds of sustainability standards have been developed and launched in the past decade. They cover all industries but are particularly evident in the food and agribusiness (F&A) sector. The growth and breadth of standards, which address issues such as labor, fair trade, organic, GMO-free, biodiversity, etc. have largely served niche markets and interest groups until relatively recently. The challenge facing the food and “soft” commodity sector is to develop credible and efficient “sustainability” certification systems for industrial production. Read more