Storebrand ASA ended its investment in most palm oil producers, apart from Golden Agri-Resources Ltd, after Norway’s second-largest insurer found the companies breached its environmental sustainability standards. “The main driver behind deforestation in tropical regions is often the establishment of new palm oil plantations,” Christine Meisingset, head of sustainable investments at the insurer, said in a statement. “Storebrand would rather invest more in companies that are pushing the industry toward a more sustainable approach.”
Storebrand, Norway’s largest insurer after Gjensidige Forsikring ASA (GJF), joins the nation’s sovereign wealth fund in ending investments in palm oil producers. Oslo-based Storebrand last year halted investments in coal producers and those with exposure to oil sands, adding to a blacklist that includes tobacco and landmine producers. Norway’s sovereign wealth fund, the world’s largest, sold investments in 23 palm producers including Wilmar International Ltd. (WIL), Golden Agri and Kuala Lumpur Kepong Bhd (KLK) in 2012 due to concerns about deforestation. A Storebrand study of the palm oil industry found 11 companies to be in breach of the insurer’s sustainability standards, Meisingset said. “Climate change is the most comprehensive risk to sustainability, and the protection of forests, especially rainforests, is essential in order to negate the effects of climate change.” The company said it assesses possible investments based on its own environmental, social and governance criteria.