An edible oil derived from the fruit of the oil palm tree, palm oil is widely used in daily life. While palm oil is cheap to produce, its environmental cost is high.
About 90% of the world’s palm oil is harvested in Indonesia and Malaysia, where some companies clear-cut and burn away tropical forests to create room for oil palm plantations. This fuels climate change by contributing to carbon emissions as well as destroying CO2-absorbing forests. Deforestation also means the loss of natural habitat for vulnerable species such as the orangutan and the pygmy elephant.
Bank of the West only finances companies that encourage the development of sustainably produced palm oil. Mandatory criteria for financing approval includes: no destruction of high conservation-value forests; no destruction of ecologically or historically significant areas; no use of certain harmful pesticides; and third-party certification of responsible operations.
As part of BNP Paribas, we are also a member of the Roundtable on Sustainable Palm Oil. This global organization sets standards for sustainable palm oil production. For more about how we restrict palm oil sector financing, please see the policy document linked here.