Risk associated with Indonesian palm oil pegged at US$10 billion for firms

Risk associated with Indonesian palm oil pegged at US$10 billion for firms

THE WHAT? Companies that produce, source or use Indonesian palm oil could be exposed to US$10 billion due to reputational and market risks, according to a report published by Bloomberg.

THE DETAILS Global environmental not-for-profit, CDP surveyed some 125 firms involved in the supply chain to calculate the financial impact of risks associated with the crop.

The CDP told Reuters, “Brand damage is the greatest financial risk, with a potential financial impact totalling US$4.2 billion.” The remainder of the figure represents risks such as reduced demand, production capacity and sales disruption.

THE WHY? Environmental campaigners have blamed palm oil plantations for deforestation and charged producers with contributing to pollution and bringing several species to the brink of extinction so it’s no wonder that consumers are wary.

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