Eastspring Investments: Responsible Investment Report 2022
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Company F
Company F is a beauty and cosmetic conglomerate in South Korea. As a recognised global cosmetic company, this company has been highly regarded in the local cosmetic industry for their commitment to sustainability management. As part of preparation, the Eastspring Korea team assessed the company’s 2030 agenda in sustainability management and identified two key engagement objectives for the company. First, the investment team wanted clarity on the long-term investment risks or opportunities. Second, the investment team sought a better understanding of current issues and solutions in supply chain management including the use of palm oil as an ingredient of its cosmetics. Upon raising these concerns, the company responded by showing a recognition of the effects of unsustainable palm oil on the wider eco-system, citing the deforestation caused by indiscriminate cultivation of palm farms, including the threat to of endangered species, greenhouse gas emissions, and human rights issues in the supply process. As a starting point, the company displayed awareness and publicly reports its current consumption of palm oil and palm kernel- derived raw materials annually as raw materials for cosmetics and household products. To address supply chain management issues as part of its long-term ESG agenda, the company shared ongoing efforts to increase the proportion of Roundtable on Sustainable Palm Oil (“RSPO”)-certified raw materials. Leveraging on its role as a consumer, the company is directing its support into efforts for the sustainable use of palm oil throughout the industry through the RSPO system by striving to expand the purchase of palm oil that is sustainably produced without deforestation. To further enhance its efforts, the company announced it will set aside an internal budget to invest into biodiversity conservation efforts and increase the use of RSPO certified palm oil to 90% or more by 2023. As of the latest reported statistic, in 2021, approximately 40% of the palm oil derivatives are RSPO-certified.
Supply Chain Management and Palm Oil
Eastspring Korea
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