Many of the environmental issues potentially caused by oil palm plantations can be avoided through best management practices. Meanwhile, financial incentives can help companies to take ecosystem services into account when concessions are allocated, and these could provide palm oil companies with new revenue streams to support sustainable activities.
Financing palm oil plantations
1. Prioritize responsible financing
Investors can provide an important source of encouragment to implement best practices in palm oil plantations.You can also benefit from knowing how to distinguish between responsible palm oil plantations and risky, unsustainable plantations—and the tools on the right can help you in this process.
2. Explore new financial incentives
New types of financial incentives can help companies to take ecosystem services into account when concessions are allocated, and these could provide palm oil companies with a supplementary revenue streams to support sustainable activities.
- Carbon markets currently provide payments for reduced carbon emissions through the Clean Development Mechanism of the EU Emissions Trading Scheme.
- A new mechanism is being developed to provide payments for Reducing from Deforestation and forest Degradation (REDD+) and this may well provide revenue opportunities for palm oil companies if they can demonstrate that they are helping to reduce emissions.
next steps
- Check financial mechanisms to support sustainable land use in the Heart of Borneo
- Explore tools that make it easy to incorporate natural capital into decisions
- Read the Economics of Ecosystems and Biodiversity (TEEB) study, an initiative to draw attention to the global economic benefits of biodiversity
