The Green Gauge: Sinar Mas under fire

July 19, 2010

An aerial view is seen of a cleared forest area under development for palm oil plantations in Kapuas Hulu district of Indonesia's West Kalimantan province

Indonesia’s Sinar Mas came under heavy fire last week from non-government organization Greenpeace as a report named and shamed some of its biggest clients for their role in the destruction of rainforest and peatlands.

Following is a breakdown of the companies that made headlines July 3 to 16 for winning or losing credibility based on environment-related activity, led by Indonesian conglomerate Sinar Mas.

Selections of companies were made by Christopher Greenwald, director of data content at ASSET4, a Thomson Reuters business that provides investment research on the environmental, social and governance performance of major global corporations. These ratings are not recommendations to buy or sell.

bot25 Sinar Mas, Wal-Mart, Tesco, WH Smith, Hewlett Packard, Paperlinx

Greenpeace has named these companies as sourcing products from Sinar Mas’ APP subsidiary, which the NGO has demonstrated in a recent report is responsible for extensive deforestation in Indonesia through the destruction of rainforest and peatlands.  Deforestation is responsible for 20 percent of CO2 emissions globally, and Greenpeace has called on international companies to ban sourcing from Sinar Mas.  In response to the report, HSBC indicated last week that it has divested all of its shares from Sinar Mas.

A copy of the report is available here.

bot25 Zijin Mining Group Co. Ltd.

Chinese environmental authorities confirmed that nearly 2,000 tons of fish have been poisoned by over 9,000 cubic meters of leaking sewage in the Tingjiang River in Eastern China, which led to a temporary shutdown of one of the largest mines in the country.  Late last week, Chinese authorities also announced that three senior managers at the mine had been taken into custody as a result of the incident.  Shares of the Chinese mining giant have fallen more than 20 percent since the news of the leakage first emerged in early July.

bot25 Massey Energy, Layne Christensen

Both Massey Energy and Layne Christensen were recently subject to successful shareholder resolutions requiring the companies to address environmental concerns at their annual meetings, according to Ceres, a network of investors focused on sustainability issues.  A resolution requiring Massey to set quantitative targets for reducing greenhouse gas emissions received 53 percent of the votes of shareholders, while 60 percent of the shareholders of Layne Christensen voted in favor of a resolution requiring the company to report on its environmental, social and governance performance.  According to Ceres, 42 shareholder proposals addressing climate change issues received an average of 24.6 percent of the votes in 2010, up from 21.7 percent on average in 2009.

bot25 Anadarko Petroleum, Mitsui & Co.

While media attention has focused on the massive liabilities of BP in the Gulf Oil disaster, BP has requested Anadarko and Mitsui & Co. to pay $272 million and $111 million respectively for clean-up efforts thus far, corresponding to their 25 percent and 10 percent ownership stakes in the well.  Anadarko has contested the request, arguing that BP is wholly responsible for clean-up efforts given the company’s negligence in failing to prevent the blowout.

bot25 Valero Energy Corp.

Texas-based Premcor Refining Group Inc., a subsidiary of Valero Energy Corp., has been fined $4 million for underground storage tank leaks that occurred at Clark gas stations in 26 Ohio counties.  The company will also be required to pay for the cleanup of 55 contaminated gas station sites, in what the Ohio Department of Commerce has characterized as the largest gas storage leak settlement in its history.

top25 Unilever N.V.

Unilever has recently published its paper and board packaging policy, which requires the company to source 75 percent of its paper products from sustainable sources by 2015 and 100 percent by 2020.  Currently the company sources 62 percent of its paper products from sustainable sources, and Unilever is the first global consumer products company to make a commitment to source 100 percent of its paper products from sustainable sources by a specific date.

A copy of the company’s policy is available here.

top25 PG&E

Despite being the 35th-largest utility in the United States, Pacific Gas & Electric has the lowest CO2 emissions / MWh of electricity among the largest 100 U.S. utilities due to its avoidance of coal, according to a recent report published by the Natural Resources Defense Council.  PG&E has also recently been in the news for joining forces with the California Solar Energy Industry Association and the California Wind Association in countering opposition by several Texas oil companies to California’s Global Warming Solutions Act, which aims to reduce California’s CO2 emissions by 2020 in line with Kyoto Protocol goals.

A copy of the NRDC report is available here.


Photo shows an aerial view of a cleared forest area under development for palm oil plantations in Kapuas Hulu district of Indonesia’s West Kalimantan province July 6, 2010. The area belonged to Indonesian agribusiness firm Sinar Mas, according to a Greenpeace activist who accompanied journalists on a trip to the area. REUTERS/Crack Palinggi

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[...] In two separate articles, Reuters reported trouble in the source of palm oil supply.  The first article states: Greenpeace has named [Sinar Mas, Wal-Mart, Tesco, WH Smith, Hewlett Packard and Paperlinx] [...]