Petaling Jaya, 8 December 2022 - Sime Darby Plantation Berhad (SDP), the world’s largest producer of certified sustainable palm oil, has developed a comprehensive strategy to achieve net-zero emissions across its entire value chain by 2050. SDP has aligned its action plans with the Paris Agreement targets to limit global temperature rises to no more than 1.5°C.

SDP’s net-zero strategy has been developed in line with science and the SBTi Criteria . SDP submitted both its near-term 2030 targets and longer-term 2050 targets to SBTi on 10 November 2022 for validation. SDP’s net-zero strategy commits to 100% absolute overall emissions reduction in Scope 1 and 2 by 2050, with all unabated Scope 3 emissions balanced by an appropriate amount of carbon removals or offsets.

SDP has taken a three-pronged approach:

1. Acceleration of its renewables programme

SDP will have more than 40 biogas plants across its operations by 2030, which will address much of the emissions from mill effluent. Up to 70% of SDP’s footprint for non-FLAG (Forest, Land and Agriculture (SBTi definition)) Scope 1 and 2 emissions come from methane produced from mill effluent.

2. Land use transformation

SDP is expanding on existing reforestation, conservation and biodiversity initiatives. This includes reforestation of non-productive agriculture land as well as large-scale tree-planting as a nature-based solution to increase carbon sinks. For instance, the Group has decided to reforest a 400 ha area of peat plantations in East Malaysia. To date, SDP has forest set-aside programmes of more than 40,000 ha, with over 1.9 million forest trees planted.

SDP will reinforce its No Deforestation, No Peat and No Exploitation (NDPE) commitments.

3. Accelerating engagements with suppliers

SDP recognises that addressing Scope 3 emissions, generated from third-party suppliers or others in the value chain, presents the greatest challenge on our net-zero journey. SDP has therefore committed to engaging suppliers in order to ensure the replication of its own measures not only within its own operations but also across its entire value chain. In 2021, SDP achieved 71% compliance in its supply chain for its earlier ambition to be deforestation-free.

The new developments build on SDP’s existing sustainability strategy, which has three key elements: Climate Action, Human Rights and Responsible Sourcing.

SDP’s Responsible Agriculture Charter (RAC), which was launched in 2016, forms the backbone of its climate action workstream. In 2021, SDP had committed to 50% carbon reduction by 2030.

The SBTi is a collaboration between the CDP, World Resources Institute (WRI), the World Wide Fund for Nature (WWF), and the United Nations Global Compact (UNGC). It independently assesses and approves companies’ targets through a Call-to-Action campaign. The SBTi’s rigour and comprehensive scope enable companies to take meaningful steps toward accelerated decarbonisation. This target-structured approach, which is externally validated, will ensure that SDP sets measurable and meaningful targets, which it will review and update as SBTi’s standards evolve.

Once achieved, SDP’s net-zero aspiration will be the latest in a long line of environmental achievements in SDP’s 200-year history. The company is a founding member of the Roundtable on Sustainable Palm Oil (RSPO) and started working towards 100% RSPO certification across its operations in 2008, making sustainable, ethically-sourced palm oil its rallying cry.

Furthermore, SDP pioneered the industry’s zero-burning replanting technique to clearing fields of old and unproductive palms without using fire and causing emissions, whilst improving soil quality. With its breakthrough innovation in genome science, the Group’s 200-strong R&D team has also successfully developed GenomeSelectTM seeds, which will nearly double crop yields by 2050. This yield improvement, in turn, will reduce the rate of expansion required to meet growing demand for palm oil as a result of population growth, helping to ensure food security. The same innovative approach is now being used by the Company to develop oil palms that can be more efficiently harvested as well as those that can better withstand disease and extreme weather conditions caused by climate change. SDP firmly believes its research will benefit the wider industry, and as a result has made the oil palm genome sequence public for all to use.

Mohamad Helmy Othman Basha, Group Managing Director of Sime Darby Plantation, commented:

“This is a landmark moment for the global palm oil industry. We have developed a comprehensive strategy to ensure that the commitments announced today will be met. With technological improvements, we may be able to do even better.

“At Sime Darby Plantation, we pride ourselves on leading sustainable standards and practices within the palm oil industry. With our net-zero commitment today, Sime Darby Plantation will continue to act with urgency and focus. We know that our challenge is significant, and time is short. We are committed to delivering the food the world needs in the most sustainable way possible.”