KUALA LUMPUR (Dec 8): Sime Darby Plantation Bhd (SDP) on Thursday (Dec 8) announced a three-pronged comprehensive strategy to achieve net-zero emissions across its entire value chain by 2050.

The three-pronged approaches — acceleration of its renewables programme, land use transformation and accelerating engagements with suppliers — aligned its action plans with the Paris Agreement target of limiting global temperature rises to no more than 1.5 °C.

Once achieved, SDP's net-zero aspiration will be the latest in a long line of environmental achievements of the group's 200-year history.

For the first approach, 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 footprints for non-forest, land and agriculture (FLAG) Scopes 1 and 2 emissions come from methane produced from mill effluent.

The second approach will see SDP expand on existing reforestation, conservation and biodiversity initiatives which include reforestation of non-productive agriculture land as well as large-scale tree-planting as a nature-based solution to increase carbon sinks. Additionally, SDP will reinforce its "No Deforestation, No Peat and No Exploitation" commitments.

As for the third approach, SDP recognises that addressing Scope 3 emissions, generated from third-party suppliers or others in the value chain, presents the greatest challenge on its net-zero journey. As such, SDP has committed to engaging suppliers in order to ensure its own measures are not only replicated within its own operations but also across its entire value chain.

In a statement, the world's largest producer of certified sustainable palm oil noted its net-zero strategy is science-based and in line with the latest guidance by the Science Based Targets initiative (SBTi), including the FLAG guidance launched by SBTi on Sept 28.

Such new developments were built on SDP's existing sustainability strategy, which has three key elements, namely climate action, human rights and responsible sourcing. SDP's Responsible Agriculture Charter, which was launched in 2016, forms the backbone of its climate action workstream.

Besides submitting both its near-term 2030 targets and longer-term 2050 targets to SBTi on Nov 10 for validation, SDP's net-zero strategy also commits to 100% absolute overall emissions reduction in Scopes 1 and 2 by 2050, with all unabated Scope 3 emissions balanced by an appropriate amount of carbon removals or offsets.

"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 SDP, we pride ourselves on leading sustainable standards and practices within the palm oil industry. With our net-zero commitment today, SDP 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," said SDP group managing director Mohamad Helmy Othman Basha.

The SBTi is a collaboration between the Carbon Disclosure Project, World Resources Institute, the World Wide Fund for Nature, and the United Nations Global Compact. It independently assesses and approves companies' targets through a Call-to-Action campaign.

According to SDP, the SBTi's rigour and comprehensive scopes enable companies to take meaningful steps toward accelerated decarbonisation. The 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.

As of noon break on Thursday, SDP's share price was one sen or 0.23% higher at RM4.36, bringing the group a market capitalisation of RM30.15 billion.