The SPOTT index: A proof-of-concept measure for tracking public disclosure in the palm oil industry

Abstract

The production of palm oil has considerable implications for tropical biodiversity. Increasing the environmental, social and governance (ESG) transparency and disclosure of the industry will contribute towards sustainable consumption and production practices. Here, we present a method for producing an index to measure changes in ESG disclosure in the palm oil sector over time based on data collected on SPOTT (Sustainability Policy Transparency Toolkit). The SPOTT Index is based on the number of points scored by a company during an annual assessment, and the number of companies that were included in that assessment time period. The SPOTT Index shows that ESG disclosure of palm oil companies measured improved between 2014 and 2018. Although we demonstrate proof of concept based on a limited number of companies, continued growth of SPOTT will enable the production of a powerful metric in ESG disclosure beyond palm oil and also serve to incentivise sustainable production and consumption in the sector.

Keywords

• Palm oil
• Corporate disclosure
• SPOTT index
• Assessment
• Companies
• ESG