Alicorp’s ESG Risks Could Undermine Financial Stability, Growth

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Amid its growing presence in Peru, Alicorp SAA’s (ALI.LM) stock has almost tripled since its low point in 2015, a sign of healthy financials and strong investor interest. But the company’s stable financial status could be undermined by Environmental, Social, Governance (ESG) risks as more investors, regulators, and consumers become aware of the growing importance of sustainability and the company deals with ongoing deforestation-related controversies.

Alicorp is facing a major flashpoint from reputational risks derived from the sourcing of palm oil connected to deforestation. This report discusses how this risk is not yet accounted for in its financial statements but may materialize into financial losses in the future, particularly as the company continues to grow, if not addressed and handled properly.