Is Sustainable Palm Oil About To Become the Norm?

(3BL Media/JustMeans) - Palm oil is in many products that consumers purchase. The consumption of palm oil has increased almost sixfold since 2000, and 98 percent of the palm oil imported into the U.S. comes from southeast Asia, mainly Indonesia and Malaysia. Here’s the problem: Greenpeace calls the palm oil sector the “greatest single cause of deforestation in Indonesia.” Indonesian rainforests are disappearing at the rate of a quarter of a million hectares every year. Those rainforests are home to tigers, and it is thought that there may be as few as 400 tigers left in the rainforests of Sumatra. Palm oil and pulpwood plantations were responsible for almost two-thirds of the destruction of the tiger’s habitat  from 2009 to 2011. Due to pressure by environmental groups and consumers, a number of companies are taking action to stop rainforest destruction caused by the palm oil sector. 
 
During the last few months of 2013, several big name companies made announcements concerning palm oil. Wilmar International Ltd. was one of those companies. The company is the world’s largest palm oil processor, accounting for over one-third of the palm oil processing market in the world, with a distribution network in over 50 countries. Past Greenpeace investigations revealed that big name companies, including Colgate Palmolive and Procter & Gamble, were linked to Wilmar. On December 5, Wilmar announced a "No Deforestation Policy." The company agreed that it will not cut down any additional rainforest to increase agricultural production, and will protect forests that are habitats for endangered species. The commitment also applies to subsidiaries of the company. Nestle enacted a similar agreement in 2010. A few days before the announcement by Wilmar, a coalition of over 40 investors from the U.S. and Europe sent letters to 40 major stakeholders in the palm oil industry, including Wilmar, calling for more sustainable practices. 
 
The Hershey Company needs palm oil to produce its products, and last month the chocolate maker announced it will work with suppliers so that 100 percent of the palm oil it buys will be traceable and sustainably sourced by 2014. That’s a year ahead of its 2015 target. Suppliers will have to verify that they do not contribute to either deforestation or destruction of wildlife habitat and operate in compliance with local laws and regulations. Hershey is one of the largest chocolate producers in North America, with products sold under more than 80 brand names. 
 
“The Hershey Company is committed to continuous improvement and transparency in our sustainable sourcing efforts,” said Frank Day, Vice President of Global Commodities. “Our move to source 100 percent traceable palm oil is the latest step forward in our efforts to ensure we are sourcing only sustainably grown palm oil that does not contribute to the destruction of wildlife habitat or negatively impact the environment.”
 
In November, Unilever announced that by the end of 2014, all of the palm oil it buys will be traceable to known sources. All palm oil bought by Unilever will come from certified sources by 2020. Unilever is one of the biggest global buyers of palm oil, which is used in a variety of the company’s products, including margarine, ice cream, soap and shampoo. Unilever buys around 1.5 million tons of palm oil and its derivatives every year, or about three percent of the world’s total production. 
 
Sources
 
Photo: Rainforest Action Network

Comments

I do agree that the brands in the West have made great strides in using traceable sustainable palm oil. Herhey's was a surprise announcement and one that can be met quite easily if the will is there.

Unilever on the other hand, faces two key issues unless they are able to become completely vertical in terms of palm oil use.

1.Their use of palm oil is mostly in derivatives of palm oil which involves many hands and processes and I doubt very much that they will be able to trace all of it.

2.They may be setting up processing mills and what nots in Indonesia but if you look at current mess in Indonesia with plantations opening up left right and centre, will they be able to control where the source of their palm oil comes from? 

Brands like Seventh Generation have long said that they are not able to use physical sustainable palm oil because of the complex supply systems involved. Hopefully Unilever, with its massive appetite for palm oil, can overcome those problems.

As for announcements like Mondelez International to meet their goal for the use of sustainable palm oil, which will be through the use of Greenpalm Certificates and some physical sustainable palm oil, don't hold your breath. Its a fancy announcement that means little to actual sustainability of the product.

What do you think could be done to accelerate this progress Robert?

I understand your argument about the complexity of supply chains, but too many often use that as a poor excuse to not try harder.

David

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