The CSR of Conservation: Can what you eat endanger rainforests?
Globalization means that the world is connected in ways that was unimaginable just a few decades ago. But even in the face of this interconnected-ness, it would seem impossible to make the connection between consuming a Kit-Kat bar and deforestation of rainforests in Indonesia - but that's exactly how the world and CSR works.
Up until recently, it was believed that palm-oil was most widely used only in cosmetics. Since it is a cheap form of vegetable oil containing no trans-fats, it is now also widely used in food preparations. There are many brands using palm oil in their food products today - most of which can be found on the shelves of grocery stores the world over. China, India and Europe are the biggest buyers of palm oil.
Global demand for palm oil is now more than 40 million tons/yr making it the mainstay of Indonesian economy. Sinar Mas is the biggest supplier of Indonesian palm oil, it also has active interest in paper and wood pulp products and is one of the most unsustainable companies. Most of the land the company uses for palm oil cultivation was former rain-forests and peat-lands. It has also been accused of green-washing its shareholders on numerous occasions in its corporate activities. Ironically, palm oil is also a feasible source of bio-diesel.
The Round Table on Sustainable Palm Oil (RSPO) was formed to advance the sustainable production of palm oil. It is part of multi-stakeholder CSR codes which makes it a powerful rallying tool for companies. Sime Darby in Malaysia is also a major producer of palm oil, supplying 10% of the world market. However they already have plantations certified by the RSPO and have invested heavily in CSR initiatives. Two companies, two approaches, same product.
The intensive Greenpeace campaign targetting Nestle and Unilever resulted in their commitment to have fully sustainable supplies by 2015. Cosmetic company Lush proactively started a consumer awareness campaign on the palm oil issue and vowed to never use it in their products. According to them, the cosmetics industry uses 6-7% of the world’s palm oil as a main ingredient in many soaps. Henkel is another company conscious of where its palm oil comes from – it is also a member of RSPO and the aim of its CSR activities is that 100% of produced oil should come from sustainable sources. Walmart has also committed not to buy paper products from Sinar Mas.
The campaigns undertaken by Greenpeace and Palm Oil Action, an Australian based organization highlights the importance of social media for viralization of an issue. This was especially prominent in Greenpeace's Nestle Kit-Kat campaign highlighting the plight of the orangutan. In addition to spreading consumer awareness, there is a growing need for industry-based CSR governance to ensure multi-stakeholder accountability.
Total plantation area in Indonesia has grown dramatically, from 1.13 million hectares in the late 1980s to about 7.13 million hectares at present. A study in Conservation Letters in February estimated that if REDD (Reducing Emissions from Deforestation and Degradation) is included in a cap-and-trade market for greenhouse gas emissions, payments for "avoided deforestation" could range between $1,500 and $11,800 per hectare, depending on when the carbon credits are allocated and sold. In comparison, the oil palm market was estimated to generate a net present value between $3,800 and $9,600 per hectare over a 30-year period.
The connection between CSR and biodiversity conservation is a difficult one to make. It is even more difficult to convey the message to consumers but the fact remains that unless consumers demand sustainably cultivated palm oil in products, the destruction will continue. Something to think about when you decide to buy Pringles, Maggie Noodles, Sara Lee, KFC and a hundred other products: you just might be eating the rainforest, contributing towards global warming and possibly killing an orangutan.