Consumer goods giants under fire for poor palm oil record

Italian confectionery maker Ferrero is leading the consumer goods industry on sustainable palm oil procurement while household names Colgate-Palmolive, Johnson&Johnson, and PepsiCo are the biggest laggards, according to a new scorecard by Greenpeace International.

Greenpeace International on Thursday released a new report slamming consumer goods giants such as Colgate-Palmolive, Johnson&Johnson, and PepsiCo for failing to cut deforestation out of their palm oil supply chain.

The scorecard ranked the 14 global companies which have made no-deforestation promises in recent years on their performance in three key areas: responsible sourcing of palm oil; transparency about their supply chain; and their support for wider industry reform. 

The 14 corporations were: Colgate-Palmolive, Danone, Ferrero, General Mills, Ikea, Johnson & Johnson, Kellogg, Mars, Mondelez, Nestle, Orkla, PepsiCo, P&G and Unilever.

Greenpeace found that none of the firms could confirm that there is no deforestation in their supply chain despite promising so, nor had a single company published a full list of its palm oil suppliers. Most of them also did not have any external verification to prove that their palm oil is sustainable.

Annisa Rahmawati, forests campaigner, Greenpeace Indonesia, said in a statement that “palm oil is found in so many products, which is why brands have a responsibility to their customers to act”. 

The ubiquitous commodity is used in goods ranging from food to soaps and lotions to cosmetics, but the industry’s expansion has been widely blamed for accelerating deforestation in countries like Indonesia and Malaysia. 

In Indonesia, smallholder farmers often burn land to make way for oil palm plantations. This practice is cheaper than using bulldozers and other equipment to properly clear land, and results in an annual smog which plagues the archipelago nation and its Southeast Asian neighbours every year. 

Greenpeace’s scorecard on consumer goods companies zero-deforestation policies. Image: Greenpeace

Under fierce pressure from environmental groups, affected communities, and members of the public to address the crisis, palm oil companies and consumer goods firms alike have in recent years made ‘zero deforestation’ promises, which prohibit palm oil cultivation on forest land, peat soil, and ban the use of fire to clear land. 

The Roundtable on Sustainable Palm Oil (RSPO), an industry association, has a certification scheme which certifies palm oil grown in an environmentally and socially responsible way. This oil, which is sold at a premium price, accounts for 21 per cent of the global palm oil supply.

“Palm oil can be grown responsibly without destroying forests, harming local communities or threatening orangutans,” said Rahmawati. “But our survey shows that brands are not doing enough to stop the palm oil industry ransacking Indonesia’s rainforests.”

Less GreenPalm, more transparency

Italian confectionery maker Ferrero, which topped the scorecard, is the only firm whose palm oil is fully traceable back to the plantation where it was grown. This is an important requirement for confirming the commodity is deforestation free.

Ferrero also scored well for its membership in the Palm Oil Innovation Group, which advocates greater transparency and higher sustainability standards in the sector than those set by RSPO.

The worst-ranked companies were personal care product giants Colgate-Palmolive and Johnson&Johnson, along with food and beverage behemoth PepsiCo. All three are American firms and announced zero-deforestation policies in 2014.

Greenpeace noted that rather than buying actual certified sustainable palm oil, Colgate-Palmolive and PepsiCo rely on GreenPalm for their sustainability credentials. GreenPalm is an independent programme operated by Book&Claim Limited, a United Kingdom-headquartered company. 

This is the palm oil equivalent of purchasing carbon credits, where companies do not purchase actual sustainable palm oil, but pay for certificates which allow them to claim sustainability credentials. The money from certificate sales goes to support sustainable palm oil cultivation.

Instead of using GreenPalm, “companies need to start getting physical certified palm oil to a high standard, beyond RSPO”, said Rahmawati.

“We understand this does not happen overnight, but there is a clear distinction between companies that are moving in that direction and the ones that remain focused on using GreenPalm.” 

She also pointed out that even though sustainable palm oil is only a fifth of the world’s supply, RSPO has said that “supply currently outstrips demand”, suggesting that this lack of demand is the real problem.

All three companies have also not revealed their full supplier lists - something no other company on the scorecard has done - and their ability to trace palm oil back to the mill is lower than that of their competitors, said Greenpeace. 

When contacted for responses to the index, Johnson&Johnson told Eco-Business that “we are implementing programmes across the world to limit our footprint and environmental impact”.

Steps taken include establishing its Responsible Palm Oil Sourcing Criteria in 2014, which prohibits development on high carbon stock forests, peatlands, and burning land to clear it.

Johnson&Johnson also works with non-profit consultancy The Forest Trust to monitor its supply chain for compliance, said the company, adding that it has removed one supplier for violating its standards, and will continue to monitor its supply chain. 

In a separate statement, Colgate-Palmolive said that “we’re proud of our goals to fight deforestation and our progress towards them, including working with The Forest Trust and the Roundtable on Sustainable Palm Oil (RSPO)”.

The certified oils and GreenPalm certificates the company has bought have contributed nearly US$8 million to support sustainable palm oil production since 2013, said the company.

It added that it aims to have a fully deforestation-free palm oil supply chain within four years, and will work with Greenpeace and others on tracing back its supply to the mill.

With another burning season looking likely this year, Greenpeace called on consumer companies and growers alike to speed up their efforts to improve the industry’s transparency and eliminate deforestation from the supply chain, as “the situation is critical for Indonesia’s forests”. 

Rahmawati said: “This is the moment that the industry needs to work together to prevent the greatest environmental crime of the century from happening again.”

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