Scoring palm oil buyers on their sustainability commitments

2015 was supposed to be a tipping point for the palm oil industry — so how are companies that purchase palm oil for use in their products faring in terms of achieving their sustainability goals? A new “Palm Oil Buyers Scorecard” released by the World Wildlife Fund (WWF) found decidedly mixed results.

2015 was supposed to be a big year for the palm oil industry — the year it proposed to reach a “tipping point” and begin predominantly producing and trading palm oil that was not responsible for the destruction of forests, abuses of human rights, and other problems that have plagued the production of one of the fastest-growing agricultural commodities in the world.

Palm oil can be found in everything from cookies, peanut butter, and chocolate to lipstick, laundry detergent, and candles. It accounted for nearly 40 per cent of global vegetable oil consumption between 2014 and 2015, according to a report released this month by the U.S. Department of Agriculture.

The growth of palm oil production over the past several years has had dire consequences for tropical forests, which have been cleared for oil palm plantations at alarming rates, as well as the people and wildlife that call those forests home. Indonesia and Malaysia, which together produce nearly 90 per cent of the world’s palm oil, have suffered a disproportionate amount of these impacts.

Many businesses have pledged to address the contribution their operations make to the destruction of rainforests for palm oil, and 2015 became an important target by consensus. Consumer companies like General Mills, Kellogg’s, Nestlé, PepsiCo, and Unilever; fast food companies like McDonald’s and Starbuck’s; makers of cosmetics and personal care products like Avon; and retailers like Marks & Spencer all made major commitments to use certified sustainable palm oil in their products by 2015.

While many companies have made commendable strides forward and honoured their commitments, others have made little progress or taken no action at all.

WWF

Even some countries, like the Netherlands and Belgium, said they would drop palm oil linked to deforestation and other environmentally damaging practices by 2015.

As for how companies that purchase palm oil for use in their products fared in terms of achieving these goals, however, a new “Palm Oil Buyers Scorecard” released by the World Wildlife Fund (WWF) found decidedly mixed results: “While many companies have made commendable strides forward and honoured their commitments, others have made little progress or taken no action at all,” the group says.

The scorecard reports the results of WWF’s analysis of 137 retailers, manufacturers, and food service companies from Australia, Canada, Europe, India, Japan, and the United States that collectively use more than six million metric tons of palm oil, 10 per cent of all palm oil traded around the globe.

WWF chart via Mongabay.com

The group looked at what it calls the “core actions that any responsible company that uses palm oil can and should be taking to show commitment and support producers that are acting responsibly,” namely: join the Roundtable on Sustainable Palm Oil (RSPO); make a time-bound commitment to buy only palm oil certified as sustainable; actually start buying sustainable palm oil in order to honor that commitment; and publicly report on the progress made towards achieving these goals.

WWF also examined how quickly the global name-brand companies it evaluated are shifting their use of certified sustainable palm oil to physically segregated supply chains in order to ensure that uncertified and potentially unsustainable palm oil is not able to creep back into their products.

Out of the 137 companies, WWF found that only 78 had made commitments to use 100 certified sustainable palm oil by 2015, while 30 have not made any kind of public commitment whatsoever. 110 of the 137 companies are RSPO members, either directly or through subsidiaries.

According to the scorecard, 109 of the 137 companies reported on their progress to WWF or to the RSPO. WWF noted that “unfortunately too many companies are still being secretive about their efforts,” adding, “It is vital that companies understand their progress on palm oil and are transparent in sharing this with customers and stakeholders… Only by setting targets and reporting on progress publicly can companies show their customers how well they are doing and can stakeholders understand how quickly the industry is progressing.”

Just 96 companies reported using any certified sustainable palm oil in 2015, the scorecard states. Additionally, WWF determined that “Of the 77 who said they would only be using [certified sustainable palm oil] by 2015 only 56 hit their target. Seven of the companies assessed fell short by 50 per cent or more.”

Though these results amount to what WWF called a “pessimistic story,” the group did find that there are companies, both large and small, that are making significant progress. The companies that did use some certified sustainable palm oil in 2015 bought almost 4.7 million metric tons, which WWF said would send “a powerful message to the growers that are getting certified.”

But only 15 per cent of all the palm oil that companies told WWF they used in 2015 was sourced through a fully segregated supply chain. Just three companies used 100 per cent segregated sustainable palm oil in 2015 — Arnott’s, Danone, and Ferrero. “Their impressive efforts show that it’s possible for even large users of palm oil (like Ferrero) to get their sourcing on a more sustainable footing,” the authors of the scorecard write.

Still, there is a lot of room for improvement. “While many brands have taken the first step on the core actions needed, fewer are taking this second step on the journey,” the authors concluded. “As deforestation, climate change and conflict continue to plague the unsustainable palm oil industry, we need to see companies urgently ramp up their efforts and not just stop after the first step.”

This story was published with permission from Mongabay.com

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