Despite the fact that Southeast Asia is the heartland of the global palm oil industry, the majority of Singapore and Malaysia’s most popular food brands are not reporting their palm oil use in a transparent manner or using sustainably sourced variants of the commodity, a new study by the World Wide Fund for Nature (WWF) has found.
Released on Thursday, the conservation group’s Palm Oil Buyers’ Scorecard—Malaysia and Singapore assessed 47 retailers, manufacturers and food service providers in the two countries on how transparent they were about their palm oil usage, and whether they sourced sustainable palm oil. The companies were selected on various criteria including market share, brand recognition, and regional presence.
A ubiquiquitous commodity that is present in nearly half of all products on supermarket shelves, palm oil is a useful crop, and one that has the potential to lift rural Southeast Asia out of poverty by providing agricultural livelihoods. But unsustainable practices in the industry have been widely blamed for deforestation in countries like Indonesia and Malaysia.
To encourage sustainable production practices, growers, civil society organisations and manufacturers in 2004 set up non-profit industry association Roundtable on Sustainable Palm Oil (RSPO). RSPO operates a certification scheme for environmentally and socially responsibly grown palm oil.
In WWF’s study, which awarded points not just for RSPO membership and certification but also for commitments to buy certified palm oil, overall sustainability plans, and memberships of palm oil sustainability initiatives that go beyond RSPO, only 16, or 34 per cent, of the companies surveyed disclosed palm oil usage.
The remaining 31 firms—17 from Singapore and 14 from Malaysia—declined to respond to WWF, or ignored their engagement efforts, which involved multiple phonecalls, emails, and registered mails.
Out of the 16 companies that responded, eight of them scored points for supporting responsible palm oil, while the other half reported no actions to do so.
Two brands—Denis Asia Pacific, the firm behind Ayam Brand prepared foods; and Wildlife Reserves Singapore (WRS), which owns and operates Singapore’s Zoo—earned top marks in the scorecard.
Both firms already source sustainable palm oil, are members of RSPO and engage with others in the industry through platforms such as the Southeast Asia Alliance for Sustainable Palm Oil. The latter initiative does not certify palm oil, but provides a means for companies at various stages of the palm oil supply chains to collaborate with one another on sustainability.
Roy Teo, Ayam Brand Singapore’s managing director, said that “while our consumption of palm oil is limited, it is possible to make sustainable choices even when manufacturing in smaller volumes”.
“We see this business decision paying off through increased employee satisfaction, higher brand value and new business opportunities in Europe, US and, Australia where sustainable palm oil has become a market entry criteria,” he added.
Sonja Luz, director of conservation and research for WRS, which uses palm oil for cooking in its food and beverage outlets—said that the process of shifting to sustainable palm oil use took months, “but it is definitely worthwhile as all of us are convinced that this supports our case; to protect wildlife and conserve biodiversity”.
We see this business decision paying off through increased employee satisfaction, higher brand value and new business opportunities in Europe, US and, Australia where sustainable palm oil has become a market entry criteria.
Roy Teo, managing director, Ayam Brand Singapore
Firms that responded to WWF but scored poorly on WWF’s scorecard included drink manufacturers Fraser and Neave (F&N) and Yeo Hiap Seng, Sheng Siong Supermarket, and Tat Hui Foods, which makes the popular Koka instant noodles. Most of these firms source little to no certified sustainable palm oil, and all of them lack any form of public disclosure about their sourcing practices.
WWF noted that many of the brands cited consumer indifference and higher costs as a barrier to sustainable sourcing, but that better alternatives can cost as little as one cent more per litre. Firms can buy “book and claim” offset credits for this price; these work in a similar fashion to carbon offsets, and allow companies to purchase certificates to boost their sustainability credentials.
Meanwhile, the firms that ignored or chose not to respond to WWF included popular brands like restaurant chains Secret Recipe, Tung Lok Group; baked good chains BreadTalk, Polar Puffs & Cakes; biscuit makers Khong Guan, and supermarket operators Prime Supermarket and Dairy Farm Group.
Most of these firms did not respond to Eco-Business’s request for clarification by publication time, with the exception of Tung Lok Group.
Its president and chief executive officer Andrew Tijoe told Eco-Business: “We are all for sustainability. Therefore we only use RSPO-certified cooking oil, even though it costs us more”. However, the firm did not provide evidence to show that it uses certified sustainable palm oil, or explain why it did not respond to WWF’s multiple outreach efforts.
Elaine Tan, chief executive officer, WWF Singapore, said that “unsustainable practices in the palm oil industry are at the root of the transboundary haze and deforestation.”
“Singapore’s local brands need to show leadership by being accountable for their palm oil use and take real action to source sustainably,” she added.
Lagging behind the world
The scorecard for local brands also paints a bleaker picture than WWF’s Global Palm Oil Buyers Scorecard, which it has been producing since 2009. The latest edition, published in 2016, saw 80 per cent of global brands respond to WWF; 60 per cent of them had commitments to sourcing sustainable palm oil.
Gayathri Velayutham, Asean outreach and engagement manager, RSPO, said: “Although awareness among consumers in Singapore and Malaysia is not as high as it could be, this is rising fast.”
“Risk of inaction now, may cause further damage down the road as it is the responsibility of local brands to be more transparent and proactive when it comes to sourcing sustainable palm oil,” noted Velayutham, adding that RSPO has launched several consumer awareness campaigns to educate the public on the need for sustainable palm oil.
WWF also launched its own campaign alongside the scorecard on Tuesday, which encourages consumers to email local brands via a web platform and urge their top executives to take a pledge to be transparent about palm oil use, as well as to take steps to source sustainable palm oil.
Some firms that have already signed the pledge in the lead up to the report’s publication are: Bee Cheng Hiang, Commonwealth Capital, Super Group, and Tung Lok.
WWF’s Tan noted that “people want to know what goes into the products they buy, and the real impact of it”.
“Through this campaign, we hope to demonstrate to popular local brands that their customers want them to do their part in a preventable environmental problem”, she added.