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The controversy over palm oil continues: Focussing on sustainable supplies

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Palm oil is a key ingredient in a wide range of food and cosmetic products with demand rapidly expanding. Consumption of this oil is predicted to double by 2030 and to triple by 2050. Seventy percent of palm oil ends up in food products from cooking oils to margarine, chocolate and most baked goods.  

The controversy over palm oil continues:  Focussing on sustainable supplies

The use of palm oil continues to pose many challenges to food businesses whilst providing a key, low cost ingredient suited perfectly for the formulation of many manufactured products. Consumers and NGO’s highlight the potentially damaging impact of unsustainable production practices in Malaysia, Indonesia and other producing countries.  The recent controversy over Iceland’s Christmas advert portraying the impacts of deforestation caused by palm oil production highlights the continued sensitivity around this topic.

Palm oil has benefits

Palm oil is used in a wide range of products from food to cosmetics and is, despite the controversy, a very important ingredient. Palm oil can be very high yielding, producing more oil per hectare than any other crop, and represents 38% of the world’s supply of edible oil, and yet it is grown on only 5% of the land dedicated to oilseed crops globally. With demand for edible oils growing there is a need to produce more oil from less land and to minimise the environmental and social impact of production.

What can food businesses do to ensure they are sourcing sustainable palm oil?

Food businesses face multiple challenges when sourcing raw materials like palm oil which are considered to be ‘forest risk’ commodities.  The first hurdle is to be able to map the use of palm oil in their products, and to then trace the origin of their supplies.  Businesses may be able to trace back to their Tier 1 suppliers but digging deeper into the supply chain is more difficult.  Developing clear strategies for ensuring that a business’s procurement of palm oil is not directly or indirectly driving deforestation or other social and environmental problems is key to avoiding both operational and reputational risk.  Business strategies that include incremental targets for making improvements in procurement practices for sustainable palm oil can help drive continuous improvement and these messages may be conveyed to consumers to help raise awareness of the challenges businesses face. 

There are voluntary programmes in place to help companies navigate through these palm oil challenges.

Roundtable for Sustainable Palm Oil (RSPO)

The Roundtable for Sustainable Palm Oil (RSPO) is a voluntary organisation that promotes sustainable practices in the palm oil industry and has a standard that is used by many organisations to reduce the impact of their palm oil use.  In a previous article we wrote about RSPO in more detail and how there is a need to increase the visibility of RSPO certified products to help inform consumers.

Forward thinking businesses are taking steps to work with growers and mills to encourage sustainable palm oil production, rather than boycotting the use of the product altogether. Sustainable production of palm oil can lead to important economic benefits for local communities in key palm oil producing regions.  The RSPO’s recently published Impact Report provides some useful graphics highlighting their progress.

 

WWF Palm Oil Buyers Scorecard

The organisation, WWF, is also a key stakeholder concerned about the responsible and sustainable production of palm oil. They have produced a scorecard that scores 137 companies on their use of sustainable palm oil. In their 2016 survey, high profile retailers such as Waitrose, Sainsbury’s and Marks & Spencers, and food manufacturers such as General Mills, Kelloggs, Danone and PepsiCo have achieved top scores in this scorecard.  Companies are scored every two years and need to show continuous improvements across their supply chains.  The WWF’s palm oil scorecard is publically available so companies with low scores may be named and shamed. 

Building robust systems

Food businesses need to ensure they understand how they are using palm oil in their products and need to know their sources of palm oil and where it enters their supply chain. Food businesses should ensure they have robust, and well communicated policies understood by all their suppliers. Monitoring of the supply chain is key, with a continuous dialogue along their supply chain to ensure clarity.

ADAS can support food producers and their supply chains by helping to map palm oil in their products, developing and implementing responsible sourcing strategies, and communicating these strategies both to suppliers and to other external stakeholders such as consumers.

To learn more about how ADAS’s Sustainable Food and Farming Team can help you with your responsible sourcing strategies, visit http://www.adas.uk/services/Responsible-Sourcing

To discuss how ADAS can support your business in understanding palm oil use, setting palm oil strategies, and communicating positive messages with stakeholders please contact Leslie Berger or Emily Mason.

 

 

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