Are buyers of palm oil doing enough?

In the journey toward sustainable palm oil, a substantial number of companies are making commendable progress to reduce their impact on deforestation according to the WWF Palm Oil Buyers' Scorecard 2011.

In 2009, no company received a top score, but in 2011, 29 out of 132 have – and most of the companies scored in both 2009 and 2011 have shown real progress.

This shows how taking action on palm oil has become much more mainstream compared to a few years ago, but it also highlights the distance some companies still need to go toward sustainable palm oil.

This Scorecard represents a snapshot in time of company performance, showing how well they are performing in relation to each other in 2011.

Most of the top performers still have a long journey ahead of them – they need to continue to increase purchases of sustainable palm oil and in most cases, move to traceable supply chains before the target date of 2015. Indeed, many companies have set a target year of 2015 for buying 100% certified sustainable palm oil.

Moreover, while a number of companies have achieved the top score, this does not mean they have reached the peak of sustainability with regards to palm oil.
 / ©: Jürgen Freund / WWF-Canon
Aerial of palm oil plantation with milling factory, Kimbe Bay, Papua New Guinea
© Jürgen Freund / WWF-Canon

KEY FINDINGS

The analysis reveals that too many companies have still not even taken the basic first step of joining the RSPO to begin the process of sourcing sustainable palm oil. Only 103 are already members, while 9 have applied recently, and there are 20 that have not shown any interest in doing so.
 / ©: WWF
Click here to explore company scores using our interactive tool
© WWF
12 of the RSPO members have not reported as required on their progress this year. Annual reporting is essential to demonstrate progress in this new market for sustainable palm oil—but is too often ignored.

In doing well, some companies have demonstrated that, regardless of size, it is possible to be a responsible member of the RSPO, to make strong public commitments to sustainable palm oil, to be transparent about how much palm oil they use and to lead the way on using RSPO-certified palm oil now.

Only 88 companies assessed have disclosed to WWF how much palm oil they are using annually, but a further 21 agreed to be placed within published size categories. 23 would not tell us anything about their palm oil volumes. WWF considers disclosure of palm oil use to be a fundamental step in the process toward transforming the palm oil market.
25 companies have no public commitments on palm oil that we were able to find.
Commitments to use certified sustainable palm oil are even more valuable if other companies and suppliers know what volumes they represent.
Encouragingly, 103 of the companies in the Scorecard reported that they are already using some certified sustainable palm oil, which amounts to about 1.5 million tonnes in total.
But only 47% of the total palm oil currently used by these companies is certified sustainable palm oil, or covered by Book and Claim certificates (see Palm Oil Supply Chains ►)
The global picture
While Europe is currently a major market for palm oil, China and India will soon overtake it (see China and India market profiles).

Clearly, in order to shift the global market toward certified sustainable palm oil, India and China, and even Indonesia (also a very large consumer of the palm oil it grows), will need to increase their use of sustainable palm oil.

For Chinese and Indian buyers, sourcing RSPO-certified palm oil would be the best way to avoid the risk of being associated with “tainted” palm oil, while ensuring a sustainable supply of palm oil in their developing markets well into the future.

But both markets are very price sensitive, have traditionally low levels of consumer demand for sustainability and are heavily shaped by government policies. In these countries, market and consumer pressure alone are not enough.

Multinational companies—including several companies in the Scorecard (Carrefour, Nestlé and Unilever)—that have made global commitments to, and reported on their global use of, RSPO-certified palm oil have a part to play in introducing these commitments to Asia.

US companies, not scored here because of the relatively low levels of domestic consumption of palm oil, are also key to the long-term growth in sustainable palm oil because of the role they play in global markets (see US market profile).

Many companies have set a target year of 2015 for buying 100% certified sustainable palm oil, but WWF is particularly concerned that they do not seem to be taking the necessary steps to make sure that they can deliver on this goal.

There needs to be more action now; companies should set annual milestones toward their target to source 100% certified sustainable palm oil by 2015 and deliver on their commitments early, if possible.

 / ©: James Morgan  / WWF International
Close-up of palm fruit waiting for transportation to the mill.
© James Morgan / WWF International

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