How did the manufacturers perform?

The 2011 Scorecard shows some progress among the consumer goods manufacturers.

The best again are showing the way—but there are still too many lagging behind.
 
 / ©: WWF
Illustration for manufacturers - Palm Oil Scorecard
© WWF
Companies using substantial volumes of palm oil—more than 100,000 tonnes per year—have generally performed well in the Scorecard, with household names such as Nestlé and Unilever scoring 8 out of 9.

Unilever in particular uses more than 1 million tonnes of palm oil a year, placing them further ahead than any other company in the Scorecard (in terms of the amount of palm oil they use)—and they are the only company at this level using more than 50% certified sustainable palm oil.

These very big users of palm oil are faced with substantial logistical and cost challenges in moving to 100% RSPO-certified palm oil, and they should be acknowledged for what they have achieved so far.

However, they are also global brand leaders with substantial influence on the market. WWF hopes that they will continue to lead the way and to push themselves even harder to complete the job of transforming themselves and the rest of the palm oil industry.

This will include making the transition in their supply chains from Book and Claim certificates to Mass Balance and Segregated certified palm oil.

At a smaller scale—50,000 to 100,000 tonnes per year—companies such as United Biscuits (9) and Royal FrieslandCampina (8) drew the top score, while in the next category (10,000 to 50,000 tonnes), recognized brands such as Burton’s Foods, Cadbury, Premier Foods and Remia also set an example in terms of sustainable palm oil sourcing.

In the smaller size classes, while there were more top performers, WWF is disappointed that the palm oil industry remains plagued by a substantial number of laggard companies still choosing to run the risk of sourcing unsustainable palm oil, despite the availability of RSPO-certified palm oil, particularly in Europe.
 / ©: James Morgan  / WWF International
Palm fruit, having been harvested is piled up in order to be weighed.
© James Morgan / WWF International
WWF hopes that consumer goods manufacturers with a top score will continue to push themselves to help set the stage for transformation by the rest of the palm oil industry, including making the transition to Mass Balance and Segregated RSPO-certified palm oil.

RSPO membership

The majority of manufacturers scored were already members of the RSPO or have recently applied. “Manufacturers” is the fastest growing category of RSPO membership, reflecting a welcome shift in response to demands from retailers to act responsibly. The 8 non-members scored need to up their game at even this very basic level.

However, the companies scored are only a sample of the many thousands that are part of the palm oil supply chain—all of which should consider becoming RSPO members.

Commitments

Encouragingly, 61 companies have made public commitments to use only certified sustainable palm oil by 2015 and in some cases earlier.

But that leaves 27 with only vague commitments to sustainability in palm oil, or worse still, no policies at all.

This is worrying given that so many are already RSPO members, with some companies still not meeting the membership requirement to have a time-bound commitment to use only certified sustainable palm oil.

What do these commitments cover?

Unlike retailers, the majority of manufacturers that have committed to certified sustainable palm oil are applying these to all the lines they make—whether their own brands or products they make for others.

This makes sense for manufacturers who otherwise would have to create two separate production lines for sustainable and non-sustainable palm oil. This is welcome and bodes well for certified palm oil starting to enter the mainstream.

Transparency

Sixty-six of the manufacturers scored disclosed how much palm oil they are using. A further 14 were willing to put themselves in a size category; only eight were unwilling or unable to tell us how much they use.

This is a more appropriate level of openness than we have seen among the retailers scored, and one which should give a clear signal to the rest of the industry about the future prospects for certified palm oil.

Use of certified sustainable palm oil

It is very welcome that 68 of the 88 manufacturers scored reported that they are sourcing at least some certified sustainable palm oil already. Twenty-eight are sourcing between 75 and 100%.

But more than half are using less than 25% certified palm oil, or absolutely none at all. On average, the manufacturers are only using enough certified sustainable palm oil to cover 42% of their total palm oil use.

Why are manufacturers using so little certified palm oil?

Manufacturers can face challenges moving to traceable certified palm oil due to the wide range of derivatives and fractions of palm oil they use, and the multiple steps and companies involved in producing them.

However, for manufacturers producing goods to be sold to consumers, the Book and Claim system of buying certificates to cover the volume of palm oil used is a way to move quickly toward 100% RSPO-certified palm oil. 

This allows companies to take early action before sufficient traceable supply chain volumes are available for all the derivatives they use. Therefore, there is no excuse for the disparity between top scorers and other manufacturers.

What supply chain options are the manufacturers using?

Of the 68 that are using or supporting certified sustainable palm oil, 41 are using traceable supply chains for some of their volumes. WWF welcomes this step by manufacturers to start cleaning up the industry.

However, 52 manufacturers are using Book and Claim certificates, with 27 of them relying only on buying Book and Claim certificates to cover the palm oil they use.

More manufacturers need to start following the lead of their peers that are pushing to use traceable palm oil.

Is it time to move to fully traceable palm oil?

Manufacturers are key players in the market as they are in a position to push actors further up the chain.

In particular, they can push the refiners and processors and, through them, the traders that are key to shifting entire supply chains to fully traceable certified sustainable palm oil.

If the industry as a whole is to become more sustainable, this needs to happen urgently.
  • 88

    number of manufacturers assessed
  • 3,400,000 tonnes

    total volume of palm oil reported used by assessed manufacturers
  • 61

    manufacturers that are committed to 100% RSPO by 2015
  • 1,424,000 tonnes

    palm oil used by assessed manufacturers covered by RSPO certification

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