Posted on April, 18 2024
18th April 2024: The 7th iteration of the WWF Palm Oil Buyers Scorecard sheds light on the current state of sustainability efforts within the palm oil industry. The scorecard marks a critical juncture in the industry's journey towards sustainability, revealing both progress and persistent challenges. Despite some progress, the average score of companies stands at only 14.7 out of 24, highlighting the significant distance that remains to establish sustainable palm oil supply chains. With the demand for palm oil set to grow, urgent action is imperative to address issues such as deforestation and ecosystem conversion in tropical regions along with smallholder inclusion.
In the 2024 Palm Oil Buyers Scorecard, WWF approached 285 major retailers, consumer goods manufacturers, feed, and biofuel companies on their commitments and actions in favour of a sustainable palm oil industry. Our scoring methodology now aligns closely with the European Union Deforestation Regulation (EUDR), reflecting the growing importance of regulatory compliance in promoting responsible sourcing practices. By incentivizing companies to attain full traceability and adhere to regulatory requirements, we aim to drive industry-wide improvements in transparency and accountability.
French consumer goods manufacturer Cérélia claimed the top position with a score of 23 points out of 24. Italian consumer goods manufacturer Ferrero, John Lewis Partnership, and Marks & Spencer-both UK retailers, and German retailer Lidl are among the top 5 companies.
Commitments: Encouragingly, a majority of companies are adopting robust commitments to address environmental and social risks in their palm oil supply chains. However, there is a need for clearer timelines and strategic planning to ensure the effective realisation of sustainable sourcing goals. While 91% of respondents have committed to sourcing 100% RSPO-certified palm oil, there is a concerning lack of a specific timeframe.
Purchasing of Sustainable Palm Oil: The scorecard also finds that 41% of respondent companies are still not sourcing 100% RSPO-certified sustainable palm oil, highlighting the need for companies to swiftly boost their sourcing of certified sustainable palm oil. The reliance on supply chain options like Mass Balance and Book & Claim credits presents a stark deficiency in commitment to sustainability, as these options do not offer the most robust environmental and social safeguards.
Supplier Accountability: Companies are extending their sustainability commitments to include suppliers, with 47% requiring suppliers to have policies on deforestation and human rights abuse. Companies are making strides in traceability, with 40% having some level of traceability. Robust monitoring and verification systems are needed to ensure supplier compliance.
WWF’s palm oil scorecard also examines actions companies are taking beyond their own supply chains to support a sustainable palm oil industry.
Sustainability Platforms: Most palm oil buyers are engaging in collective action and advocacy efforts through initiatives and platforms to address sustainability challenges across the palm oil supply chain. However, only 8% of respondents scored full points on RSPO’s shared responsibility scorecard.
On-the-Ground Action: A significant number of companies are expanding their efforts beyond their supply chains to drive positive change in palm oil-producing landscapes, supporting conservation projects, smallholder capacity building, and jurisdictional approaches. The scorecard introduced significant changes this year, emphasising alignment with Accountability Framework Initiative (AFI) Operational Guidance (OG) to ensure companies contribute to broader sustainability goals.
However, over half of the companies approached by WWF (157 out of 285) chose non-disclosure regarding their palm oil usage and sustainability efforts. This lack of transparency poses reputational risks and indicates a disregard for responsible business operations.
There is enormous potential for companies to make rapid and meaningful strides towards a sustainable palm oil industry. Among this year's respondents, Grupo Bimbo, Lidl Stiftung & Co.KG, Marks & Spencer, and Sainsbury’s stand out for their remarkable improvement in scores since the 2021 assessment. Their progress serves as a commendable example, inspiring others to similarly enhance their sustainability efforts.
Anne-Laure Faure, Senior Engagement Manager, Global Palm Oil, said: “WWF's 2024 Palm Oil Buyers Scorecard highlights both progress and challenges in the journey towards sustainable palm oil sourcing. It is imperative for palm oil buyers to prioritise transparency, traceability, and supplier accountability to drive meaningful change across the industry. By taking decisive action now, companies can help safeguard forests, biodiversity, and the rights of local communities dependent on these vital ecosystems.”
Palm oil buyers must act swiftly to ensure the sustainability of their supply chains, as the demand for palm oil continues to rise, exacerbating the pressure on forests and biodiversity. The Global Stocktake outcome from COP28, a pivotal document, underscores the urgent need to halt deforestation and forest degradation by 2030, promote nature-based solutions and sustainable food systems, and ensure social and environmental safeguards aligned with the Global Biodiversity Framework. These principles are directly relevant to the companies utilising palm oil to address the sustainability challenges associated with palm oil production.
Prachi Jadhav, Manager Communications and Advocacy, Global Palm Oil, said, “Despite occupying only 6% of global land used for vegetable oils, oil palm cultivation contributes a significant 40% of the world's vegetable oil. While lauded for its efficiency, rapid expansion into biodiverse tropical forests has resulted in detrimental impacts such as deforestation, habitat loss, and biodiversity decline.”
“Palm oil is the most efficient vegetable oil, yielding more per hectare than soybean, rapeseed, or sunflower. Substituting it with these alternatives could require significantly more land, impacting habitats and biodiversity. Shifting from palm oil doesn't reduce overall demand due to market dynamics. Its sustainability hinges on industry commitment to refine production and supply chains. Prioritising traceability and supporting smallholders can lead to a more ethical and environmentally conscious market,” added Jadhav.
The report emphasises the urgent need for action within the palm oil industry to address deforestation, human rights abuses, and other sustainability challenges. Palm oil buyers must translate promises into tangible measures to combat these pressing issues.
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For more information:
Scorecard findings, methodology and recommendations are available at: palmoilscorecard.panda.org/
Details on each company’s performance are also available on the website, as well as filterable data visualisations and tables showing how companies are performing in comparison with others.
Considering the nature and climate crises at hand, WWF’s latest assessment measured how companies are taking basic steps to clean up their own palm oil supply chain, in addition to examining additional actions they are taking to drive large-scale transformation across the entire industry. WWF’s expanded set of expectations and criteria is closely aligned with the core principles of the Accountability Framework initiative, a globally applicable roadmap that offers detailed guidance for commodity buyers to build and scale up ethical supply chains that are free of deforestation and conversion, and respect human rights.
Contact:
Prachi Jadhav (pjadhav@wwf.sg), Manager, Communications and Advocacy
