Tackling sustainability issues in the palm oil sector: Major brands and retailers share their experiences with WWF

Posted on 13 October 2020

The sustainability issues which continue to characterise the palm oil sector are widely known. From the destruction of tropical rainforests, loss of biodiversity, and significant carbon emissions, to the violation of the rights of indigenous people and local communities, palm oil cultivation has become one of the most controversial agricultural crops, leading to consumer boycotts against brands and products containing palm oil. 
Stakeholder groups regularly raise the alarm over these unsustainable production practices, including illegally produced palm fruit making its way into the supply chains of major traders and consumer goods brands, and human rights abuses afflicting the industry. Every year, watchdogs uncover harrowing cases of exploitation on oil palm plantations, as illustrated by the latest investigation into labour abuses on FGV Holdings palm plantations. Far from being isolated incidents, these occurrences are often the result of deeply rooted business practices that incentivise irresponsible production practices.
All of these are serious issues that the whole palm oil sector needs to urgently resolve. And companies play an important role in tackling them.
Over the past decade, businesses around the world have taken important steps to drive change. Commitments and actions by manufacturers, retailers and food service sector companies have grown significantly since WWF published its first Palm Oil Buyers Scorecard in 2009. But much more remains to be done in order to achieve a sustainable and responsible palm oil industry that benefits both nature and people. 
To effectively address the sustainability issues that persist in the palm oil sector, it is crucial that we better understand the key obstacles companies face in meeting their existing commitments, as well as new approaches and ideas that can help accelerate progress, collective action and industry-wide transformation.
In “Understanding the Journey: Shared experiences from companies on their transition to 100% sustainable palm oil”, WWF engaged with companies that scored “Middle of the Pack” or higher in the 2020 Palm Oil Buyers Scorecard to gain insight into their key achievements, roadblocks, and strategies they have used to progress on their sustainable palm oil journeys, as well as their future ambitions to deliver on their commitments. 
Despite some notable achievements, companies report grappling with several roadblocks which continue to hinder action on sustainable palm oil. For instance, more than 80% of companies cite accessibility to and demand for Roundtable on Sustainable Palm Oil (RSPO) certified sustainable palm oil (CSPO) as a key barrier to achieving their sustainability goals, highlighting challenges related to the lack of demand for sustainable palm products, along with limited availability and higher costs. 
Meanwhile, more than two-thirds of respondent companies mention difficulties tracing the origin of the palm products within their supply chains. This lack of visibility is often the reason critical environmental and social risks go undetected or unaddressed.
Although some might argue that such challenges illustrate all the more why a sustainable palm oil industry is impossible, they would be failing to see that solutions do exist and many companies are working hard to implement them. 
Our analysis found that a majority of respondent companies are actively engaging with suppliers to encourage and support their transition to 100% RSPO CSPO sourcing, with a number of retailers and smaller palm oil buyers reporting success in convincing their suppliers to extend this practice to all of their sourcing.
Companies are also taking action beyond their supply chain, which is essential to drive transformation of the palm oil sector at large. Of the 34 companies that submitted a case study to WWF, more than 70% report supporting on-the-ground projects in palm producing landscapes — such as smallholder initiatives, conservation projects or landscape/jurisdictional approaches — and more than 60% mention participating in action-oriented sustainability platforms and multi-stakeholder initiatives. 
But some approaches that are absolutely critical to eradicating harmful practices and achieving a sustainable palm oil industry are less commonplace. Less than 60% of respondent companies report exerting their influence over their suppliers by requiring them to only purchase palm oil that is traceable to the mill or plantation and/or deforestation-free. Similarly, only half of companies report that they are monitoring and managing the compliance of their suppliers through actions such as satellite monitoring or human rights verification protocols. This is despite the fact that traceability and monitoring systems are key to addressing some of the industry’s most prominent environmental and social issues, including deforestation, illegality, and human rights violations. 
As we look beyond 2020, it is more important than ever that we take swift action to transform the palm oil industry. While the 34 companies that have agreed to share their experiences with WWF make only a fraction of the entire palm oil sector, their case studies provide an insightful glimpse into the long and bumpy road that lies ahead. But with every challenge comes a solution, as well as an immense opportunity to achieve greater impact. This will however only be possible through shared learning and collective action.
This blog post was written by WWF Global Palm Oil Lead Michael Guindon.
WWF asked companies included in our Palm Oil Buyers Scorecard to provide insights into their journey to 100% sustainable palm oil. Download the summary report to see what we learned.