Ethical Corporation is now Reuters Events - LEARN MORE
From Wilmar and Golden Agri Resources to Kellogg and Hershey, big companies are leading the way by committing to sourcing sustainable palm oil, says Gina-Marie Cheeseman
The palm oil industry has long been criticised by environmentalists and human rights organisations for causing environmental destruction, including deforestation, and for the ill-treatment of workers.
Today, things are changing. A number of companies have recently committed to sourcing sustainably produced palm oil. Among the companies to shift towards 100% sustainably produced palm oil is Golden Agri Resources (GAR), a Singapore-based company and the world’s second largest palm oil plantation company.
GAR’s Forest Conservation Policy, established in 2011, was the first by a major palm oil company. The company announced in a recent filing with the Singapore Stock Exchange that its policy will apply to all of its palm oil operations. In other words, the company is pledging that none of the palm oil it produces and sells will be responsible for deforestation.
Wilmar International, the world’s biggest palm oil processor (ie as opposed to plantation owner), is also shifting to sustainably produced palm oil. Wilmar has a distribution network spanning more than 50 countries and controls 45% of global palm oil trade.
Greenpeace investigations had linked large companies, including Colgate Palmolive and Procter & Gamble, to Wilmar, a company whose reputation has been repeatedly damaged by revelations about the impacts of its operations. Wilmar announced in December a shift to a no deforestation policy, agreeing to end the deforestation of rainforests and to protect the habitats of endangered species.
Over the years, other companies have made similar commitments, including Nestlé in 2010. Hershey has pledged to source 100% sustainably certified palm oil by 2014. Unilever, one of the biggest buyers of palm oil, announced in 2013 that by 2020 all of the palm oil it buys will come from certified traceable sources.
While not currently a particularly large purchaser of palm oil, Kellogg is another major company that recently made a new deforestation and traceability commitment. Kellogg, which produces more than 1,600 food products, had sales of $14.8bn in 2013. These commitments, by Kellogg and other large corporations, have the potential to shape the industry.
The shift to sustainably produced palm oil comes at a time when prices are high. Recently, palm oil prices have increased to their highest in almost a year and a half. Tensions between Russia and Ukraine have been identified as a reason behind the high prices, as palm oil is seen as an alternative source of fuel in the event of disruption to supplies of natural gas.
The increased prices mean that palm oil producers and the companies that source from them must continue commitments to sustainable palm oil. The fact that major companies have made commitments to source sustainably produced palm oil is a good sign that the industry will slowly, and hopefully surely, shift away from deforestation.
Gina-Marie Cheeseman is a freelance journalist who covers social justice and environmental issues.
This was first published on www.betterpalmoildebate.org.Activism deforestation Golden Agri Greenpeace Human rights Palm Oil Singapore
May 2014, London, UK
Make sustainable innovation add to your bottom line. 15+ CEOs and C-Suite from leading multinationals plus heads of CSR will discuss the future of sustainability