Businesses have been challenged to step up their efforts to source sustainable palm oil after new analysis found the majority of the world's biggest palm oil companies do not know where it originates from.
Although more than two thirds of the largest producers, processors and traders of palm oil have zero deforestation commitments in place and more than half have commitments to respect the rights of local communities – most companies do not have a full understanding of the origin of all palm oil in their supply chain nor a robust monitoring system in place to ensure palm oil meets their sustainability commitments, according to the report by ZSL.
The analysis showed that only 18 out of 83 (22%) companies report that they can trace 100% of the raw materials arriving at their own mills back to the plantation where it was grown, while no companies that purchase palm oil from external suppliers are able to trace 100% of their supply back to the plantation.
Palm oil is a staple ingredient in the food industry found in around 50% of packaged goods including shampoos, biscuits and bakery products. A significant increase in its production from 4.5m tonnes in 1980 to over 70m tonnes today has been associated with the destruction of tropical forests, declines of endangered wildlife and displacement of local communities.
Some businesses, such as the retailer Iceland, have committed to stop using palm oil in their own products; however experts say boycotting palm oil is not the way forward since it means switching to less efficient vegetable crops which risks larger areas of precious wildlife habitat being destroyed.
ZSL is calling on businesses involved in the palm oil supply chain to meet their sustainability commitments by monitoring their full supply chain and investing in traceability systems to ensure compliance against their sourcing policies. It is also calling on businesses to ensure they purchase from suppliers who employ this same strategy, and to purchase palm oil from credible certification schemes such as the RSPO (Roundtable on Sustainable Palm Oil).
"Achieving 100% traceability in the palm oil sector is difficult as palm oil supply chains are extremely complex, with palm oil moving between several intermediaries before it makes its way into a product on supermarket shelves,” said Michael Guindon, ZSL's palm oil technical advisor.
"Understanding one's supply chain is a critical step; however, it's only one piece of the puzzle,” he added. “More importantly, companies should not only understand their supply chain thoroughly. They also need to use their buying power and work intensely to enforce the highest sustainability standards in every palm oil provider they do business with."