21 Percent of Palm Oil Now Responsibly Sourced

According to the Roundtable on Sustainable Palm Oil (RSPO), almost 12 million tons, or 21 percent of the global supply of palm oil, is now certified as responsible and sustainable. According to SCS Global Services, a certification and auditing firm, several factors are behind the growth of sustainably sourced palm oil, including increased consumer demand and government regulations. Earlier this spring, for example, the European Union suggested a ban on the imports of palm oil for biofuel. In addition, more food companies are committing to ending deforestation within their supply chains, which helps drive up demand for RSPO-certified palm oil.

“We're really pleased to see RSPO certified sustainable palm oil achieve more than 1/5th of the market,” said an RSPO spokesperson in an emailed statement to TriplePundit. “We also know that we have a lot of work to do to transform the palm oil market to make sustainable palm oil the norm, and we know we must set and implement a standard that is credible and leverages on global markets, and at the same, leaves no one behind.”

According to Darrel Webber, the CEO of RSPO, improvements in the monitoring and auditing of palm oil operations have also helped the organization’s cause. Grievances related to working conditions and human rights are also being handled more quickly. The organization has also found more success in partnering with governments to help shape policies that improve environmental protection while assuring companies that their sustainable supply chains are, indeed, more responsible and sustainable.

Meanwhile, pressure from NGOs on companies reliant on palm oil is also making a difference. Some of the activism is sabre rattling, as in the case of NGOs demanding that food and beverage firms such as PepsiCo take a stronger stand against deforestation. But leveraging the power of investors also appears to be making a difference.

Mighty Earth, for example, is one organization that has highlighted the role that financial institutions have in providing capital that make the expansion of palm oil plantations, and therefore deforestation, both possible in the first place. Greenpeace has also spoken out against the billions of dollars banks have loaned to companies that have been accused of accelerating deforestation in countries such as Indonesia. To that end, BNP Paribas, by most accounts the world’s seventh largest bank, has announced that responsible palm oil production is a precondition to secure financing in order to protect both forests and local communities that depend on them spiritually and financially.

Other companies are also hearing the message loud and clear, and replying in kind. Olam is one company that has attracted its share of scrutiny as it has expanded its operations to countries in Africa, including Gabon. The Singapore-based commodities giant recently announced that at least 100,000 landowners are now registered within a proprietary system accessible with a smartphone app. This platform collects and applies data that improves supply chain traceability while offering palm oil farmers advice and allows for them to collect payments via mobile telephones. “This gives the farmers, Olam and our customers greater insight to tackle issues from poor yields to climate change and child labor,” explained an Olam spokesperson in an email exchange with 3p, “and by geotagging each bag of produce we can trace it from farm to fork, providing assurance to end users on product provenance.”

Watch for environmental groups to keep the pressure on these companies, which can only benefit RSPO in the near future. The orangutan has been the enduring symbol of the global palm oil industry’s impact on the environment, with WWF and others saying this animal is close to extinction. Progress is being made, but there is still plenty of room - as in the 79 percent of palm oil that is not yet certified - for improvement. This endangered animal has proven to serve an effective emotional tool to push the industry to change its ways – and for its long-term viability, palm oil companies have no choice but to show consumers they can be trusted.

Image credit: Lian Pin Koh/Flickr