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photo shows palm oil harvest

Making commitments count for palm oil supply chains

by Ellen Griffiths

Global Canopy’s Forest 500 annual report for 2018 has found that companies are more likely to have a commitment for palm oil than for any other commodity. But only 19 companies achieved the top score of 5/5 for their palm oil commitments, which means many of the companies with the greatest power to drive change are not doing enough.

Forest 500 ranks the forest-risk commodity policies of the most influential companies and financial institutions acting in the global palm oil, soy, cattle and timber supply chains. Each is given a % score on their commitments and actions towards ending forest loss and this is simplified to a 0-5 ranking.

Whole sector still needs to do more

In total 196 companies are assessed for palm oil, with these commitments consistently stronger, and scoring higher than for other commodities.

But while the leading companies score well on their palm oil commitments – 93% for Nestlé and 89% for Unilever for example – the average for all of the 196 palm oil companies assessed is just 34%.

More than a quarter of all the companies ranked for palm oil scored 0% (51 companies). These companies, a significant part of the palm sector are yet to publicly recognise deforestation risks in their supply chains, let alone do anything to address these risks.

ZSL SPOTT’s palm oil technical advisor Michael Guindon said the 2018 results showed the need for greater urgency in company action:

“While the Forest 500 results show that palm oil companies are leading the way, there is much left to be done before deforestation- and exploitation-free palm oil becomes the norm. Companies across the supply chain must work together to increase the demand and production of sustainable palm oil.”

Table shows top 10 scoring companies with palm oil commitments
Palm oil leaderboard - from the Forest 500 2018 annual assessment

What makes a strong commitment?

Forest 500 assesses the clarity and robustness of each company’s commitment, its scope and ambition, and the company’s approach to transparency. Companies must be transparent about their commitments – and about how these commitments are implemented, to allow others to assess their activities.

Companies should be making zero deforestation commitments, and these should include explicit commitments not to produce or buy commodities grown on cleared High Carbon Stock (HCS) forests and /or peatlands. Forty two percent of Forest 500 companies involved in palm oil supply chains have committed to protecting these areas, with 88% mentioning both types of landscape. This is important for carbon sequestration, as well as for preserving biodiversity.

Almost all of the palm oil companies assessed by Forest 500 that have a forest-related commitment for palm oil use Roundtable on Sustainable Palm Oil (RSPO) certification to meet that commitment (89%). Importantly RSPO new standards (Principles and Criteria) agreed last year prohibit sourcing from HCS forest from November 2018. Previously the RSPO standard focused on protecting High Conservation Value forests. This now means that certification and credits from that date can show that a company’s palm oil is deforestation-free.

Companies must report on progress towards implementation

While having a commitment is an important step on the pathway to zero deforestation, commitments must also be implemented. For the first time, the 2018 Forest 500 assessment scores companies on how they report on implementing their commitments.

In 2018 we found that just 16% of the companies with a commitment not to source palm oil from land that had been cleared of High Carbon Stock Forests reported on how well they were meeting that commitment. Forest 500’s top scorer Nestlé has a commitment to protect HCS land and peatlands, for example, but does not report against this, dropping points as a result.

Companies need to develop time-bound implementation plans that lay out a detailed roadmap of the steps in executing their deforestation commitments and provide a clear framework for reporting on progress. 

Where a commitment will not be fully met by the 2020 deadline, companies should report on the progress they have made towards implementation.

More action needed

It is clear that while companies are doing more to address deforestation in their palm oil supply chains than elsewhere, much still remains to be done, and the clock is ticking.

As SPOTT’s Michael Guindon urged: “Increased urgency is needed to implement commitments on-the-ground if we are going to meet the approaching 2020 deadline for many corporate commitments.”

Companies without commitments must learn lessons from the leaders in the sector, while leading companies must ensure their commitments are being implemented to ensure that further deforestation does not occur on the ground.

 

Photo: Palm oil fruit, image by tristantan via Pixabay