Blogs: Supply Chain

In June, the Roundtable on Sustainable Palm Oil (RSPO) held their annual European conference in Milan. Members gathered to discuss improvements in the RSPO Principles and Criteria and reported on national efforts to increase demand for certified oil.

But instead of just another routine annual conference, at this RSPO EU Roundtable 2016, I was actually quite excited to detect a growing trend where palm oil end users and buyers want to do more to contribute to the development of sustainable palm oil. For many years, it’s been big companies like Unilever and Nestle which have been involved in the debate about sustainable palm oil. But now we are beginning to see growing interest and willingness on the part of smaller companies to get involved as well. This interest is spreading across a host of industries so that it’s not only FCMG and biodiesel sectors, but industries such as perfume producers who are looking to join the debate.

Since the founding of the RSPO in 2005, palm oil end users have used supply chain certification to meet their commitments to sustainable sourcing. But more than a decade later, the limitations of certification have become clear. NGOs are arguing that the impact on the ground is limited with deforestation and social conflict continuing in palm oil producing countries and with many producers opting not to join RSPO.

These supply chain challenges have left end user companies exposed. Many have already expanded their sustainability commitments beyond certification and supply chain traceability to the mill and even to the plantation have become the new norm. To address supply chain risks, we are increasingly seeing progressive end users put up funds, individually or collectively, to invest in sustainability projects. They are partnering with NGOs but also increasingly with producers such as GAR.

Here are a few examples. The Natural Resources Steward Circle (NRSC) is comprised of renowned perfume and beauty products companies. Its members are mapping their supply chain information to identify common suppliers. The French Alliance for Sustainable Palm Oil boasts big food companies as members and is actively engaged with NGOs and the French government to define sustainability in the palm oil industry.

For too long, the onus has been on palm oil growers to shoulder most of the burden of achieving sustainable palm oil. But as corporate entities, we face real limits, be it in terms of resources or sphere of influence and we need more concerted collaboration across the entire palm oil value chain. Even as we reach out to our own palm oil suppliers, we need similar support from our buyers and users. Tackling the multi-layered and complex challenges of sustainable palm oil can only succeed when everyone from farmers to producer companies to end consumers are truly on board and are willing to commit resources to bring about change.

Greater collaboration across the supply chain is needed to help achieve sustainable palm oil.

Greater collaboration across the supply chain is needed to help achieve sustainable palm oil

End user collaboration will be particularly useful in helping small and medium-sized mills and independent farmers adopt more sustainable practices. Those with operations in markets like China and India can also help promote collective action to foster the demand for sustainably produced palm oil.

For GAR, this new trend of end user involvement is most welcome. Since the end of last year, we have observed a jump in the number of customers approaching us with an interest to jointly implement sustainability projects. They are willing to invest in and, more importantly, to learn from such projects to demonstrate their commitment to sustainability. These kinds of investments will in turn help us at GAR extend our capacity to influence and effect change on the ground. Looking ahead, I hope that more end users will join us in the conversation about these efforts at the next RSPO Roundtable in Bangkok this November.