Sustainable palm oil

Breaking the link between the cultivation of palm oil & deforestation

Unilever is one of the world's largest buyers of palm oil. We purchase 1.5 million tonnes a year for use in products as diverse as margarine, ice cream, soap and shampoo.

Rising population, together with the growing affluence of India and China, is creating unprecedented demand for palm oil – a phenomenon exacerbated by the rush into biofuels.

Palm oil is one of the drivers of deforestation. Around three-quarters of the world's oil palm is grown in Indonesia and Malaysia where much of the recent expansion of the industry has been onto peatland and into tropical rainforest. The clearance and burning of South-East Asia's peat forests release 2 billion tonnes of greenhouse gases every year. According to some estimates, deforestation in Indonesia alone accounts for 4% of global greenhouse gas emissions – making it the third-highest emitter behind the US and China.

Unilever is convinced that we have to break this link between cultivation of oil palm and climate change. We want to create a market for palm oil that is sustainable and certified.

Working to promote sustainable palm oil production

We have been working to promote sustainability in palm oil cultivation for a long time. In the mid-1990s, as part of our Sustainable Agriculture Programme, we started developing Good Agricultural Practice Guidelines for oil palm. In 2004 we became a founding member of the Roundtable on Sustainable Palm Oil (RSPO) – a body which we currently chair. At the end of 2007 the RSPO launched a certification programme, making it possible for the first time to grow certified sustainable palm oil.

In May 2008, following a public challenge from Greenpeace, we formalised our commitment to draw all our palm oil from certified sustainable sources by 2015. We also agreed to support a moratorium on any further deforestation in South-East Asia.

To achieve these goals our approach has four parts.

• First, we have assembled a large international coalition of some 50 companies, banks and NGOs who share the same goals as us. The purpose of the coalition is to campaign for change among palm oil growers.

• Secondly, we are working within the institutional framework of the RSPO to effect this change. At the November 2008 meeting of the RSPO, we supported resolutions from WWF and Oxfam which put pressure on suppliers and users of palm oil to change their ways.

• Thirdly, we are conducting an independent audit of our own suppliers to ensure that all of them are respecting the principles and criteria of the RSPO.

• Finally, we are working closely and productively with Greenpeace and other NGOs to promote change within the industry.

Much remains to be done to turn our commitment into reality. The creation of a market for sustainably cultivated palm oil is complex and will take time since it involves a multiplicity of stakeholders – governments, NGOs, processors, manufacturers, large growers and smallholders.

We have made a start. In November 2008 a ship carrying the first supplies of RSPO-certified palm oil docked in Rotterdam, the Netherlands. Unilever bought a part of the consignment - the first step on a long road.

About palm oil cultivation

Palm oil is a vegetable oil extracted from the fruit of oil palm trees. In 2007 about 38 million tonnes of palm oil were produced globally but this figure grows by between 6% and 10% every year. The oil makes up more than a third of the world's vegetable oil market.

Oil palms grow in equatorial conditions in Asia, Latin America and Africa, but more than 75% of the world's supply comes from Malaysia and Indonesia in South East Asia. Since the 1990s the area of land used for palm oil cultivation has increased by about 43%. The ever-growing demand for the oil is due to several factors, but the main reasons are its use in biofuel production and the rising need from developing markets, particularly China and India.

So far, much of this growth has not been sustainable: plantations have been created or expanded by clearing rainforest. This is taking a huge toll on the local habitat and contributing to climate change. 'High Conservation Value' Forests, the way of life of indigenous peoples and the local wildlife, including the endangered orangutan, are at risk.

Deforestation leads to huge emissions of greenhouse gas, as the carbon sequestered in trees and root systems is lost to the atmosphere. According to some estimates, deforestation in Indonesia alone accounts for 4% of global greenhouse gas emissions. Globally, deforestation of all kinds contributes 20% of all greenhouse gas emissions and has therefore received considerable attention in international climate change negotiations.

Unilever's use of palm oil

We have a long history of using palm oil in our products. It is a versatile fat that is rich in solid saturated fatty acids and can withstand refining at high temperatures, allowing individual components to be isolated for use in specific product applications.

Our business buys about 1.5 million tonnes of palm oil and its derivatives each year. This currently accounts for about 4% of the world's supply. However, over the past five years the total amount of palm oil (and speciality ingredients containing it) bought by us has decreased.

Palm oil ingredients are used across our portfolio, mainly in spreads, but also in savoury products (soups, sauces and bouillons) and ice cream. The oil is used in soap bars, while derivatives are also key ingredients in laundry and personal care products.

Roundtable on Sustainable Palm Oil (RSPO)

Unilever was one of the founders of the global Roundtable on Sustainable Palm Oil (RSPO) – an industry-led initiative set up in co-operation with the conservation organisation WWF in 2003. The Roundtable works with plantation owners, manufacturers, retailers, banks and other NGO partners including Oxfam and Sawit Watch to devise standards for sustainable palm oil production. Unilever's Sustainable Agriculture Director, Jan Kees Vis, is president of the RSPO's executive board.

Following the agreement of RSPO Principles and Criteria in November 2005, a working group produced criteria for sustainable palm oil production which were tested by a group of Roundtable members during 2007. The RSPO developed national interpretations of the generic criteria in 2007 to allow for differences in national legislation in producing countries. Then, during the Fifth Roundtable Conference on Sustainable Palm Oil in November 2007, RSPO launched its certification framework. The first quantities of certified sustainable palm oil reached the market in November 2008. Unilever bought a part of this first consignment.

Greenpeace protest

In April 2008, Greenpeace protestors held peaceful demonstrations at Unilever premises in the UK, the Netherlands and Italy. Greenpeace issued two demands:

• Suppliers:

The first demand was for Unilever to stop trading with palm oil suppliers involved in rainforest destruction.

In response, we believe it is better to work with suppliers to persuade them and help them to stop using unsustainable agricultural methods. We successfully implemented this approach in the fishing industry and more recently in tea production, with the launch of products using tea from Rainforest Alliance Certified™ estates.

We have encouraged industry-wide discussion to address these issues and continue to contribute learnings about best practice from our own palm oil plantations in Ghana. We also helped to develop the Principles and Criteria for Sustainable Palm Oil Production launched by the Roundtable on Sustainable Palm Oil in 2005, and the certification programme that was officially launched in November 2007. We believe this provides a foundation on which to build.

• Moratorium:

Greenpeace wanted Unilever to support an immediate moratorium on the destruction of rainforest and peatland areas in Indonesia to grow palm oil.

Unilever agreed to do this. We believe that this can be done without curtailing the expansion of production because there is sufficient unforested land available to meet even the most optimistic estimate of demand, and because yields would improve significantly if everyone adopted the principles of sustainable agriculture.

Greenpeace and Unilever have decided to now work jointly to try to break the link between palm oil and deforestation. Together, we have set up a coalition of companies and organisations who will lobby for a moratorium on deforestation for palm oil. The aim of this is to allow national assessment of forest conservation values and carbon stock values, as well as issue legislation so that future expansion for oil palm can be directed away from 'High Conservation Value' and 'High Carbon Value' areas.

Updates on our progress

In announcing our commitment to certified sustainable palm oil, we promised to report on our progress. Our latest news update from September 2009, which states our support for a moratorium on deforestation for palm oil in Indonesia and including greenhouse gas (GHG) emissions associated with palm oil production in the RSPO Principles & Criteria, is available to download as a pdf (see related links). Two supporting documents are also available to download. Three news updates from 2008, including the delivery of our first shipment of certified sustainable palm oil in November 2008, are also available.