Sustainable Palm Oil Progress Report published

Today Unilever publishes its 2014 Sustainable Palm Oil Progress Report which charts the progress we are making towards our 2020 ambition of sourcing all our palm oil from traceable and certified sources.

Good progress but more to do

The report shows that, by the end of 2014, all of the palm oil directly sourced for our foods and refreshment business in Europe will be traceable to certified plantations and we can now demonstrate traceability to a consumer product. This achievement is all the more significant as we were told this was impossible five years ago.

We have also made good inroads towards traceable and certified palm oil for our Australian and Brazilian markets, both of which are small yet important advances.

Overall, we can now report that 58% of the palm oil in our supply chain is traceable to known mills. While this is good progress, we recognise that we need to do more to accelerate our efforts and reach 100% traceability.

Traceability is pre-requisite for change

To make progress on traceability, we started using the Known Sources reporting platform, asking our suppliers to trace the palm oil we buy back to identified palm oil mills. As a result, we now have visibility of approximately 1,800 crude palm oil mills, which we estimate to be around tw-thirds of the total number in the entire oil palm sector.

Knowing where our palm oil originates from is an important pre-requisite for understanding the changes we need to make to transform our supply chain.

As Dhaval Buch, Chief Procurement Officer, says: “The palm oil supply chain is very complex and at the same time, opaque. This journey to drive traceability and transformation is not an easy one. However, our progress has reinforced our determination to bring the rest of the palm oil industry on board to collectively commit to a more transparent and sustainably supply chain.”

Opportunities, challenges and lessons learned

The report provides a brief update on our actions to drive market transformation, our progress on creating transparent supply chains, and the opportunities and challenges we see ahead for Unilever as well as the wider business community.

It also highlights some of the lessons we have learned over the last year. The biggest challenge we see facing the industry is to increase the productivity of smallholders in the sector and ensure that the socio-economic benefits of growing palm are felt by smallholders and local communities.

We will continue working with our stakeholders including NGOs, suppliers and governments to address this and other challenges.

Jeff Seabright, Chief Sustainability Officer: “We believe that a profitable and sustainable palm oil sector must get the right balance between social, environmental and economic objectives. This is a shared responsibility between governments, the private sector and civil society.

“That is why Unilever is working with industry leaders and NGOs to move towards a collaborative solution to halt deforestation, protect peat land, and drive positive economic and social impact for people and local communities.”

Market transformation

Unilever is one of the world’s major buyers of palm oil for use in products such as margarine, ice cream, soap and shampoo. We purchase around 1.5 million tonnes of palm oil and its derivatives annually, which represents about 2.6% of the world’s total production.

We are committed to driving market transformation towards a more sustainable palm oil sector and were a founder member of the RSPO. We co-chair the Consumer Goods Forum Steering Group on Sustainability and led the process which resulted in the creation of the Tropical Forest Alliance 2020, a multi-stakeholder collaboration involving governments with the goal of eliminating deforestation.

Next report

The next sustainable palm oil progress report will be published in April 2015. It will coincide with the anniversary of the Unilever Sustainable Living Plan, and will provide our full 2014 traceability achievements against our targets.

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