For us this means physically certified palm oil through both mass balance and segregated sources. Since then, we have been working hard to make it a reality – not only in our own supply chain but across the entire industry.
As a significant user of palm oil, Unilever takes the principles of zero net deforestation very seriously and has a global timeline to cut natural forest loss in half by 2020, and strive to end it by 2030. The only way we will achieve our own goal is by helping change the entire market.
And in the long term, the only way consumers will continue to use products with palm oil as an efficient ingredient is if it is sustainably sourced. This is why we use our influence, financial resources and energy to play a leading role in transforming the entire industry.
Staying committed to traceability
This has been no easy journey. There are a number of staging posts towards the highest level of sustainability and we have elements of these in our current supply. So what is the current situation on palm oil in the Unilever supply chain?
As of November 2015:
- Unilever is the largest user of physically certified palm oil in the Consumer Goods Industry; this includes segregated and mass balance volumes (310,421 tonnes).
- 20% of our palm oil already comes from physically certified sources (up from 9% in 2014).
- We are implementing a robust traceability and risk verification system on the ground with the Global Forest Watch tool in partnership with the World Resources Institute, as well as our other partners Proforest and Daemeter. Transparency remains a priority.
- Already 72% of our volume (2,064 mills) can be traced back at least to the mill in the country of origin. This is estimated to be around three-quarters of the entire sector.
- 50% of these mills have been risk assessed and the mill data cleaned and validated. We are working to complete this for the remaining mills.
- Importantly, 100% of the palm oil for our new Sei Mangkei factory is traceable to mills and potentially links to 25,000 independent smallholders in the surrounding area
While our goal remains 100% traceable and physically certified palm oil by 2020, we can confirm that all non-smallholder sources of palm oil in our supply chain will comply with our Principles by the end of 2017.
Read more about our work with palm oil smallholder farmers (PDF | 720KB)
Using our influence to drive system change
Our scale is an opportunity for us to influence the rest of the industry. That is why we actively encourage other consumer goods companies on their no net deforestation commitments through collaborations such as the Consumer Goods Forum, Tropical Forest Alliance, RSPO, New York Declaration on Forests, Banking Environment Initiative and the World Business Council for Sustainable Development. This commitment helped raise the bar for many others who followed. These companies have been recognised in the recent Global Canopy Forests 500 ranking.
As a result of these efforts, over 90% of globally traded palm oil is now covered by sustainability commitments. We are making progress, but as an industry we need to do more, starting with turning these pledges into action. It is only actions taken on the ground and at scale that will transform markets to eliminate deforestation and enroll and protect smallholders.
Wider system changes we are working to deliver:
- We are currently in a consultation process with leading conservation and social experts, NGOs and suppliers to refresh our 2013 Palm Oil Sourcing Policy.
- Unilever is actively advocating for the convergence of the two methodologies on High Carbon Stock (HCS) to provide clear and ambitious standards for growers, traders and buyers.
- We are defining a smallholder farmer strategy and methodologies for implementation.
- Unilever will continue to look for wider industry engagement to support best management practices for existing smallholder plantations and find ways to control the outbreak of forest fires during the annual dry season in Indonesia.