Transforming the palm oil industry
We are making good progress against our ambitious targets for sustainable palm oil.
In 2009, we were among the first companies to commit publicly to a long-term goal to source 100% of our palm oil sustainably. We built this into the Unilever Sustainable Living Plan, launched in 2010, as part of our commitment to sourcing our agricultural raw materials sustainably. See Targets & Performance.
In 2016, we conducted a review of our palm oil sourcing and, as a result, have decided to be more ambitious in our definition of sustainable palm oil.
As set out in our Sustainable Palm Oil Sourcing Policy (PDF | 167KB), updated in 2016, we define sustainable sourcing as physically certified palm oil through mass balance, segregated, or equivalent sources. We have also brought forward our commitment to source physically certified palm oil to 2019 and included a commitment to support smallholder inclusion
The pathway to 100% sustainably sourced palm oil
|2015 actuals||2016 actuals||2017||2018||2019|
|Total Physical Certified (RSPO Mass Balance, Segregated or equivalent)||19%||36%||50%||80%||100%|
We phased out GreenPalm certificates and will be repurposing the money spent on certificates into a palm transformation fund. This is in support of our announcement at the COP21 climate negotiations that we are looking to create place-based partnerships in Southeast Asia and West Africa.
Why sustainable palm oil matters
Palm oil is a versatile raw material and the most high-yielding, land-use efficient vegetable oil. It is the source of livelihood for millions of famers and communities in tropical landscapes, and growing in importance. It is also a staple food commodity for billions of people around the world.
We use palm oil in products such as our margarine, ice cream, soap and shampoo.
Unilever uses about 1 million tonnes of crude palm oil and its derivatives and about 0.5 million tonnes of crude palm kernel oil and its derivatives. Through this unique use pattern, we impact approximately 5 million tonnes or 8% of global palm oil production.
While palm oil has many positive attributes, there is a strong link between the way in which it is grown and deforestation. The practice of clearing forests to make room for palm oil is a major contributor to climate change, and a significant portion of global emissions is caused by land use change. Unilever takes the principle of no deforestation very seriously. By sourcing sustainably, we aim to reduce the impact of palm oil cultivation on forests, and drive positive economic and social impacts for smallholder farmers, indigenous people and forest communities in order to have a positive long-term impact and to transform the industry.
In early 2016, we re-launched our Sustainable Palm Oil Sourcing Policy (PDF | 167KB) with stronger commitments to human rights, adherence to national laws, smallholder inclusion and traceability implementation. This was in response to shifts within the palm oil industry, increased NGO expectations, growing consumer pressures, international industry dynamics and internal conversations. We require our suppliers and their third-party suppliers to comply with the principles of our Policy.
The suppliers in our supply chain, who we work with closely, are essential to our success in transforming the palm oil industry. See Working across the palm oil supply chain.
An important area of focus is increasing the productivity of smallholder farmers and facilitating their inclusion into our supply chain in a particular jurisdiction, or political geography.
One example of our approach to smallholders is in Indonesia, where we are working with the provincial government of Central Kalimantan and other regional stakeholders to support a ‘village by village’ approach to sustainable palm oil.
Unilever’s partnership with Yayasan Inovasi Bumi (Inobu), the provincial government of Central Kalimantan, and the district government of Kotawaringin Barat, will initially impact around 600 independent smallholder farmers on around 1,400 hectares of land, and is the first public-private partnership agreement among subnational governments and an international buyer on sustainable palm oil. Our engagement with smallholders will go beyond Central Kalimantan to include projects in Riau and North Sumatra.
Building on our record of leadership
Our commitment to sustainable palm oil builds on a strong track record. In the mid-1990s as part of our Sustainable Agriculture Programme, we started developing Good Agricultural Practice Guidelines for palm oil.
In 2004, we were founding members of the Roundtable on Sustainable Palm Oil (RSPO), and building on RSPO’s Principles & Criteria as a foundation, we launched our first Sustainable Palm Oil Sourcing Policy in 2013, which we refreshed in 2016.
As of January 2017, we were able to report that:
- Unilever is one of the largest end users of physically certified palm oil in the consumer goods industry
- Around 36% of our palm oil came from physically certified sources (RSPO mass balance and segregated) in 2016
- We can trace the universe of mills associated with 73% of our core volumes. Our universe of mills consists of approximately 1,300 mills identifiable to country of origin
- Together with the Norwegian government and the Dutch Sustainable Trade Initiative, IDH, we launched a new palm fund at the World Economic Forum in Davos to accelerate sustainable palm oil production in Indonesia and West Africa
- We phased out the purchase of GreenPalm Certificates (with the exception of smallholder certificates) and will repurpose those funds to invest in more targeted approaches to sector transformation and investments needed to accelerate the availability of physically certified palm oil
- We have programmes in place to directly support more than 1,000 smallholders in our supply chain and are looking to scale this up in 2017 and beyond in collaboration with NGOs and our suppliers.