Transforming the palm oil industry
Our ambition is to make sustainable palm oil commonplace - which means working with partners and through our own supply chain to drive sustainable change.
Why we're driving change
Palm oil is an important raw material for many of our brands – and securing a supply of sustainable palm oil is vital to the future success of our business.
Our Sustainable Palm Oil Policy sets out our commitment to 100% traceability for all the crude palm oil and derivatives that we buy and our target of achieving, by the end of 2019, 100% physically certified palm oil and its derivatives for our core volumes. But tackling the complex social and environmental issues in the palm oil supply chain requires more than policy commitments – it requires the transformation of an industry.
Through partnerships, advocacy, and committed work on the ground, we're helping to lead real progress towards our vision of a supply chain in which sustainable palm oil is commonplace. In this section, we describe our work in the following areas:
Everything you need to know about palm oil
Palm oil . . . Most people have never seen it. Some people may never have heard of it. But there’s a good chance that almost everyone has used it.
What exactly is palm oil?
Palm oil is a vegetable oil, which comes from the fruit of oil palm trees.
There are two types of oil that can be extracted from palm fruit: palm oil, which comes from the pulp of the fruit; and palm kernel oil, which comes from the seed, or kernel, of the fruit. The process involves crushing the fruit and removing the liquid oil inside. Both types of oil are edible with palm kernel oil more solid at room temperature. This makes it ideal for cooking as well as a key ingredient in many products, such as shampoos, ice cream and chocolate.
Where does palm oil originate?
Of all palm oil comes from Indonesia and Malaysia
The vast majority of today’s commercial palm oil derives from a specific type of palm called the African oil palm – or ‘Elais guineensis’, to give it its scientific name. As the name suggests, it originates from the rainforests of West Africa.
Oil palms only grow in the tropics, the narrow band around the Equator. Today, over 85% of all palm oil comes from Indonesia and Malaysia. In recent years, palm oil production has also begun to expand into the tropical regions of Latin America and back to where it originates, West Africa.
Palm oil is big business nowadays, right?
Palm oil has grown into a major global industry over recent decades. Farmers today produce over 70 million tonnes1 of palm oil annually – that’s more than double what they were producing just 20 years ago.2 Estimates indicate that palm oil plantations now cover more than 27 million hectares3 - an area bigger than the size of New Zealand.4
Palm oil plantations cover
- 27 million hectares
- - an area bigger than New Zealand
So why is palm oil in such high demand these days?
Palm oil is a highly versatile crop. Not only is it a popular cooking oil, but it is also an ingredient found in many foods and beauty products, such as ice cream, chocolate, shampoo and make-up. Of course, as the world’s population grows, so does the demand for the crop. In recent years, it is used as a biofuel too.
What do we use palm oil for?
Palm oil is used across a variety of our products. We buy around 785,000 tonnes of crude palm oil and around 450,000 tonnes of palm kernel oil and other derivatives every year. This makes us one of the largest end-users of palm oil in the fast-moving consumer goods (FMCG) sector. Which gives us an opportunity to create change.
One of the great attributes of palm oil is that it helps lock in flavours and creates a smooth and creamy texture. This makes it perfect for food products like mayonnaises and salad dressings and for chocolate and ice cream too.
It also works as a stabilising agent, helping to bind products together, which makes it ideal for shampoos, moisturising lotions, soaps, body oils and many other personal care products. It also serves a similar function in household cleaners and a host of other home care products.
Is palm oil bad for people's health?
When consumed in moderation as part of a balanced diet, palm oil is not bad for your health. People have been consuming palm oil for thousands of years. It is used as a home cooking ingredient in many countries around the world, particularly in West Africa, South East Asia and Brazil and is also included in a range of food products.
Like all fats and oils, palm oil is a concentrated source of energy for our body. A small amount of fat is a key part of a healthy, balanced diet. Fat is a source of essential fatty acids, which the body can't make itself. The World Health Organization recommends that in a healthy diet between 15 and 35% of daily calories should come from fat.
Most fats and oils contain both saturated and unsaturated fats in different proportions. However, too much fat in our diets, especially trans fats and saturated fats, can raise cholesterol, which increases the risk of heart disease. Palm oil is virtually trans fat free and although the proportion of saturated fats is lower than the saturated fat content of similar fats such as coconut oil, butter and cocoa butter, palm oil is still relatively high in saturated fat.
Palm oil is often used in products because it provides the ‘hard or solid’ fat that is needed for pastries, cookies, crackers and other items that require long shelf stability and a particular mouth feel or texture. These properties can also be provided by dairy fats, but these are high in both trans fats and saturated fats. Another alternative to palm oil is partially hydrogenated oils, but these fats are high in trans fats and for this reason we do not use them in our products.
Is palm oil production causing deforestation and harming local wildlife?
We have committed to sourcing 100% of our palm oil sustainably by 2019
Palm oil only grows in the tropics, which is where there are tropical rainforests home to a host of flora and fauna. The rising demand for palm oil and other agricultural commodities has led to forest loss in these areas.
A balance clearly needs to be struck between the rising demand for the crop and the economic benefit this brings to millions of people working in the industry, and protecting the world’s forests and the wildlife that lives there. That is why we are at the forefront of driving sustainable production and have committed to sourcing 100% of our palm oil sustainably by 2019 as well as eliminating deforestation from our supply chain.
A report from the IUCN (June 2018), suggests that banning palm oil would most likely increase the production of other oil crops to meet demand for oil, displacing rather than halting the significant global biodiversity losses caused by palm oil.
What is Unilever doing to address the environmental and social problems of palm oil?
For more than 15 years now, we have been at the forefront of driving industry-wide change. We do this in two ways. First, by focusing on our own operations and supply chain, and second by working to transform the wider industry.
In our own operations, we work closely with our suppliers. All of our suppliers need to adhere to our Sustainable Palm Oil Sourcing Policy (PDF | 167KB), which was updated in 2016 with stronger commitments to human rights and inclusion of smallholder farmers amongst other requirements.
We are also working to increase traceability and transparency in this complex supply chain to enable clearer visibility of issues and how we can work with our suppliers and partners to resolve them. Find out more about how we are doing this here and how we address any concerns in our supply chain here.
To help transform the wider industry, in 2004, we helped pioneer the Roundtable on Sustainable Palm Oil (RSPO), the only globally recognised certification standard, to help drive sustainable production. We did this because we realised that no single business can turn the industry around. All those with a stake in the industry need to be involved. So, the RSPO represents both growers and buyers, as well as mill operators, commodity traders, non-profit environmental and social groups, and other influential organisations.
We also work to drive the Tropical Forest Alliance, a global public-private partnership in which partners take voluntary actions, individually and in combination, to reduce the tropical deforestation associated with sourcing palm oil, soy, beef, and paper and pulp. TFA is in a unique position to foster cross-sector collaboration based on a common understanding of the barriers and opportunities linked to deforestation-free supply chains.
Roundtable on Sustainable Palm Oil
We helped pioneer the RSPO in
- because we realised that no single business can turn the industry around.
Is certification of palm oil producers the best solution?
Certification is one of the ways to help to transform how palm oil is produced and traded and the role of the RSPO has played a key role in this. However, we know that certification alone does not guarantee solutions to all the social and environmental issues facing the sector.
The sheer complexity of the global palm oil industry means a single approach is not suitable. Therefore, we have a number of different programmes in place with our partners as we strongly believe that is the most effective way to promote widespread change in the industry.
Why aren't you using an alternative to palm oil?
People in Indonesia and Malaysia rely on the palm oil industry for their livelihood
As well as the unique properties of palm oil, which make it well-suited for many of our products, palm oil is also in fact the most land-efficient vegetable oil available. Oil palms produce more oil per hectare of land than any other oil-producing crop. For example, to get the same amount of oil from soybeans, you would need seven times more farmland. That means more agricultural land devoted to non-food crops, as well as more forests coming under threat. In addition, the production of oil palm requires less energy, as well as fewer fertilisers and pesticides.
It’s important to also not forget the economic benefit the industry has had on the millions of smallholder farmers and economies of producing countries. For example, in Indonesia and Malaysia, 4.5 million people rely on the palm oil industry for their livelihood.
Realistically, will the palm oil industry ever become 100% sustainable?
We fully believe it can, and we are doing everything in our power to make it happen. Over the years, however, we have learned two important lessons about sustainability. First, there is no quick-fix. The necessary solutions are multiple and often take time to implement. Second, no single organisation can deliver sustainability alone. Even though Unilever is one of the world’s biggest buyers of palm oil, we form just a small part of a vast and complex global industry.
A 100% sustainable palm oil industry, which meets growing global demand while simultaneously protecting the planet and people’s livelihoods and human rights, can only ever come about through cooperation and collective action. That means everyone involved in the palm oil sector – buyers, traders, suppliers, farmers, consumers and governments – working together. This is already happening, but lots more needs to be done and it needs to happen faster.