Improving the visibility of our supply chain

Gaining greater visibility of our supply chain is crucial: it helps us identify issues on the ground and remediate them effectively, often in partnership with our suppliers, NGOs and government stakeholders.

We're working towards greater visibility in two main ways: by mapping the suppliers, third-party suppliers and mills in our extended supply chain to really understand where our palm oil comes from; and through our grievance mechanism, which enables others to raise issues with us, and which is described in Engaging our palm oil suppliers. Our work on identifying smallholders in our supply chain is described in The importance of smallholders.

In 2010 consumer goods companies committed to achieve zero net deforestation by 2020. Although we have seen some success, we are not where we need to be and are now at a tipping point.

The journey we have travelled in recent years on forests, food and land use has taught us some major lessons. Progress depends on full and deep transparency. To make wise, sustainable choices, as well as to hold companies to account, consumers need full visibility into where the food and products they purchase come from and how they were made. They need nothing less than radical transparency all the way up and down supply chains.

A new theory of change is emerging – total transparency. Technologies such as the Global Forest Watch Tool, Trase, Blockchain and the Accountability Framework, make more radical transparency possible.

Lack of transparency has been one of the major impediments to meeting corporate sustainability pledges. Several Consumer Goods Forum member companies have made good headway by disclosing their palm oil mill origins − but this is a first step on a challenging journey.

Our aim is to achieve full traceability for all the palm oil we buy – but there are challenges. In the palm oil supply chain, palm oil may be traded repeatedly before we buy it – and not all suppliers currently have the capability to trace back to the source. So we have various initiatives in place to achieve full traceability.

These range from industry-leading mapping and data programmes, to projects such as our €130 million investment in our own palm oil refinery in the Sei Mangkei Special Economic Zone of North Sumatra, which aims to increase traceability by bringing more smallholders into our supply chain.

We believe that alongside gaining a better understanding of our palm oil supply through mapping, we’ll make greater progress towards transformation by sharing the information we have. In February 2018, we became the first consumer goods company to publicly disclose the suppliers and mills we source from, both directly and indirectly, and published our palm oil supplier list (PDF | 191KB) on our website.

We’ve also shared the names and locations of around 1,600 mills and 100 refineries (sourcing from many mills) from around the world from which our suppliers source palm oil. These form our ‘mill universe’ of our direct and extended supply chain, shown in the map below.

Mill locations are an important indicator of where palm fruit is processed and therefore tell us more about where oil palm plantations are located. See our full mill (PDF | 299KB) and refinery list (PDF | 124KB).