Leading market transformation in palm oil
We are playing a leading role in the transformation of the palm oil industry.
A vision for transformation
To transform the market we must do more than work with our suppliers to source sustainably. Our vision is that by 2019 we will achieve a transformation of the palm oil sector to 100% sustainable palm oil. The Roundtable on Sustainable Palm Oil (RSPO) has a crucial role in this process.
A founding member of RSPO
In 2004, we became a founding member of RSPO, the not-for-profit, industry-led initiative set up in co-operation with conservation organisation WWF. This brings together stakeholders from different sectors of the palm oil industry, including palm oil producers, processors and traders, consumer goods manufacturers, retailers, banks, investors, and environmental and social NGOs. Our aim is to develop and implement global standards for sustainable palm oil.
RSPO has over 3,000 members, representing over 40% of all palm oil produced worldwide. It works to increase the amount of certified, sustainable palm oil that is available, and has set sustainability criteria against which suppliers can be certified.
In August 2015, RSPO announced an additional voluntary addendum to its existing Principles & Criteria called RSPO Next. This proposes stronger commitments on no deforestation, no new development and responsible new developments.
A fund to stop tropical deforestation
At the World Economic Forum in Davos in January 2017, it was announced that a new fund had been set up for investments in deforestation-free agriculture. Led by the Government of Norway, in partnership with the Sustainable Trade Initiative (IDH), environmental NGOs and consumer goods companies, the fund aims to protect 5 million hectares of forests and peatlands by 2020.
Unilever announced that we will contribute $25 million to a $400 million fund to eliminate tropical deforestation. This public-private partnership reflects a shared commitment towards driving investment towards enhancing livelihoods and improved productivity of smallholder farmers.
Leading transformation through the Consumer Goods Forum
The Consumer Goods Forum (CGF) is a global industry network that brings together CEOs and senior management from over 400 retailers, manufacturers, service providers and other stakeholders across 70 countries. Forum member companies have combined sales of €3.5 trillion.
We co-chair CGF’s sustainability steering committee. In 2010, together with other members, we committed to mobilise resources within our business to help achieve zero net deforestation associated with four commodities by 2020: palm oil, soy, paper and board, and beef. We have since extended our commitment to our tea businesses and supply chains.
These commitments have sent a strong signal to the market about future demand for sustainably sourced agricultural commodities. As a result, there has been significant movement from growers and traders. Major producer companies and traders have all committed to no deforestation policies, which now cover over 90% of globally traded palm oil. The financial sector has also responded by pledging to support sustainable commodity production, through the Banking Environment Initiative.
Tackling deforestation with the Tropical Forest Alliance
Corporate commitments tell only one part of the story. Just as important are the roles of government and civil society. We need to align business action with public policy, through partnership and collaboration.
One such example is the Tropical Forest Alliance 2020 (TFA), which Unilever was instrumental in creating. TFA is a public–private partnership between CGF, the governments of the US, UK, Netherlands, Norway, Indonesia and Liberia, and dozens of NGOs. The goal of TFA is to eliminate deforestation from the supply chains of consumer goods companies. TFA’s initial focus is on palm oil, soy, paper and pulp and beef products, in South East Asia, Latin America and Africa.
Making global progress on forests and climate
The COP21 Paris agreement sent a strong message to the international community about the importance of forests. All countries agreed on simple but strong language that operationalises forest protection.
In December 2015 in Paris, Unilever and Marks & Spencer signalled an intent to preferentially source from jurisdictions that have adequate no deforestation policies in place, otherwise known as Produce and Protect.
Increasingly ambitious private sector and government commitments to tackle deforestation culminated in the New York Declaration on Forests. This was launched at the UN Climate Summit in 2014. For the first time, world leaders endorsed a global timeline to halve natural forest loss by 2020, end it by 2030, and to restore 350 million hectares of degraded land - an area larger than India. Unilever helped to develop the Declaration and led the outreach to the rest of the private sector.
High Carbon Stock
In November 2016, The High Carbon Stock Approach (HCSA) and the High Carbon Stock Study (HCS+) convened in Bangkok during the RSPO Annual Roundtable Conference on Sustainable Palm Oil (RT14), reaching an agreement on a single set of principles for implementation of companies’ commitments to ‘no deforestation’ in their palm oil operations and supply chains. We have been involved in this discussion from the beginning as we are committed to supporting the convergence of a globally agreed standard that is both meaningful and practical.
Dhaval Buch, our Chief Procurement Officer, emphasises the importance of an agreed set of principles in enabling companies to put their no deforestation policies into action.
“Unilever supports the foundation work laid out in the High Carbon Stock (HCS) convergence agreement. We encourage all growers and users of palm oil to adopt this methodology and move to implementation.
Unilever recognises the next big challenges will be to ensure the application of High Carbon Stock in high forest landscapes and with smallholders, and to support the industry to move swiftly to find a pathway forward for these issues.”
The agreement outlines the converged methodology for protecting High Carbon Stock forests, High Conservation Value (HCV) areas and peatlands, and the approach to ‘young regenerating forest’ in fragmented landscapes; Free, Prior and Informed Consent (FPIC) implementation; integration of HCS within the HCV Network; and a roadmap for collaborative resolution of outstanding issues.
The agreement was a culmination of a productive and significant year-long conversation between grower companies, NGOs, and Unilever that began in late 2015.
We welcome external scrutiny of our sustainable palm oil commitments and our progress in meeting them. For example, in June 2016, The Rainforest Action Network (RAN) published their Snack Food 20 Scorecard ranking 20 consumer goods companies. Unilever was listed as a front runner, with RAN acknowledging our requirement for suppliers to go beyond RSPO’s commitments, our traceability to known and certified sources by 2019, and third-party verification of supplier compliance.
Also in 2016, Greenpeace released its Palm Oil Scorecard assessing the progress global consumer brands are making on their no deforestation commitments. Unilever was ranked as ‘Decent’, which we acknowledge means there is still more work to be done towards industry transformation.
In September 2016, WWF published the 2016 Palm Oil Buyers Scorecard in which Unilever scored 9 out of 9, which is a great achievement. WWF mentioned Unilever as being a leader, but also challenged us to increase our uptake of physical certified sustainable palm oil, which we are actively working towards with our commitment to 100% by 2019.
Unilever was also named as an industry leader in the Dow Jones Sustainability Index for the Household and Personal products Industry Group in September 2016. We achieved an overall score of 92 out of a possible 100.
In November 2016, Unilever was also awarded leadership and A performance grades on all four assessed commodities of the Carbon Disclosure Project (CDP) Forests report – palm oil, timber, cattle products and soy – out of a total 187 companies that disclosed their progress.