Our approach to sustainable palm oil
We're making progress towards a sustainable palm oil supply chain through a clear strategy and implementation plan.
A policy aimed at transformational change
Our Sustainable Palm Oil Sourcing Policy (PDF | 167KB) drives our efforts to transform the palm oil industry. When we refreshed it in 2016, we brought forward our target of 100% physically certified palm oil and its derivatives for our core volumes from 2020 to 2019.
At the heart of our Policy is our commitment to the principles of 'No deforestation, No development on peat, No exploitation of people and communities'. Often referred to as 'NDPE', this is the focus of multi-sector efforts to transform the palm oil industry.
We aim to build a supply chain that delivers more efficient land use and forest protection, while increasing our positive social impact, with a focus on the inclusion of smallholders and women to support improvements in their productivity and incomes. This commitment is embodied in the Five Principles for Sustainable Palm Oil that we require all our suppliers to meet.
Our Five Principles for Sustainable Palm Oil
- No deforestation.
- No development on peat.
- No exploitation of people or communities.
- Driving positive social and economic impact for smallholders and women while protecting forests.
These Five Principles are set out in full in our Sustainable Palm Oil Sourcing Policy (PDF | 167KB).
A framework for ensuring NDPE
We support the principles of NDPE through our framework of policies, which cover both environmental and social objectives.
Our Sustainable Palm Oil Sourcing Policy (PDF | 407KB) and Responsible Sourcing Policy (PDF | 9MB) include criteria which aim to address prevailing and systemic human rights issues in the palm oil supply chain. This includes respect for land rights, which are critical for people's food security and for inclusive social and economic development.
One of the Fundamental Principles of our Responsible Sourcing Policy (RSP) is that the land rights of communities, including indigenous peoples, will be protected and promoted. Due diligence relating to established rights to property and land is a mandatory requirement of our RSP. We’ve also identified land rights as one of our salient issues in our Human Rights Report 2017 (PDF | 10MB) and we recognise that the rights of women to land ownership and access to land play an important part in closing the global gender gap.
Free, prior & informed consent
We are committed to the principle of free, prior and informed consent (FPIC). This principle forms part of the UN Declaration on the Rights of Indigenous Peoples and the UN Voluntary Guidelines for the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security. We support the implementation of these guidelines by national authorities.
To achieve our ambition of driving sustainable market transformation, we work beyond our own supply chain – through collaboration with key suppliers, governments, NGOs and the broader industry. For details of this wider work, see Partnerships for transformational change.
Our policy in action
Addressing the social and environmental issues associated with palm oil requires more than commitments. We are delivering on our strategy with an implementation plan that is driving our progress in several key areas. We are working towards our end 2019 target; engaging our direct suppliers; improving traceability and transparency to manage risk; and bringing more smallholder farmers into our supply chain.
Our time-bound plan to 100% physically certified palm oil by 2019
We've set out milestones towards our goal of sourcing 100% physically certified palm oil and its derivatives for our core volumes by the end of 2019. Our 2019 ambition targets palm oil specifically and does not include palm kernel oil (PKO). As the next stage of our ambitions, we’re developing a separate roadmap to achieve sustainability for palm kernel oil.
The chart below shows our actual performance versus our commitment as well as the actual tonnage of physically certified sustainable palm oil that we have purchased each year. We sold our spreads business in mid-2018, which meant that the tonnage we purchased dropped in 2018 as our spreads business used a large amount of sustainable palm oil. Physically certified palm oil is sustainable palm oil certified through either the RSPO Mass Balance or Segregated certification standards or an equivalent standard that is independently verified by a third party.
Each year, we publish our progress towards achieving our sustainable palm oil sourcing targets. In 2018, we reached 67% for our core volumes of palm oil and palm kernel oil, up from 56% in 2017.
Looking at our 2019 target for palm oil only, we reached 81% of that ambition and are on track to deliver it.
Tackling palm kernel oil (PKO)
While we have had a clear path and roadmap in place to achieve 100% sustainable palm oil for our core volumes by 2019, the situation for palm kernel oil (PKO) and its derivatives is very different – and much less straightforward. There is a limited supply of sustainable PKO and looking at all the commitments in place across the industry, this shortage will become even greater in the coming years. In addition, the supply chain for PKO is hugely complex, making it very difficult to identify where PKO originates, which means we need to be very diligent in selecting the suppliers and regions we source our PKO from.
To overcome this, we’re working on a range of initiatives to achieve a positive breakthrough in the market − aimed at bringing more suppliers on board the sustainability journey and improving traceability of PKO. In parallel, we’re looking at an acceptable timeline and glidepath to achieve 100% sustainable PKO.
Understanding palm oil
There are a number of options for buying and certifying that the core volumes of palm oil we use are sustainable.
What do we mean by core volumes, physically certified, mass balance & segregated?
Core volumes exclude derivatives of palm fatty acid distillates (which are by-products of the refining process), tail ingredients and materials processed by third-party manufacturers.
‘Physically certified’ palm oil means sustainable palm oil that is certified through either the Roundtable on Sustainable Palm Oil’s (RSPO) Mass Balance or Segregated certification standards, or an equivalent standard that is independently verified by a third party.
Mass balance means physically certified palm oil that has been mixed with uncertified palm oil at any stage in the supply chain, provided that volumes of certified palm oil are administratively monitored and controlled throughout the supply chain.
Segregated palm oil is physically certified palm oil that has been kept separate from uncertified palm oil throughout the supply chain.
For more information about certification and the RSPO see www.rspo.org.
Engaging our direct suppliers
Of our core volumes of palm oil from physically certified sources in 2018
Our direct suppliers are crucial partners and working closely with them has helped us make significant progress towards our targets. For details of our continuing work with suppliers, see Engaging our palm oil suppliers.
Traceability, transparency & identifying risks
Of our core volumes of palm oil traceable by the first half of 2018
By enhancing our own and our stakeholders' understanding of where our palm oil comes from, we improve our ability to identify and address risks and build trust in our supply chain.
We've made real progress on mapping our suppliers, third-party suppliers and mills in our extended supply chain.
We were the first major consumer goods company to publish our supplier and mill data: we have now identified around 1,600 of the palm oil mills in our ‘mill universe’ that includes our direct and extended supply chain. For details see Improving the visibility of our supply chain.
Including smallholders & driving a jurisdictional approach
Smallholder farmers directly supported in our supply chain in 2017
We're developing and trialling programmes that support the inclusion of smallholders in sustainable supply chains, with a focus on a jurisdictional approach.
The road to sustainable palm oil & systemic change
Since the late 1800s our business has needed supplies of palm oil, for soap and later for many products from shampoos to spreads. But as world demand for this versatile oil grew, so did demands on the environment. The future of the industry began to look bleak as concerns about people, forests and wildlife increased. In 2004 we co-founded the Roundtable on Sustainable Palm Oil with WWF to improve standards in the palm oil industry. Since then we’ve been working hard, not only to deliver on our own ambitious commitments but to drive much-needed systemic change across the industry.
Transforming the industry relies on many partners, from the farmers and suppliers who provide our palm oil, to governments and NGOs and even fund managers who are starting to catalyse specific investment in sustainably produced palm oil. Our timeline (PDF | 581KB) highlights some of the seminal steps we’ve taken in pursuing our commitments, partnerships and projects over the last decade and a half.
How others view our progress
We welcome external scrutiny of our sustainable palm oil commitments and our progress in meeting them. Recent external views include:
- In the twentieth year of participating in the Dow Jones Sustainability Index (DJSI), we were named as leader in the 2018 Personal Products industry, achieving industry-best scores in a number of areas including innovation management, brand management, product stewardship, packaging and climate strategy.
- The CDP (The Carbon Disclosure Project) Forests report in 2018 recognised Unilever as one of its highest-ranking companies. We achieved A- performance grades on three of four commodities: timber, palm oil and cattle products, and B for soy. CDP also recognised us as a world leader for corporate action on climate change for the fourteenth consecutive year. Named in the 'A List', we achieved a performance band A for the seventh year running.
- Greenpeace's Palm Oil Scorecard assesses the progress global consumer brands are making on their no deforestation commitments. In the 2018 Scorecard we were commended for our transparency in publishing our supplier and mill data.
- Global Canopy Programme’s Forest 500 Annual Report 2018 ranked Unilever as one of the top five manufacturers and gave us a score of 4 out of 5, while highlighting that the sector as a whole is not on track to meet 2020 no deforestation goals.
- WWF's 2016 Palm Oil Buyers Scorecard gave Unilever 9 out of 9. 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 target of 100% physically certified palm oil and its derivatives for our core volumes by the end of 2019.