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. In 2016, we further strengthened our sustainable Palm Oil policy by focusing on five key principles including '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).
Of our palm oil was sustainably sourced by 2019
In 2016, we set 2019 as our target date to achieve 100% for palm oil. However at that time, we couldn’t set a clear timeline on palm kernel oil due to the major difficulties of sourcing sustainable volumes.
Nevertheless, we’ve made progress in both oil varieties and can report that in 2019, we sourced 95% physically certified palm oil and palm kernel oil for our core volumes.* This result was achieved through a combination of segregated and mass balance supply.
In addition, we sourced the remaining volumes through independent smallholder certificates to reach a total of 99.6% sustainably sourced. See Targets & performance.
* Core volumes exclude derivatives of palm fatty acid distillates, which are by-products of the refining process, and tail ingredients. These represent very small volumes in our products. Core volumes also exclude materials processed by third-party manufacturers, and volumes purchased and used in certain markets due to market norms.
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 eight salient issues in our Human Rights Report 2017 (PDF | 10MB) and 2019 human rights update, 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.
Engaging suppliers on NDPE commitments
In 2018, Unilever became the first consumer goods company to publicly disclose the palm oil suppliers, refineries and mills in our supply chain because we believe that transparency is one of the best ways to ensure no deforestation. We want to be the first to know and act when issues are identified within our supply chain. To assist with this, we launched a public palm oil grievance procedure whereby issues can be highlighted to us. These are then published on our website along with details of the action we’re taking to resolve them.
We monitor our supply chain via a regular Deforestation and Burnt Area Monitoring Report through our partnership with Aidenvironment and we have made a recent investment to support the earlier detection of deforestation using radar detection, which will be made publicly available through WRI’s Global Forest Watch platform.
We suspend suppliers linked to deforestation.
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.
Understanding palm oil purchases
There are several 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
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.
Working with smallholders
We're developing and trialling programmes that support the inclusion and certification of smallholders in sustainable supply chains, with a number of programmes running with independent smallholder groups and through jurisdictional approaches.
For details of our approach and progress, see The importance of smallholders.