Unprecedented Access to Certified Sustainable Palm Oil Benefits Industry and Environment

Food, Cosmetics, and Energy Sectors All Benefitting from Increased Availability of Certified Sustainable Palm Oil

Industry by industry, third-party certification of sustainability performance is increasingly helping to move the dial toward more responsible production and supply chain practices in line with UN Sustainable Development Goals.  Nowhere is this more apparent that in the case of palm oil.

Within the past few years, palm oil certification under the Roundtable for Sustainable Palm Oil (RSPO) standard has reached a remarkable 21% penetration of the global market. This watershed achievement is paving the way for product manufacturers to incorporate certified palm oil into their product ingredient specifications, shifting entire industries and making a positive difference for people and the planet.

Increased certification penetration is being driven not only by growing consumer demand and pressure from retail buyers, but also by governmental actions. For instance, in Europe, the European Parliament has called for a clampdown on the imports of unsustainable palm oil for use in biofuel, and is proposing that unlike other biofuels sold in the EU, a single approved certification scheme for palm oil be used.

Why is this so important?

Palm oil enjoys tremendous popularity.  It is the most widely used vegetable oil in the world, accounting for one-third of all vegetable oil consumption. Its uses span a wide range of products, including processed foods, cosmetics and body care products, detergents, and biofuels.

At the same time, palm oil has become a poster child of irresponsibility, with the endangered orangutan as the iconic symbol of what’s gone wrong.  Palm oil production has contributed to widespread deforestation in some of the world’s most eco-diverse regions, including Indonesia and Malaysia, the dominant producing countries, as highlighted in Leonardo DiCaprio’s recent film, Before the Flood.  This tropical deforestation has resulted in ecosystem destruction, as well as substantial loss of forest carbon sequestration, crucial to the earth’s climate.  Burning of forestlands also produces black carbon, now recognized not only as a dangerous air pollutant, but also as an extremely powerful climate pollutant in the latest scientific reports from the Intergovernmental Panel on Climate Change (IPCC). Peatlands are likewise being destroyed, accelerating the release of yet another powerful climate pollutant, methane. It’s no wonder that efforts to reform the palm oil industry have captured so much attention.

Consumers care

Consumer awareness of environmental and social issues has never been higher, a factor that is driving an increasing number of product brands to seek out certified palm oil.  For instance, in the US, the latest consumer survey from Cone Communications reported that a whopping 86% of Americans now expect companies to be proactive on social and environmental issues, and 79% are actively seeking products that are environmentally and socially responsible. The World Wildlife Fund (WWF), one of the founders of RSPO, publishes a periodic scorecard to rank well-known retailers and product companies on their palm oil policies and practices, a tool for consumers who want to choose responsibly.

The role of RSPO

In 2001, following the successful establishment of the Forest Stewardship Council in the early 1990s based on a multi-stakeholder model, the World Wildlife Fund identified four additional global commodities associated with significant environmental issues, including palm oil.  The inaugural meeting of the RSPO was held just two years later, envisioned as a vehicle “to transform markets to make sustainable palm oil the norm.” The Roundtable included members of civil society, palm growers, palm oil producers, traders, product manufacturers, retailers, and other stakeholders. The first pilot standard emerged a few years later in the mid 2000s.

Today, there are two RSPO standards – one for palm oil production (RSPO P&Cs), focused on the palm oil mill and all upstream industrial operations, and the other focused on the downstream chain of custody (RSPO SCC), including ingredient processors, product manufacturers, and retailers.  Certifications involve extensive documentation audits, site inspections, and interviews.

Early on, certifications took place primarily on the production side, but more recently the amount of supply chain certifications has increased dramatically as more certified palm oil is available for use in consumer goods.  Most of the producers who could readily qualify in Indonesia and Malaysia have been certified, and qualified producers in other countries are likewise stepping up.  Given the rapid rise in available sources of certified palm oil, it is becoming easier than ever for brands to jump in.  Many already have, such as Unilever, Baskin Robbins, Safeway, L’Oréal, and Colgate-Palmolive, and pressure is mounting on product manufacturers to comply, especially from their retail customers.  In the past, RSPO credits had to be purchased because there weren’t enough actual supplies.  But just within the last year or so, enough supply has been certified to be able to satisfy the demand for certified palm oil.

The certification landscape

A variety of certification programs have cropped up to address this issue.  In addition to RSPO, companies trading in Europe can seek certification under the ISCC (International Sustainability and Carbon Certification) system.  More recently, Malaysia and Indonesia have each come out with their own certification programs (Malaysian Sustainable Palm Oil and Indonesia Sustainable Palm Oil).  These latter efforts are less rigorous, but may perhaps serve as stepping stones toward more comprehensive RSPO certification in the long run.

Companies who successful satisfy the requirements of the RSPO standard are entitled to apply for use of the Certified Sustainable Palm Oil (CSPO) logo.

For more information about certification, click here, or contact Matt Rudolf at mrudolf@scsglobalservices.com.