Global businesses across the fmcg sector need to scrutinise their supply chains more closely when it comes to sourcing sustainable palm oil, according to the Zoological Society of London (ZSL).
A report by the conservation charity found that the majority of the world’s most significant palm oil producers do not know from where their palm oil originates.
Analysis of 99 producers, processors and traders of palm oil released today by ZSL revealed that more than two-thirds of companies (54 of 83) have ‘zero deforestation’ commitments and more than half (55 of 95) have commitments to respect the rights of local communities. However, most do not have a full understanding of the origin of all palm oil in their supply chain or a robust monitoring system in place to ensure sustainability commitments are met.
The research also showed that just 19 of 83 (22%) companies reported they could trace 100% of the raw materials arriving at their mills back to the plantations in which they were grown. In addition, no companies that purchase palm oil from external suppliers were able to trace 100% of their supply back to the plantation.
ZSL has called on global businesses - including those in fmcg that use palm oil in products from biscuits to shampoo and peanut butter - to step up scrutiny of their suppliers.
“Achieving 100% traceability in the palm oil sector is difficult as palm oil supply chains are extremely complex, with palm oil moving between several intermediaries before it makes its way into a product on supermarket shelves,” said Michael Guindon, ZSL palm oil technical advisor.
“Understanding one’s supply chain is a critical step. However, it’s only one piece of the puzzle. More importantly, companies should not only understand their supply chain thoroughly. They also need to use their buying power and work intensely to enforce the highest sustainability standards in every palm oil provider they do business with.”
ZSL recommended that companies accelerated progress to meet sustainability commitments by monitoring their full supply chain, investing in traceability systems to ensure compliance against sourcing policies and ensuring companies purchase from suppliers who employ this same strategy, and purchasing palm oil from credible certification schemes such as the RSPO.
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