When an ingredient like palm oil is used so extensively that it can be found in nearly half of all packaged products available in supermarkets, sustainability officers from consumer packaged goods (CPG), private label brands, retail leaders, and consumers might view the term “sustainable palm oil” as contradictory. Can we envision a future where responsible sourcing is the norm for the most widely utilized vegetable oil globally, given its complex international supply chain? It is possible, but collaboration and transparency will be essential for success. The industry continues to grapple with pressing challenges, from deforestation to inadequate working conditions. Companies have frequently been urged to enhance their practices and fortify their supply chains. While these issues are serious and require attention, one often-overlooked reality is that sustainable palm oil is gaining traction, and there is much more we can do to normalize it among suppliers and buyers. With the holiday season approaching—and since palm oil is likely to be a key ingredient in store shelves and home pantries—here’s what you need to know about palm oil and the ongoing efforts to ensure its sustainability.
As the most widely used oil in the world, it is crucial that palm oil is sourced sustainably. Since most CPG companies and private label manufacturers use it, they are in a prime position to advocate for suppliers who cultivate and produce this vital ingredient in a manner that respects both the environment and the communities involved. The Roundtable on Sustainable Palm Oil (RSPO) Certified Sustainable Palm Oil (CSPO) initiative is the only process that brings together companies, experts, academics, and NGOs to establish a consensus on what it means to produce palm oil sustainably. This is a vital mechanism to ensure that any product containing palm oil adheres to globally recognized standards. Major brands like Hershey’s, Mars, Colgate, and Kellogg have committed to achieving 100% CSPO in their products, which is a significant step forward. Collectively, these brands are fostering positive changes in communities across Indonesia and Malaysia, supporting economic development in those regions while maintaining the quality of products that consumers love.
For decades, businesses and environmental advocates have prioritized finding sustainable, practical solutions. The RSPO was founded in 2004 to promote the production and use of sustainable palm oil. Since then, efforts have been made to collaborate and enhance transparency toward achieving 100% sustainable palm oil, involving producers, purchasers, NGOs, and governments. However, challenges persist. Unsustainable practices continue to contribute to the destruction of pristine rainforests and ecosystems, resulting in increased greenhouse gas emissions and putting many species at risk of extinction. Over the years, substantial progress has been made through the Principles and Criteria (P&C) review process, where members and stakeholders can propose suggestions and feedback to ensure consistent collaboration and transparency within the RSPO sustainable palm oil standard. The most recent review period saw significant changes, including new criteria that require growers to reduce greenhouse gas emissions, promote ethical business practices, and establish a new policy on human rights and forced labor.
While the initiatives undertaken by companies striving for CSPO are commendable, there is still much work to be done. Currently, only about one-fifth of the palm oil produced globally is certified as sustainable. How can we accelerate this progress towards 100%? Retailers play a crucial role in the widespread adoption of CSPO, as they can influence their private label manufacturers and CPG companies to pursue sustainable procurement. Many supermarkets and retailers have developed their own sustainable sourcing policies, guiding suppliers on various issues, including human rights and the environmental impacts of the products they offer. The inherent risks associated with the palm oil supply chain—such as greenhouse gas emissions from deforestation and the displacement of indigenous communities—are significant to retailers and their consumers. If suppliers do not commit to CSPO, retail supply chains may be exposed to serious risks and could violate retailers’ sustainable sourcing policies. Retail giants like Walmart, Target, CVS, and Costco are RSPO members actively working on implementing palm oil sourcing policies to promote the widespread adoption of CSPO.
These changes should be a priority for corporate CPGs and retailers alike because today’s consumers are increasingly conscious of sustainability. Recent studies indicate that 87% of consumers are inclined to purchase products from companies that advocate for issues they care about, while 76% would refuse to buy from companies that support causes contrary to their beliefs. Companies can no longer rely solely on product quality to maintain consumer loyalty; we all must contribute to ensuring our products are made sustainably, with consideration for both the planet and its people. Moving towards 100% CSPO aligns with this responsibility, much like the importance of ensuring that supplements, such as calcium citrate in pregnancy, are sourced responsibly and sustainably as well.