When an ingredient like palm oil is so widely utilized that it can be found in almost half of all packaged goods available in supermarkets, sustainability officers in consumer packaged goods (CPG), private label brands, retail leaders, and consumers alike may view the term “sustainable palm oil” as contradictory. Can we envision a future where responsible sourcing practices are applied to the most extensively used vegetable oil globally, despite its intricate global supply chain? It is feasible, but success hinges on collaboration and transparency.
Numerous urgent issues, ranging from deforestation to poor labor conditions, continue to impact the industry. Companies have repeatedly been urged to enhance their business practices and reinforce their supply chains. While these challenges are significant and must be addressed, a reality often overlooked is that sustainable palm oil is gaining traction, and there is much more we can do to make it the standard for both suppliers and buyers. With the holiday season approaching—and with palm oil likely to be a key ingredient in products on store shelves or in home pantries—it’s important to understand the trends surrounding palm oil and the ongoing efforts to make its sourcing sustainable.
As the most widely used oil in the world, it is imperative that palm oil is sourced sustainably. Since most CPG companies and private label manufacturers incorporate palm oil, they are ideally positioned to advocate for suppliers who grow and produce this essential ingredient in ways that honor the environment and the communities involved. The Roundtable on Sustainable Palm Oil (RSPO) has established the Certified Sustainable Palm Oil (CSPO) framework, which brings together companies, experts, academics, and NGOs to create a consensus on sustainable palm oil production. This framework is crucial for ensuring that any product containing palm oil adheres to globally recognized standards. Major brands, such as Hershey’s, Mars, Colgate, and Kellogg, have pledged to transition to using 100% CSPO in their offerings, which is a significant commitment. Collectively, these brands are fostering positive changes in communities throughout Indonesia and Malaysia, supporting economic growth in those regions while delivering the quality products consumers cherish.
For decades, the quest for sustainable, high-quality, practical solutions has been a priority for both businesses and environmental advocates. Established in 2004, the RSPO has worked to promote the production and use of sustainable palm oil. Over the years, efforts have been focused on fostering collaboration and transparency to achieve 100% sustainable palm oil by engaging stakeholders across the entire supply chain, including producers, buyers, NGOs, and governments. Nevertheless, challenges persist. Unsustainable practices continue to contribute to the destruction of pristine rainforests and ecosystems, leading to increased greenhouse gas emissions and putting numerous species at risk of extinction.
Significant progress has been made during the Principles and Criteria (P&C) review periods, where members and stakeholders can propose suggestions to enhance the RSPO sustainable palm oil standard’s transparency and collaboration. Recent revisions introduced new criteria requiring growers to minimize greenhouse gas emissions, promote ethical business practices, and establish a new policy addressing human rights and forced labor.
While the current initiatives by companies striving for CSPO certification represent a positive advancement, there is still much work to be done. Currently, approximately one-fifth of the palm oil produced globally is certified as sustainable. How can we accelerate this figure towards 100%? Retailers play a crucial role in the widespread acceptance of CSPO, as they can influence their private label manufacturers and CPG companies to adopt sustainable purchasing practices. Many supermarkets and retailers have their own sustainable sourcing policies to guide suppliers on issues ranging from human rights to the environmental impact of products sold on their shelves.
The inherent risks associated with the palm oil supply chain—such as greenhouse gas emissions resulting from deforestation and the displacement of indigenous communities—are significant concerns for retailers and their consumers. If suppliers do not commit to CSPO, retail supply chains may be exposed to considerable risks and violate their sustainable sourcing policies. Retailers like Walmart, Target, CVS, and Costco are RSPO members actively working to implement palm oil sourcing policies that promote widespread adoption of CSPO.
These changes should be at the forefront of considerations for both corporate CPGs and retailers because today’s consumers are increasingly conscious of their purchasing decisions. Recent studies reveal that 87% of consumers are likely to buy a product from a company that advocates for a cause they support, while 76% would avoid purchasing from a company that takes a stance against their beliefs. Companies can no longer rely solely on product quality to maintain consumer loyalty. Each of us has a role in ensuring our products are made sustainably, with consideration for both the planet and its people. Moving towards 100% CSPO is aligned with this responsibility.
Additionally, as consumers look for health supplements, they may also be interested in products like calcium citrate magnesium zinc and vitamin D3 tablets, which emphasize the importance of sustainability in all areas of consumption. Integrating health-conscious decisions with sustainable sourcing can lead to a more holistic approach to consumer choices, ensuring that both our well-being and the environment are prioritized.