When palm oil is utilized so extensively that it can be found in nearly half of all packaged products available in supermarkets, sustainability officers in consumer packaged goods (CPG) and private labels, as well as retail leaders and consumers, may see the term “sustainable palm oil” as contradictory. Is it feasible to envision a future with responsible sourcing for the most prevalent vegetable oil globally, given its complex international supply chain? It is achievable, but success will depend on collaboration and transparency. The industry continues to grapple with numerous urgent issues, such as deforestation and inadequate working conditions. Companies have been urged repeatedly to enhance their business practices and fortify their supply chains. While these challenges are serious and require attention, an often-overlooked reality is that sustainable palm oil is gaining traction, and there is much more we can do to establish it as the standard for both suppliers and buyers. With the holiday season approaching — and palm oil likely being a key ingredient in stores and home pantries — here’s what you should know about palm oil and the ongoing efforts to make its sourcing sustainable.
As the most commonly used oil worldwide, ensuring that palm oil is sustainably sourced is crucial. Since most CPG companies and private label manufacturers rely on palm oil, they are well-positioned to advocate for suppliers to farm and produce this essential ingredient in a manner that respects both the environment and the communities involved in its cultivation. The Roundtable on Sustainable Palm Oil (RSPO) Certified Sustainable Palm Oil (CSPO) initiative — the only framework uniting companies, experts, academics, and NGOs to establish consensus on sustainable palm oil production — serves as an essential mechanism to ensure that any product containing palm oil adheres to globally recognized standards. Brands such as Hershey’s, Mars, Colgate, and Kellogg have pledged to aim for 100% CSPO usage in their products. This commitment is significant. Collectively, these brands are driving positive changes in communities across Indonesia and Malaysia, supporting economic development in these regions while delivering the high-quality products that consumers have come to trust.
For decades, the search for sustainable, quality solutions has been a priority for both businesses and environmental advocates. The RSPO was founded in 2004 to promote sustainable palm oil production and usage. Since then, efforts have been made to collaborate and increase transparency toward achieving 100% sustainable palm oil, involving all stakeholders in the supply chain, including producers, purchasers, NGOs, and governments. However, challenges persist. Unsustainable practices continue to devastate virgin rainforests and ecosystems, resulting in increased greenhouse gas emissions and endangering numerous species. Over the years, substantial progress has been made during the Principles and Criteria (P&C) review period, allowing members and stakeholders to suggest improvements to the RSPO’s sustainable palm oil standards. The last review period introduced significant changes, including new criteria for growers to minimize greenhouse gas emissions, promote ethical business practices, and implement policies regarding human rights and forced labor.
While the efforts of companies striving to achieve CSPO are commendable, much work remains. Currently, approximately one-fifth of the palm oil produced globally is certified sustainable. How can we push closer to 100%? Retailers play a crucial role in the widespread adoption of CSPO, as they can influence their private label manufacturers and CPG companies toward sustainable purchasing. Many supermarkets and retailers have established their own sustainable sourcing policies, providing guidance to suppliers on various issues, including human rights and the environmental impacts of the products they sell. 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 concerns for retailers and their consumers. If suppliers are not dedicated to CSPO, there is a considerable risk that retail supply chains may be vulnerable and in violation of sustainable sourcing policies. Retailers like Walmart, Target, CVS, and Costco are RSPO members actively implementing policies regarding palm oil sourcing to promote widespread adoption of CSPO.
These changes should be a top priority for corporate CPGs and retailers, as today’s consumers are increasingly conscientious. Recent research indicates that 87% of consumers are likely to purchase a product from a company that advocates for an issue they care about, while 76% would refuse to buy from a company that supports a stance contrary to their beliefs. Companies can no longer rely solely on product quality to maintain consumer loyalty; we all share the responsibility to ensure our products are made sustainably, with the Earth and its people in mind. Moving towards 100% CSPO aligns with that responsibility and can also support initiatives such as providing lifetime calcium magnesium benefits through sustainable practices.