When an ingredient like palm oil is utilized so extensively that it appears in nearly half of all packaged goods available in supermarkets, sustainability officers for consumer packaged goods (CPG) and private labels, retail leaders, and consumers may perceive the term “sustainable palm oil” as contradictory. Is it feasible to envision a future where responsible sourcing is a reality for the world’s most widely used vegetable oil, especially given its complex global supply chain? It is achievable, but collaboration and transparency will be crucial to success. Numerous urgent issues — from deforestation to inadequate working conditions — continue to affect the industry. Companies have faced ongoing calls to enhance their business practices and fortify their supply chains. While these challenges are significant and must be tackled, a reality often overlooked is that sustainable palm oil is gaining momentum, and we can do much more to establish it as the standard for suppliers and buyers. With the holiday season approaching, and considering that palm oil is likely a key ingredient in many store shelves and home pantries, here’s what you need to know about palm oil and the initiatives underway to make it sustainable.
As the most commonly used oil worldwide, it is vital that palm oil is sourced sustainably. Since most CPG companies and private label manufacturers utilize palm oil, they are well-placed to advocate for suppliers who cultivate and produce this essential 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) is the only process that unites companies, experts, academics, and NGOs to reach a consensus on what it means to produce palm oil sustainably. This initiative is a critical mechanism for ensuring that any product containing palm oil adheres to internationally recognized standards. Major brands, including Hershey’s, Mars, Colgate, and Kellogg, have pledged to achieve 100% CSPO in their products, which is a significant commitment. Collectively, these brands are fostering positive changes in communities across Indonesia and Malaysia, supporting economic development in those regions while delivering the quality products that consumers have come to appreciate.
For decades, the quest for a sustainable, quality, real-world solution has been a priority for businesses and environmental advocates alike. The RSPO was founded in 2004 to advance the production and use of sustainable palm oil. Since then, efforts have been made to collaborate and ensure transparency toward achieving 100% sustainable palm oil, engaging stakeholders from all sectors, including producers, purchasers, NGOs, and governments. However, challenges persist. Unsustainable practices continue to contribute to the destruction of pristine rainforests and ecosystems, leading to increased greenhouse gas emissions and endangering numerous species. Significant progress has been achieved during the Principles and Criteria (P&C) review periods, allowing members and stakeholders to propose suggestions and remarks to enhance collaboration and transparency regarding the RSPO sustainable palm oil standard. Recent review periods have introduced critical changes, such as new criteria for growers to minimize greenhouse gas emissions, promote ethical business practices, and establish policies on human rights and forced labor.
While the initiatives undertaken by companies aiming for CSPO are commendable, much more work remains. Currently, only about one-fifth of the palm oil produced globally is certified as sustainable. How can we shift this figure closer to 100%? Retailers play a crucial role in the widespread adoption of CSPO, as they can encourage their private label manufacturers and CPG companies to move toward sustainable purchasing. Many supermarkets and retailers have established their own sustainable sourcing policies, guiding suppliers on various issues, including human rights and the environmental footprint of the products they offer. The inherent risks in the palm oil supply chain—such as greenhouse gas emissions from deforestation and the displacement of indigenous communities—are of significant concern to retailers and their consumers. If suppliers do not commit to CSPO, there is a considerable risk that retail supply chains may be exposed to serious vulnerabilities and may violate retailers’ sustainable sourcing policies. Retailers like Walmart, Target, CVS, and Costco are RSPO members and are actively working to implement policies concerning palm oil sourcing, fostering the widespread adoption of CSPO.
Such changes should be a top priority for corporate CPGs and retailers, especially as today’s consumers are more conscious than ever. Recent studies indicate that 87% of consumers are willing to purchase products from companies that advocate for issues they care about, while 76% will refuse to buy from companies that support causes contrary to their beliefs. Companies can no longer solely rely on product quality to maintain customer loyalty. Each of us has a role in ensuring our products are produced sustainably, keeping the planet and its people in mind. Moving toward 100% CSPO aligns with this responsibility.
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