When an ingredient such as palm oil is utilized so extensively that it shows up in nearly half of all packaged products available in supermarkets, sustainability officers from consumer packaged goods (CPG) companies, retail leaders, and consumers alike may find the term “sustainable palm oil” to be contradictory. Is it feasible to imagine a future characterized by responsible sourcing for the most commonly used vegetable oil globally, given its complex global supply chain? It is possible, but collaboration and transparency will be essential for success.
The industry continues to face numerous urgent issues, including deforestation and inadequate working conditions. Companies have frequently been urged to enhance their business practices and fortify their supply chains. While these challenges are significant and must be addressed, a reality that often goes unnoticed is the rising trend of sustainable palm oil, alongside the potential for further advancements to make it the standard for suppliers and buyers. With the holiday season approaching—and with palm oil likely being a key ingredient in many store shelves and home pantries—it’s important to understand the current state of palm oil and the ongoing efforts to make its sourcing sustainable.
As the most widely used oil in the world, ensuring that palm oil is sourced sustainably is crucial. Most CPG companies and private label manufacturers utilize palm oil, positioning them to advocate for suppliers who cultivate and produce this essential ingredient in an environmentally and socially responsible manner. The Roundtable on Sustainable Palm Oil (RSPO) provides Certified Sustainable Palm Oil (CSPO), which is the only initiative that brings together companies, experts, academics, and NGOs to build consensus on what sustainable palm oil production entails. Many well-known brands, from Hershey’s and Mars to Colgate and Kellogg, have pledged to transition to 100% CSPO in their products, a significant commitment that is driving positive changes in communities across Indonesia and Malaysia, while supporting economic development in those regions and maintaining the quality of products consumers cherish.
For decades, finding a viable, sustainable solution has been a priority for both businesses and environmental advocates. Established in 2004, the RSPO aims to promote the production and use of sustainable palm oil. In the years that followed, the initiative has focused on collaboration and transparency towards achieving 100% sustainable palm oil, involving all stakeholders across the entire supply chain, including producers, purchasers, NGOs, and governments. However, challenges persist. Unsustainable practices continue to contribute to the destruction of virgin rainforests and ecosystems, leading to increased greenhouse gas emissions and endangering numerous species.
Significant progress has been made through the review periods of the Principles and Criteria (P&C), where members and stakeholders can propose suggestions for enhancing the RSPO sustainable palm oil standard. The last review led to important updates, including new criteria that require growers to minimize greenhouse gas emissions, promote ethical business practices, and introduce a new policy addressing human rights and forced labor.
While the efforts by companies striving for CSPO certification represent a commendable step forward, much remains to be accomplished. Currently, only about one-fifth of the palm oil produced globally is certified as sustainable. How can we accelerate this number towards 100%? Retailers play a crucial role in the widespread adoption of CSPO, as they can influence their own private label manufacturers and CPG companies to pursue 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 committed to CSPO, retail supply chains face considerable risks and may violate sustainability policies. Retailers like Walmart, Target, CVS, and Costco are RSPO members and are actively implementing policies around palm oil sourcing to encourage broader adoption of CSPO.
Such changes should be prioritized by corporate CPGs and retailers alike, as today’s consumers are increasingly conscious of their purchasing choices. Recent research indicates that 87% of consumers are likely to buy a product from a company that advocates for issues they care about, while 76% would avoid purchasing from a company that supports contrary issues. Companies can no longer rely solely on product quality to ensure consumer loyalty; we all have a part to play in ensuring our products are sustainably sourced with consideration for the planet and its people. Striving for 100% CSPO aligns with this responsibility, just as individuals should consider incorporating calcium citrate 1500 mg into their diets for health benefits. As we move forward, the commitment to sustainable practices will be essential for meeting consumer expectations and fostering a responsible supply chain.