Palm oil: WWF name and shame top global buyers

With certified palm oil so easy to source, why are many large companies still failing to hit their own targets for sustainability?
Oliver Balch Guardian Professional 28 Jan 14;

Industry's main players were to protect rainforests and threatened species, but large buyers still buying unsustainable palm oil. Photograph: Anup Shah/Getty Images

It wasn't supposed to be this way. With commercial palm plantations running rampant, the industry's main players would group together and usher in a more sustainable form of palm oil production. Destruction of the rainforests would then slow, threatened species such as the orangutan would be protected, and consumers could shop with a clear conscience.

More than a decade on and the picture is a lot less rosy. Palm oil continues to proliferate in everything from ice cream to shampoo but sustainable palm oil has failed to catch on, as a punchy short film by the environment group, WWF, demonstrates.

The film comes on the back of a recent report by WWF that finds "disappointing" levels of uptake of certified palm oil by the world's largest retailers, food companies and consumer goods producers. "Palm oil buyers have increased their use of sustainable palm oil," says WWF's 2013 Scorecard, "but are still not doing enough to support responsible growers and reduce the effects of growing this popular oil in some of the world's most vulnerable tropical habitats."

Of the 130 companies surveyed, fewer than half purchase palm oil that meets the social and environmental standards set by the Roundtable for Sustainable Palm Oil (RSPO), a voluntary scheme that now covers about 40% of palm oil production.

The result is an inexcusable supply glut. Collective demand among the surveyed companies comes to almost 7m tonnes of palm oil per year – a volume that could "easily" be met by current certified stocks, according to WWF. On average, certified producers collect a sustainability premium for only about half their production. The remainder gets thrown in with non-certified palm oil and is priced accordingly.

When WWF carried out its previous survey two years ago, it concluded that there was "absolutely no reason" why palm oil buyers should not be purchasing 100% certified palm oil. That's even truer today. "Since then [2011] supply has almost doubled, but still overall less than half the palm oil the companies we looked at were using was certified," says WWF.

Some buyers have already joined the 100% club. Unilever, for instance, one of the largest palm oil buyers in the world and a founding member of RSPO, buys all its palm oil from certified providers. Two dozen of the 78 manufacturers in the study do likewise, including the cleaning brand Ecover and beauty products firm L'Oréal. UK supermarket brands Sainsbury, Tesco, Waitrose, M&S, Asda and the Co-operative group feature in a similar leading list of 21 retailers that buy 100% certified.

WWF identifies a second tier of companies that are travelling at a far slower pace. Procter & Gamble and McDonald's buy just 13% of their palm oil from certified sources. At 17%, PepsiCo is another big name on the laggard list. This sluggishness comes despite a pledge by many large buyers to go 100% certified by the end of next year – a target for which there is "no certainty" that many will reach, says WWF.

Switching to fully certified purchasing is relatively painless, so why aren't more companies doing it? According to WWF, it all comes down to simple foot-dragging by large buyers.

Almost one third (31%) of the companies surveyed have made only vague commitments to buying sustainable palm oil or none whatsoever. WWF's report subsequently concludes with a schoolmasterly "must work harder" message for the world's big palm oil buyers, an argument echoed by RSPO's secretary general Darrel Webber.

That's all well and good, but will remonstrating with the buyers work? Naming and shaming, as the Scorecard does, will certainly chivvy some reputation-conscious companies along. But there are more fundamental issues at play. One is the question of price: some buyers are clearly reluctant to pay the small premium that comes with certification. Other might claim to be confused. The Indonesian government, for instance, now runs its own rival certification scheme.

The thorniest issue of all revolves around integrity. Under the current RSPO structure, buyers can purchase certificates from sustainable producers under what's known as the GreenPalm scheme or Book and Claim. This avoids the more costly option of segregating certified palm oil in the distribution chain, but it means that the physical palm oil that certificate buyers receive is very possibly unsustainable. That raises questions in consumers' minds about the true sustainability of the product in their hand with a RSPO label.

Over the years, environment groups have also called into question the strictness of the RSPO criteria and the exactitude with which they are monitored and enforced. Greenpeace, for instance, maintains that forest destruction has continued apace despite the RSPO's introduction 12 years ago. The campaign group is pushing for a moratorium on converting forest and peatland into oil palm plantations.

WWF has a lot is riding on the "multi-stakeholder" roundtable model as an exemplar of a market-based solution to a sustainability challenge. As co-founder of RSPO, it has helped establish similar solutions in other global commodity chains, from beef and soya beans to sugar and biofuels.

WWF would like to see certified growers rewarded. But certification is a free-market game and, unlike in the movies, the good guys don't always win.