Unilever publicly discloses palm oil supply chain: ‘You can’t outsource your responsibilities,’ says Polman

By Niamh Michail contact

- Last updated on GMT

A palm oil processing plant in Sumatra, Indonesia © GettyImages/Nieuwenhuisen
A palm oil processing plant in Sumatra, Indonesia © GettyImages/Nieuwenhuisen

Related tags: Palm oil

Unilever has become the first consumer goods company to publicly disclose all the suppliers and mills it buys palm oil from, both directly and indirectly, it says.

Unilever is one of the biggest consumer goods manufacturers in the world, with around 2.5 billion people using at least one of its products every single day.

The company uses palm oil in many of its goods, from snacks, soups, soap and toothpaste, working with around 1,400 mills and 300 direct suppliers to buy its palm oil.

Mapping these suppliers has highlighted both the progress made and the “serious environmental and social issues prevalent in the industry”, ​it said, and by having a better idea of where its palm oil comes from, it will be able to proactively identify problems and address them both quickly and effectively.

A list of Unilever’s suppliers that sell it palm oil, palm kernel oil and derivatives can be seen here.

“As a result of this data being available we are making it much easier for others to bring demonstrable challenges and insights to our attention,” ​it said in a statement. “This in turn enables us to investigate and work to remedy the issues alongside suppliers, NGO partners, governments and other stakeholders.”

“Transparency and traceability are important as we can only effectively address the systemic issues associated with how palm oil is cultivated and produced – such as deforestation and human rights abuses – if we know exactly where the problems are."

Speaking at a panel at this year’s World Economic Forum in Davos, Unilever’s CEO Paul Polman said: “A lot of people think if you outsource your value chain you can outsource your responsibilities. I don’t think so. We need to be at the forefront of change. This is why Unilever is committed to greater transparency and continue to work with our partners to drive positive change in the palm oil industry.”

'Commercial sensitivities and complexities'

Unilever’s chief supply chain officer, Marc Engel, said it had taken "perseverance​" to publish its suppliers due to "traditional commercial sensitivities and the complexity of the palm oil supply chain".

Farmers grow fruit on plantations and sell the palm fruit to middle men and agents, who in turn sell it to a mill for processing. Traders then transport the oil to refineries for further processing. Consumer goods companies like Unilever buy palm oil at this point.

Capture
© RSPO

“Unilever believes that complete transparency is needed for radical transformation. We want this step to be the start of a new industry-wide movement,​” Engel added.

Unilever uses around one million tonnes of crude palm oil and its derivatives and about 0.5 million tonnes of crude palm kernel oil and its derivatives a year. It has set itself the goal of only buying palm oil that has been physically certified as sustainable by 2019, and claims to be ahead of its own targets, achieving 53% in 2017 (equivalent to 573,000 metric tonnes) against a 50% target.

It says its in-house policy on sustainable palm oil​,​ published in 2013 and updated in 2016, builds upon the RSPO Principles & Criteria and New Planting Procedure and adhere to all relevant national and international laws and conventions.

RSPO’s ‘ready solutions’

The Roundtable on Sustainable Palm Oil (RSPO) congratulated Unilever for its effort.

“We think being transparent and traceable is indeed the first of many steps towards real sustainable supply chains [and] we encourage all RSPO members to promotetransparency,” ​director of global outreach and engagement at RSPO Stefano Savi told FoodNavigator.

Savi said manufacturers could use RSPO certification as a “ready solution​” that goes beyond traceability to tackle social and environmental issues.

“For example, RSPO Identity Preserved trace supply back to single certified sustainable mills, bringing supply chains much further along that same journey,” ​he said.

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