Sourcing palm oil responsibly

Last updated: 28/04/2020

Palm oil is the world’s most widely-traded and versatile vegetable oil. Indonesia and Malaysia account for 86% of global production, while India, China and the EU are the three largest consumers (38%).

The Palm Oil Sustainability Challenge

Palm oil is an extremely efficient crop, producing up to ten times more oil than other oil crops per unit of cultivated land. However, as the world population increases, global demand for vegetable oils, including palm oil is also expected to grow, placing considerable pressure on the world’s forests and other native habitats. Palm oil has the greatest potential to meet the growing global demand for vegetable oils with the least amount of land than any other oil crop. However, the development of oil palm plantations has been a major driver of global deforestation, climate change and biodiversity loss. Addressing these challenges requires sustainable production that ensures any future expansion protects forests, peat lands and other native habitats.

Palm oil production is driven by a range of producers, from large plantation companies to small-scale family farmers. Achieving sustainable production requires the engagement of all producers. Large plantation companies are making significant progress in addressing deforestation in palm oil production, for example through sustainability certification. However, to meet the palm oil sustainability challenge, certification standards need to be continuously strengthened. Additionally, smallholders, who represent 40 per cent of global production must be supported to transition to sustainable production.

In order to achieve sustainable production, producers and supply chain customers need effective forest governance. Producing and consuming nations need to enable the development and implementation of national sustainable palm oil initiatives. Tesco can contribute to addressing these sustainability challenges.

Our Approach

Tesco is committed to zero-net deforestation in our sourcing of palm oil. As members of the Consumer Goods Forum (CGF) we have committed to achieve this by 2020. We have also committed to sourcing 100% certified palm oil by 2020 (Tesco Own Brand products) as a member of the Roundtable on Sustainable Palm Oil (RSPO).

Beyond our supply chain, we work collectively at an industry level and with other stakeholders (such as NGOs and governments), because we recognise that developing the right conditions for a sustainable palm oil market requires effective collaboration. Our approach to contributing to zero-net deforestation in palm oil follows our Improve-Transform-Advocate approach.

Improve: achieving sustainable palm oil in our supply chain

We will continue to source only RSPO certified for our Tesco Own Brand products containing palm oil. In 2019, 100% of our Tesco Own Brand products containing palm oil both in the UK and our international markets were RSPO certified (see below for details). From 2021, we will be further strengthening our UK palm oil policy by requiring all palm oil used in our Tesco UK Own Brand products to come from an RSPO certified Segregated source (where feasible).

Transform: encouraging innovative solutions

We are actively participating in the strengthening and continuous improvement of the RSPO to support its aim to make sustainable palm oil the norm.

We will encourage innovative solutions for transforming the palm oil industry (e.g. jurisdictional sourcing, greater inclusion of smallholders).

We are also leading members of the Palm Oil Transparency Coalition which provides an annual ranking of the zero deforestation performance of palm oil companies to enable members of the coalition, like ourselves, to ensure that our suppliers are sourcing palm oil from companies that are making progress on their zero deforestation commitments.

Advocate: mobilising others for action

We will work with others on engagement to supporting national initiatives by producing and consuming countries.

Progress (2019 calendar year results)

100% of our Tesco Own Brand products containing palm oil were RSPO certified in 2019 calendar year. Below is our 2019 results for the UK and our Tesco international markets.

Tesco UK

100% of the palm oil used in our Tesco UK Own Brand products was RSPO certified (Segregated - 65%; Mass Balance - 35%).

Tesco ROI

100% of the palm oil used in our Tesco ROI Own Brand products was RSPO certified (Segregated - 45%; Mass Balance - 55%).

Tesco Central Europe

100% of the palm oil used in our Tesco CE Own Brand products was RSPO certified (Segregated - 40%; Mass Balance - 36%; Credits – 24%).

Tesco Asia

100% of the palm oil used in our Tesco Asia Own Brand products was RSPO certified (Segregated - 3%; Mass Balance - 52%; Credits – 45%).

For more information contact our corporate responsibility team - cr.enquiries@uk.tesco.com