UK Palm Oil Policy

Last updated: 15/06/2017

Background

Palm oil is the world’s most widely-traded and versatile, edible vegetable oil. It is used in a wide range of our packaged products, from confectionary to cosmetics. It is also an extremely efficient crop, producing between four to ten times more oil than other crops per unit of cultivated land, with low agro-inputs.

However, the development of oil palm plantations has also been a major driver of deforestation and loss of biodiversity, particularly in Indonesia and Malaysia, which account for 86% of global output. Where this occurs on sensitive ecosystems like peatlands, this can lead to significant releases of C02 that contribute to global warming.

Worldwide demand for vegetable oils is expected to double by 2050 to 240 million tonnes, the majority of which is expected to come from palm oil.

Our approach

Substituting palm oil with other oil crops could simply shift the environmental burden elsewhere and would have significant negative consequences for those communities which grow and rely on palm oil for their livelihoods. For this reason we believe the solution is not to replace palm oil but ensure it is produced sustainably. Developing the right conditions for a strong, sustainable palm oil market is not something that we can achieve alone, which is why we are working with the Consumer Goods Forum (CGF), with other retailers and the Roundtable on Sustainable Palm Oil (RSPO).

  • As members of the CGF we have committed to mobilise our resources to help achieve zero net deforestation by 2020. This includes both individual company initiatives and working collectively in partnership with governments and NGOs.
  • The Retail Palm Oil Group (RPOG) is a non-competitive coalition of UK/EU retailers with a common aim of promoting the adoption of sustainable palm oil.
  • We have also been full members of the Roundtable on Sustainable Palm Oil (RSPO) since 2006. The RSPO is a not-for-profit organisation which unites stakeholders from across the supply chain to develop and implement global standards for sustainable palm oil.

Our commitment

We use around 25,000 tonnes of palm oil in our UK own-brand products each year, all of which comes from sources which advance the production of RSPO-certified sustainable palm oil. As a company we made a commitment in 2007 to ensuring 100% of our palm oil would come from sustainable sources by the end of 2015, through a physical RSPO certified supply chain (segregated or mass balance).  Our own brand suppliers that use palm oil are required to hold a Chain of Custody certificate to substantiate their palm oil source claims. A prerequisite for the Chain of Custody certification is RSPO membership.

There are three RSPO-certified palm oil supply chains options:

  • ‘Segregated’ palm oil: certified sustainable palm oil which is kept physically separate from conventional (uncertified) palm oil throughout the supply chain up to the final product.
  • ‘Mass balance’ palm oil: palm oil from certified mills is mixed with conventional palm oil during transport and storage. Movements of mixed oil are administratively monitored by UTZ Certified so that companies cannot sell more sustainable palm oil than they have purchased.
  • The 'Book & Claim' system: this is a certificate trading scheme where certified sustainable palm oil is produced and evidence of this (‘GreenPalm’ certificates) is sold directly to end users such as food manufacturers to match the tonnage of palm oil used in their products. Book & Claim has been a major driver in the development of markets for sustainable palm globally

Our progress

For the 2016 calendar year reporting period, 99% of the palm oil used in our own-brand products was from an RSPO certified physical supply chain (segregated 61%; mass balance 38%).

For our own-brand food products alone which represents the majority of the palm oil used within our business, the percentage of palm oil from a physical certified supply chain source was 99.5% (segregated 69.11%; mass balance 30.41%).

We are working to ensure the final remaining 1% transition to a physical supply chain of certified sustainable palm. This is predominantly within our personal care products range where physical supply chains for complex derivatives continue to be more challenging to establish.

Future challenges

Significant challenges remain for the palm oil industry including continuing unsustainable and illegal deforestation, and growing evidence of labour exploitation at plantation level. These issues are not isolated to the palm oil industry but will need to be addressed if palm oil is to achieve its potential to meet growing global demand for vegetable oil in a way that is socially and environmentally responsible.

Having achieved our UK business target, we recognise we now have an equally important role to play in helping to make the further transition to sustainable, deforestation free palm.

We will do this in partnership with our key product partners, and in collaboration with other industry partners through the Consumer Goods Forum (CGF), the Retail Palm Oil Group and with other key stakeholders including NGOs

We intend to publish further details on our new zero-net deforestation approach in the next 3 months.

 

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