UK Palm Oil policy
Last updated: 19/05/2016
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 palm oil 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. Much of this also occurs on sensitive ecosystems like peatlands, which releases C02 that contributes to global warming. Worldwide demand for palm oil is expected to double by 2050 to 240 million tonnes.
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 can be 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 other retailers, with the Consumer Goods Forum (CGF) 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.
- 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.
We use around 30,000 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 ‘segregated’ RSPO-certified supply chains. We amended this in 2015 to allow for the use of certified sustainable palm from ‘mass balance’ sources in limited circumstances where ‘segregated’ sources were still not available. This was in line with the rest of the supermarket sector and in response to the continuing practical difficulties faced by those industries using complex palm derivatives to develop segregated supply chains. 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.
Currently around 93% of the total palm oil used in our own brand products comes from either a mass balance (25%) or segregated (68%) certified sustainable source and we have plans in place to increase this to 95% by the middle of the year. This includes palm oil used as an ingredient in food products and within health and beauty or household products, such as shampoo.
For own brand food products only, the percentage of palm oil from a mass balance or segregated source is around 99%.
The remainder of our palm oil that is not from a physical supply chain is covered by Book & Claim (Green Palm certificates) and includes small volumes of complex palm derivatives for which the development of physical supply chains remains a challenge. This is an industry issue and we will continue to work with our suppliers to look for solutions.
We are pleased with our progress, achieved through the hard work of our teams and our suppliers, however we know there is more still to do. Significant challenges remain for the entire industry, including continued unsustainable and illegal deforestation. We are now working with key suppliers and other industry partners to ensure that we can continue to offer our customers products which contain sustainably-produced palm oil.
For more information contact our corporate responsibility team - firstname.lastname@example.org