The Last Place You Might Look: Palm Oil Bears Heavy Responsibility For Climate Change

Forced and child labor are rife within the palm oil supply chain. Indigenous landowners and other smallholders have seen their rights trampled and lands seized by unscrupulous developers. Somewhere between 20 and 100 million Indonesians rely directly on the forest for their livelihoods.

Deforestation is also an assault on species such as the Sumatran orangutan, elephant, and tiger, which are critically endangered. When primary forests are cleared for development, only about 15% of animal species can survive in the resulting plantations.

Palm oil may not even be much healthier than trans fats, according to a 2009 study by the USDA/Agriculture Research Service. But for better or worse, this train has left the station. It would be impractical to boycott an ingredient found in thousands of supermarket products, but the pressure is on to ensure that palm oil is produced responsibly and sustainably.

Shifting Standards

As members of the Roundtable on Sustainable Palm Oil (RSPO), a global standard-setting body established a decade ago, many companies that use palm oil in food or personal-care products have made commitments to purchase only RSPO-certified palm oil. The problem, however, is that RSPO standards simply aren’t strong enough. As explained in a recent Union of Concerned Scientists (UCS) report, while RSPO standards forbid member companies from expanding into primary forests, “vast areas of secondary, disturbed, or regenerating forests are left unprotected. This means it is possible for plantations to be labeled ‘sustainable’ yet still be driving deforestation.” Peatlands, which are “highly interconnected and extremely fragile,” are “also given limited protection under the RSPO.” The situation has prompted organizations like the UCS, Rainforest Action Network, Oxfam, and others to mount an intense public pressure campaign on palm oil suppliers and their corporate customers.

The results have been encouraging. Since last autumn, hardly a month has gone by without at least one major corporate purchaser of palm oil making an announcement that it will not only buy certified palm oil exclusively, but hold its suppliers to even stronger measures than RSPO certification requires. Companies such as Colgate-Palmolive, Mars, Safeway, Pepsi, Smuckers, and Nestlé are some of those which have strengthened their policies in recent months.

“A critical part of our campaign’s theory of change is to untangle the complex web of actors operating within the global palm oil supply chain. By the time a bar of chocolate made by a Snack Food 20 company, such as Hershey’s, reaches your local grocery store, the palm oil within that chocolate has passed through many different steps along the supply chain, from the plantation where the oil palm fruit was grown to a mill, a refinery, a shipping vessel, another refinery in the U.S., a food manufacturing plant, and finally a retail outlet. Every actor along the supply chain, from the Snack Food 20 who put palm oil in the chocolate bar to the palm oil traders who buy and ship it and the palm oil producers who grow it, are benefiting from this complex web, as it’s hard to distinguish conflict palm oil from truly responsible palm oil. By creating traceable supply chains, companies can learn where their palm oil is grown and readily eliminate known sources of conflict palm oil.”

Rainforest Action Network blog, “How to Drive Change Through the Palm Oil Supply Chain,”posted 2.19.14.


Responsible sourcing of palm oil became a more feasible objective for companies when the world’s largest palm oil supplier, Wilmar International, pledged to end deforestation, peatland destruction, and exploitation in late 2013. Its largest competitor, Golden Agri-Resources, matched Wilmar’s commitment to zero deforestation in March 2014, meaning that between the two companies, over half of all palm oil production was covered—on paper, at least. Cargill pledged the same in April but has yet to release a timeframe for implementation. The Wilmar commitment alone will result in an estimated 1.5 gigatons in avoided greenhouse gas emissions by 2020—equivalent to the annual emissions of all of Latin America. Cargill and Archer Daniels Midland lag behind the new benchmarks set by these other suppliers.

Currently, the supply of certified palm oil well exceeds demand. “With the amount of [certified sustainable palm oil] available, there is absolutely no reason why any company shouldn’t be at 100%,” stated the World Wildlife Fund in a 2013 report.

Advocates are pressing companies that purchase
palm oil to take several measures:

  • Set a timeframe by which all palm oil will be RSPO-certified.
  • Establish traceable supply chains. Abuses can’t be rooted out by companies if they don’t know where their palm oil is coming from, where any abuses or ecologically harmful practices may be occurring.
  • Commit to buying palm oil only from suppliers who will not denude forests or peatlands to plant palm groves.
  • Buy only from suppliers who do not violate workers’ rights, seize lands illegally, or fail to respect indigenous peoples’ right to free, prior, and informed consent to development.
  • Set aggressive compliance timelines for the above.
  • Resist efforts underway to weaken progress that has been made. For example, some companies have been pushing to weaken the definition of “high-carbon-stock” forests to allow for more clear-cutting.

Working with other investors, in recent months Clean Yield filed resolutions at Pepsi and Smuckers and engaged in subsequent dialogue that resulted in both companies strengthening their palm oil procurement policies. In addition to updating its palm oil policy, Pepsi produced an overarching forestry policy to guide its purchase of farmed commodities (e.g., beef, timber, and soy) that can negatively impact the environment and forest dwellers. Clean Yield is in the process of determining which of the companies we invest in use palm oil in their products and what their policies are. Here’s what we’ve found so far:

Chipotle and McCormick do not use palm oil. Church & Dwight did not respond to our inquiries.

HainCelestial. The quality of HainCelestial’s palm oil policy is difficult to discern from its public reporting. The company committed to purchasing only RSPO-certified 100% by year-end 2013 and “continues to review our ingredients to assess their components which may be affected.” It took a little digging to find out that subsidiary Spectrum Organics sources its palm oil from Daabon, a family-owned Colombian firm that switched to organic practices in 1990. HainCelestial could not be reached in time to comment for this article.

Johnson & Johnson. In early May, Johnson & Johnson announced its intention to go beyond RSPO requirements and is partnering with The Forest Trust to set up sourcing systems to deliver fully traceable palm oil. JNJ’s palm oil supply chain is more challenging than most others due to its reliance on blended palm oil derivatives, whose origins are even more difficult to trace than palm oil itself. JNJ’s policy is among the best written we’ve seen, making a complex subject comprehensible to nonexpert readers.

Sysco. Sysco is a food distribution company with a private-brand label that encompasses 40,000 products. In 2013, it committed to using only 100% RSPO-certified palm oil in its private-label products by 2020. Sysco’s senior director of investor relations told us that the company is still in the early process of identifying the products in its inventory that use palm oil. An initial survey of their suppliers revealed that many are already sourcing certified palm oil.

UNFI is primarily a food distributor but has three food manufacturing divisions (Blue Marble Brands, Earth Origins Market, and Woodstock Farms Manufacturing). A company spokeswoman told Clean Yield that UNFI “is concerned about this issue” and, while it does not have a palm oil policy at this time, is in the process of researching the use of palm oil in its supply chain and developing a policy.

Whole Foods’ website tells us the company pledged to ensure that by 2012 its branded products are “not sourced from the conversion of rainforest ecosystems or from companies engaged in the conversion of natural forests and/or peatlands; respect the free, prior, and informed consent of interested communities; and meet or exceed RSPO principles and criteria.” Was that commitment met? And will the company modify its policy to insist that suppliers exceed RSPO standards? We didn’t hear back from Whole Foods by our print deadline. Watch for blog updates about their policy and others’ at


Sources: Donuts, Deodorant, Deforestation: Scoring America’s Top Brands on Their Palm Oil Commitments (Union of Concerned Scientists, March 2014); Palm Oil Buyers Scorecard: Measuring the Progress of Palm Oil Buyers (World Wildlife Fund, 2013); Conflict Palm Oil: How U.S. Snack Food Brands Are Contributing to Orangutan Extinction, Climate Change, and Human Rights Violations (Rainforest Action Network, 2013);


Additional reading

How Investors Are Changing the Palm Oil Supply Chain,” Green Century Capital Management.