Dan Strechay is the U.S. representative for outreach and engagement at Roundtable on Sustainable Palm Oil, a position he has held since July 2016. Prior to RSPO, he was the senior manager for sustainability communications at PepsiCo where he worked on the implementation and communication of the “Performance with Purpose” vision and supported the Office of Sustainability, Procurement, Public Policy and Government Affairs teams. For more information about supporting RSPO's journey toward making sustainable palm oil the norm, visit RSPO.org.
When an ingredient like palm oil is used so abundantly that it appears in nearly half of all packaged goods sold in the supermarket, CPG and private label sustainability officers, retail leaders and consumers alike might consider the phrase “sustainable palm oil” an oxymoron. Can we envision a future with a responsible sourcing approach for the most widely used vegetable oil in the world when it has such a complicated global supply chain? It’s possible, but collaboration and transparency will be the keys to success.
Many pressing issues — from deforestation to poor working conditions — continue to plague the industry. Companies have repeatedly been called upon to improve their business practices and strengthen their own supply chains. While these issues are problematic and must be addressed, a reality remains often unnoticed: Sustainable palm oil is on the rise and there is so much more we can do to make it the norm for suppliers and purchasers. With the holiday season upon us — and since palm oil is likely to be a key ingredient on the shelves of stores or home pantries — here’s what you need to know about palm oil and the efforts in progress to make it sustainable.
As the world’s most widely used oil, it is critical palm oil is sustainably sourced. Because most CPG companies and private label manufacturers use palm oil, they’re well positioned to have a voice in ensuring suppliers who farm and produce the essential ingredient are doing so in a way that respects both the environment and the people and communities that grow it. Roundtable on Sustainable Palm Oil (RSPO) Certified Sustainable Palm Oil (CSPO) — the only process bringing together companies, experts, academics and NGOs to build consensus on what it means to sustainably produce palm oil — is an important mechanism for ensuring any product using the ingredient is following globally recognized standards. Brands from Hershey’s and Mars to Colgate and Kellogg have committed to working toward the use of 100% CSPO in their products. That is significant. Collectively, these brands are driving positive changes in communities across Indonesia and Malaysia, continuing to support economic development in those countries, and all the while delivering the same quality products consumers have come to know and love.
For decades, finding a sustainable, quality, real-world solution has been top-of-mind for businesses and environmentalists alike. The RSPO was established in 2004 to promote the production and use of sustainable palm oil. In the years since, we have sought to collaborate and build transparency toward 100% sustainable palm oil alongside players from all sectors of the cycle, including producers, purchasers, NGOs and governments.
Yet challenges remain. Unsustainable practices continue to lead to further destruction of virgin rainforests and ecosystems, causing greenhouse gas emissions to rise and putting many species at risk of extinction. Over the years, significant gains have been made via the Principles and Criteria (P&C) review period, when members and stakeholders have the opportunity to make suggestions and comments toward consistent collaboration and transparency of the RSPO sustainable palm oil standard. During the last review period, significant changes were made, including new criteria requiring growers to minimize greenhouse gas emissions, promotion of ethical business practices and a new policy on human rights and forced labor.
While the effort underway by companies working toward achieving CSPO is a great step forward, there is undoubtedly more to be done. Today, about one-fifth of palm oil produced globally is certified sustainable. How can we move the needle closer to 100%? Retailers have an important role to play in widespread adoption of CSPO, as they can help move their private label manufacturers and CPG companies in the direction of sustainable purchasing. Many supermarkets and other retailers have their own sustainable sourcing policies, offering guidance to suppliers on everything from human rights to the environmental impacts of the products sold on their shelves.
The inherent risks in the palm oil supply chain — like greenhouse gas emissions due to deforestation and the displacement of indigenous communities — matter to retailers and their consumers. If suppliers aren’t committed to CSPO, there’s a good chance retail supply chains are vulnerable to significant risks and are in violation of retailers’ sustainable sourcing policies. Retailers including Walmart, Target, CVS and Costco are RSPO members and are working on the implementation of policies around palm oil sourcing to help promote widespread CSPO adoption.
Changes like these should be top-of-mind for corporate CPGs and retailers alike because today’s consumer is a conscious one. Recent research found 87% of consumers will purchase a product because a company advocated for an issue they cared about, and 76% will refuse to purchase a company’s products or services upon learning they supported an issue contrary to their beliefs.
No longer can companies rely on the quality of their products to maintain consumer loyalty. We all play a role in ensuring our products are made sustainably, with the earth and its people in mind. Moving toward 100% CSPO aligns with that responsibility.