Palm oil firms failing to address deforestation across the supply chain

Palm oil is estimated to have been the cause of more than 5% of the deforestation to have taken place in tropical forests to date

ZSL’s annual SPOTT ranking of palm oil producers, processors and traders was published this week. The report found that just 39% of companies are reporting and demonstrating progress to assess suppliers, leaving 61% with “limited or no” public commitments to evaluate sustainability and deforestation risks.

The analysis also found that a little over half (58%) of companies have made a public zero-deforestation commitment that accounts for the supply chain. Just 12% have time-bound targets to ensure compliance across the supply chain.

Additionally, only 11 companies have programmes in place to address and support “high-risk” palm oil mills to help with compliance. In total, four of the assessed companies, Royal Industries Indonesia PT, Sazean Holdings, Groupe Blattner Elwyn and Atama Plantation Sarl scored 0% across all assessment criteria.

ZSL’s sustainable business specialist for Asia Eleanor Spencer said: “Palm oil can be a difficult topic due to unsustainable practices linked to the industry, such as deforestation, being some of the biggest contributors to habitat and biodiversity loss across the tropics – but it doesn’t have to be that way.

“As demand for palm oil continues to increase, ZSL is calling for the industry to provide stronger transparency on its assessment of and support for suppliers at all levels of the supply chain, to guarantee that they are complying with key social and environmental commitments – and legal requirements – needed to play their part in addressing the biodiversity and climate crises.

“Without transparent supplier evaluations and support, it’s impossible to know whether supply chains are avoiding environmentally damaging practices. Risk assessments are vital to improve sustainability in palm oil production and prevent greenwashing.”

Green group focus

Palm oil is estimated to have been the cause of more than 5% of the deforestation to have taken place in tropical forests to date.

Earlier this year, Friends of the Earth US sent a letter to businesses imploring them to immediately cease sourcing palm oil from Astra Agro Lestari (AAL), which produces the commodity in Indonesia.

Indonesia and Malaysia account for around 85% of the global palm oil supply. As demand for the commodity has risen so rapidly, land has been cleared and land use changed to make way for production. FMCG brands, along with animal feed producers and biofuel producers, are among the commodity’s primary buyers.

Friends of the Earth US, in partnership with Indonesian environmental advocacy group WALHI, published a report in March accusing AAL of illegal land-grabbing and deforestation. This is in spite of a zero deforestation commitment made back in 2015. Similar accusations have been leveled at AAL by Mighty Earth and Chain Reaction.