Palm oil is a major global commodity and one that has become a significant focus of attention in the retail sector in recent years. Given that palm oil is used as an ingredient in about half of the consumer goods sold in most supermarkets, retailers are in a prime position to exert pressure on stakeholders along the supply chain and demand that palm oil is produced sustainably and with due regard for human rights, biodiversity, and the environment.

Sainsbury’s store in UK © Alexander P Kapp

Sainsbury’s store in UK © Alexander P Kapp

How can retailers make an impact?

Retailers are the vital link between consumers and product supply chains. As such, they are in a unique position to influence both consumer behaviour at one end of the supply chain and production practices at the other.

Although retailers are under no legal obligation to source sustainable palm oil, many have made voluntary commitments to do so as part of their corporate social responsibility (CSR) strategy. Major retailers are now taking sustainable palm oil very seriously and are working to address supply chain issues, sometimes in partnership with non-governmental organisations (NGOs) to build the capacity to do so. Many retailers have made voluntary, time-bound commitments to sourcing 100% certified sustainable palm oil (CSPO) by 2015; some have already reached this target, while others are covering their palm oil usage with GreenPalm certificates as an interim measure while they work towards sourcing CSPO.

Here are some of the ways in which retailers can make a positive impact:

  • Becoming an active member of the Roundtable on Sustainable Palm Oil (RSPO) and making public, time-bound commitments to sourcing 100% RSPO-certified sustainable palm oil for own-brand products is a first step; however, achieving sustainability is a long and ongoing process.
  • Retailers must continue to drive improvements in standards to address issues such as greenhouse gas emissions, deforestation, and biodiversity conservation.
  • By actively and openly engaging with their suppliers and ensuring that suppliers are clearly informed of their policies and commitments in relation to sustainable palm oil, retailers can leverage upstream stakeholders in the supply chain to transform production and processing practices and work towards fully traceable, certified supply chains.
  • Consumers depend on retailers to make ethical procurement decisions and to enable them to make sustainable choices easily. Palm oil is often a ‘hidden’ ingredient in many foods, being listed simply as vegetable oil on product labels; however, explicit labelling of palm oil in ingredient lists is mandatory in some countries. Clear product labelling can help raise awareness of sustainable palm oil among consumers and help them to make informed, ethical choices, and on this basis the Roundtable on Sustainable Palm Oil (RSPO) has created an eco-label to highlight products that contain CSPO.

RSPO logo

What are the challenges for retailers?

The path to sustainability is not a straightforward one, and retailers are encountering many challenges along the way, both upstream and downstream in the supply chain.

Communicating a clear message on palm oil to consumers is vital, as is the need to overcome consumer perception that ‘sustainable’ automatically implies ‘more expensive’. A study based in Singapore found that shoppers were willing to pay 8.2–9.9% more for common palm oil-containing products that are deforestation-free.

Through a gradual process of customer education and targeted product placement, retailers can make sustainable living the norm rather than a lifestyle choice that can be perceived to be expensive and inaccessible by the average consumer. However, clear communication is key to making customers feel empowered and informed in their choices. They need to feel reassured that the retailer is authentic in its commitment to sustainability in all aspects of its business, and they need to perceive that sustainable choices mean added value and not added cost.

Retailers are also faced with the complexity and lack of transparency of the supply chain upstream, and many are struggling to map out sustainable supply chains for the many palm oil-derived ingredients that are commonly used in consumer goods in order to meet their time-bound targets and commitments.

Resources

This section provides a range of resources to inform retailers on the environmental and social impacts of palm oil production, broader sustainability issues, and how they can take an active role as stakeholders in the CSPO supply chain. It includes a diverse library of resources, including useful websites, NGO reports, articles and papers, as well as case studies that provide insights into the work that different organisations have done to date in addressing the complex issues surrounding palm oil, both through consumer campaigns and supply chain engagement. The case studies section includes contributions from Marks & Spencer, Walmart, and Sainsbury’s, addressing some of the challenges retailers face in meeting their commitments on sustainable palm oil.

 

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