Unilever and Ferrero palm oil pledges show ‘an industry in transformation’

13-Nov-2013 - Last updated on 13-Nov-2013 at 11:38 GMT

Unilever and Ferrero are among a number of companies pledging to go beyond RSPO standards

Unilever and Ferrero both said they would strengthen their commitments to sustainable palm oil this week – a sign of an industry in transformation, according to Catapult, an organisation working to end trade in commodities linked to deforestation.

Unilever, which buys about 3% of the world’s total palm oil supply, has said it will source 100% fully traceable palm oil by the end of next year, a step toward its goal to source only certified sustainable and fully traceable palm oil by 2020.

Global confectioner Ferrero, which uses about 150,000 tonnes of palm oil a year – about 10% the amount used by Unilever – said it was on track to a 100% traceable, segregated, RSPO-certified palm oil supply by the end of 2014, nearly a year ahead of its original schedule. It has also joined The Forest Trust (TFT), to help in its aim to prevent deforestation.

Executive director of Catapult, Glenn Hurowitz, said: “Taken together, today's announcements by consumer products giants Unilever and Ferrero show an industry in transformation.

"All along the palm oil supply chain, savvy companies that want access to the high-value, high-margin markets of Europe and North America are understanding that means ending dependence on deforestation-based sources. Sustainability is not just a notional good. There is an enormous opportunity for traders and growers who can outcompete by out-sustaining the competition.”

The announcements came at the same time as a meeting of the Roundtable on Sustainable Palm Oil (RSPO) in Indonesia this week, but go further than the basic requirements for membership.

"At this rate, the RSPO is in danger of being a lagging indicator,” said Hurowitz.

However, the RSPO has said it encourages companies to take their commitments beyond its Principles and Criteria, and that the standards are developed by consensus, meaning that compromise is inevitable.

Commenting on the Ferrero pledge, TFT director Bastien Sachet said: “What is very significant here is that this is Ferrero’s own Charter - it is clear about the values it wants for its products, and when companies fully own their policies, they don’t depend on anyone to make their vision and ambition become real. This encourages everyone around them to innovate and think about new ways to tackle the challenges of tomorrow.”

Chief procurement officer at Unilever, Marc Engel, said: "Market transformation can only happen if everyone involved takes responsibility and is held accountable for driving a sustainability agenda. Our progress has been made possible by the commitment and efforts of a number of our strategic suppliers.”