Key Interview: “Sustainability is Here to Stay” - Palsgaard Talks Corporate Social Responsibility

03 July 2017 --- Danish-based sustainable emulsifiers manufacturer Palsgaard has released its 2016 CSR report, highlighting another year of continued progress towards the company’s 2020 sustainability targets. 

One of the key points is how during the year Palsgaard became the first in its industry to offer a full range of RSPO SG-certified emulsifiers. A major step was also taken towards the goal of worldwide CO2-neutral production by 2020, with 100 percent neutrality achieved at Palsgaard Mexican subsidiary.

The report has been prepared in accordance with the comprehensive principles in the Global Reporting Initiative’s G4 Sustainability Reporting Guidelines, and it comprises the company’s UN Global Compact Communication on Progress (COP).
 
Compared with 2015, and despite increased production volumes, total energy consumption fell 5 percent per kilogram of finished product, while CO2 emissions remained unchanged. 
 
In another important sustainability contribution, Palsgaard now offers 100 percent of its palm oil-based products as RSPO SG-certified.
 
Speaking with FoodIngredientsFirst, Lisa Drejer Mortensen, Senior CSR Specialist at Palsgaard, explains the challenges and successes of the company in terms of sustainability. 
 
“Palsgaard is a foundation owned company and we have the possibility to make long term investments, which gives us advantages. Another important fact is that Palsgaard has an extensive experience in corporate responsibility as the founder of the company Einar Viggo Schou implemented such values in the company more than a century ago – today’s term is CSR,” she says. 
 
“This has given us a very strong base for our strategic CSR work, which was incorporated in 2010. Our commitment to UN Global Compact, RSPO (Roundtable on Sustainable Palm Oil), Sedex and additional external commitments have helped us to follow and develop our sustainability agenda as well as affected our positive results. As a global company it is challenging to maintain the same high level of sustainability within our four focus areas (Corporate Governance, Energy & Environment, Products, Employees) where we are active worldwide but this is where our CSR strategy is of help.”
 
Drejer Mortensen explains how production of emulsifiers requires “heavy energy consumption” and palm oil is a key ingredient in Palsgaard’s emulsifiers. 
 
“The two areas are where we have most impact and this is the reason for our two main targets: CO2 neutrality by 2020 globally and to use RSPO SG certified palm oil in our products,” she adds.
 
Tradition of Caring
The strong results achieved in 2016 add momentum to the company’s 2017 celebration activities to mark 100 years since the modern emulsifier was invented by Palsgaard’s founder, Einar Viggo Schou. He particularly valued responsibility, community and the environment, long before ‘Corporate Social Responsibility’ became a widely known concept.
 
“In Denmark we started the journey ten years ago by installing a straw fired burner and using straw from our own fields for heating. Step by step we reached CO2 neutrality five years ahead, in 2015, by conducting a large number of energy reduction projects, changing to renewable energy sources and finally compensate remaining emissions by buying CO2 off-sets.”
 
Mexican Plant Achieves CO2-Neutrality
A key accomplishment for the year was the achievement of 100 percent CO2-neutrality at Palsgaard Mexico, following the Danish production plant’s attainment of neutrality in 2015. 
 
The achievement marks a significant step towards the company’s 2020 target of a worldwide zero carbon footprint, with Palsgaard’s Dutch and Malaysian production plants next in line.
 
“Mexico’s operation was CO2 neutral in 2016 and Palsgaard Netherlands will be in 2018,” Drejer Mortensen states. However, the factory in Malaysia is more challenging as the company wants to follow its policy and do what it can to be CO2 neutral first and then if necessary buy off-sets. 

“It is crucial for us to find reliable, energy intensive sources and at the same time taking local circumstances and infrastructure into consideration. We have on-going projects and expect to reach our goal by 2020,” she explains.
 
Speaking about the challenges associated with sourcing sustainable and certified palm oil, she adds: “From the beginning of our change to SG certified raw materials our biggest challenge was to find suppliers for SG palm based derivatives. The palm oil itself was available in the marked. All our SG certified raw materials have a premium and this is an investment when you have decided make the change to full sustainability, but the demand is still moderate.”
 
“Another challenge is the logistic part when you change to SG certified products. Implementation requires resources through the internal value chain from raw materials to documentation for our customers as per RSPO’s SCCS (Supply Chain Certification Standard).”
 
During 2016, Palsgaard continued to refine its procedures for responsible supply management, expanding the proportion of spend sourced from suppliers assessed under the company’s Responsible Sourcing Program from 80 percent to 85 percent, as part of its strategic CSR targets.

What can we expect from Palsgaard for the future? “Palsgaard plans to be CO2 neutral in 2020 and continue to implement energy reduction initiatives in its operations as well as ensuring responsible sourcing, the company will increase the use of SG certified palm oil and continue to increase ethical requirements to our suppliers,” Drejer Mortensen notes.
 
“In line with company growth we will initiate necessary CSR related actions in order to stay on top of sustainability and remain to be a responsible and reliable business partner. We have already looked deeply into the SDGs (Sustainable Development Goals) and state our support to the Goals in our 2016 CSR report. Further possibilities for supporting the Goals will be part of our future actions.”

“The company has its values deeply rooted in a socially, environmentally and responsibly behavior and as stated in our tagline – we are Heart Working People. Secondly, sustainability is here to stay and has become an integrated part of global business operations and by that also a competitive parameter,” she concludes. 

by Gaynor Selby