Palm oil: “Step up efforts to fight deforestation,” says CDP research

28 Oct 2020 --- Unless more is done to fulfill net zero deforestation targets, many in the consumer goods sector are unlikely to meet their goals, according to CDP’s new Investor Research report “Zeroing-in on Deforestation.”

Commodity producers in the supply chain, including stakeholders in the palm oil industry, need to rapidly improve their management of deforestation risks and opportunities, says the environmental non-profit organization. 

The report, which follows on from CDP’s 2019 Investor Research on Consumer Goods companies and deforestation, ranks 29 of the largest and highest impact palm oil, timber, soy and cattle traders and producers on how they are managing deforestation risk and opportunities within their supply chains.

Deforestation: A growing concern
It finds that companies in four Forest Risk Commodities (FRC) sectors – cattle, soy, palm oil and timber, responsible for 80 percent of deforestation globally – are not employing practices to prevent ongoing deforestation. 

The report highlights the importance of holding companies to account against third-party sustainability standards within the palm oil and timber sectors.

Of the companies covered in this report, 47 percent of land managed for the cultivation of palm oil can claim to meet deforestation standards. However, certification alone is not enough. Companies must combine this with other initiatives, such as providing education and financing to promote sustainable agriculture and demonstrating firm policy commitments to end deforestation.

Palm oil companies appear to be making incremental improvements to their practices, with 50 percent now engaging in multi-stakeholder partnerships to tackle illegal deforestation.

Sustainable palm oil certification
Some have also delivered against the Roundtable on Sustainable Palm Oil’s rigorous standards in recent years. However, the CDP says that they too, could be doing more.

“The companies assessed in this report are key suppliers to the Consumer Goods sector covered in our previous report. What is clear from this research is that if FMCGs rely on this part of the supply chain to meet their net-zero deforestation ambitions – a lot more work needs to be done. Bold and urgent action from these producers is the critical first step in tackling deforestation throughout the supply chain,” says Carole Ferguson, Head of Investor Research, CDP.

Palm oil companies appear to be making incremental improvements to their practices.Sustainability pledges
Consumer goods giant Unilever recently unveiled a new set of sustainability commitments, including to end its contribution to deforestation, amongst other pledges. 

The company has also teamed up with US-based tech company Orbital Insight to boost palm oil sourcing transparency. The collaboration is piloting technology that uses geolocation data to help identify and map the individual farms and plantations that are most likely to be supplying the palm oil mills in Unilever’s extended supply chain.

Meanwhile, the Consumer Goods Forum – representing the world’s largest Consumer Packaged Goods brands – recently announced a fresh push to tackle deforestation with its Forest Positive Coalition of Action. 

This push by some of the world’s most influential FMCG companies underlines immediate action's importance across the broader supply chain.

Edited by Gaynor Selby