BY PENNY COATES
NON-EXECUTIVE DIRECTOR, SOLUTIONS FOR RETAIL BRANDS
While debate rages on the full impact of deforestation as a result of the production of palm oil, many organisations, including leading UK retailers, are making promises to eradicate this product completely, or have pledged to work with more sustainable sources and suppliers.
Here, Penny Coates, non-executive director at Solutions for Retail Brands (S4RB) and Trustee at Chester Zoo, explores the ongoing challenges faced by retailers and suppliers with regard to palm oil in the supply chain and provides advice on how to maximise transparency for potential customers.
There can be no doubt that consumers are becoming more concerned about how their spending impacts on the environment, a point which has been proven by the number of retailers making commitments to cut back on the use of palm oil or ensure the product is sourced in a sustainable fashion.
What is clear is that simply reducing the use of all types of palm oil will do little to stop the impact of deforestation in the main areas of production in Indonesia and Malaysia. These regions are a hotbed of agriculture, employing thousands of local workers, and whilst the demand for products such as palm oil, soy or cocoa remains, the environment is unfortunately likely to suffer due to mass production.
In fact, the use of sustainable palm oil in products, rather than a complete absence, is the best solution to the challenges of deforestation because it is an efficient crop, with high yields from a relatively small amount of land, compared to other oil products or livestock.
There’s no doubt, however, that the aim of achieving zero net deforestation by 2020 has been met incredibly positively by retailers and brands, but a major hurdle continues to be the lack of common regulations on the production of palm oil, as well as deforestation.
While there is no silver bullet to these complex problems, organisations such as the Roundtable on Sustainable Palm Oil (RSPO) is working to create a globally agreed definition that will also consider the needs of local populations. If agreed legislation can be achieved, this will limit the chances of each county having its own ambiguous regulations in these rural areas.
Further to this, it would enable environmental charities as well as businesses, to set a benchmark of more ambitious targets, working towards the same end goal of sustainably sourced produce whilst allowing nature to thrive.
Interestingly, the movement has begun in earnest in the UK with Chester City, together with Chester Zoo, currently leading a drive to create the first ever certified Sustainable Palm Oil City. The campaign involves working closely with schools, hospitality and leisure facilities, as well as retailers and manufacturers, to spread knowledge of the impact of unsustainable palm oil on the population of orangutans in Indonesia and Malaysia.
With increasing public awareness of the issue, retailers and brands must now also advance their own efforts to educate and influence consumers’ decision-making when it comes to buying products with sustainable palm oil. Initiatives in the UK such as the Red Tractor and the British Lion have successfully improved knowledge of food quality and safety standards, but add another campaign into the mix and there’s a real danger of overcomplicating product packaging and diluting key messages.
Supermarkets do, however, have an important role to play in the story of palm oil, and this starts with the demand of suitable sourcing on behalf of their customers. Simply put, retailers and suppliers have to agree on common principles for traceability and transparency that can be enforced throughout the supply chain. Only through effective long-term supplier engagement can retailers become the driving force of a shift towards sustainability on palm oil, meeting customer demands in the process.
UK retailers survey their suppliers annually to record the volume and usage of palm oil and its derivatives in their own brand products. Implementing an effective system to survey suppliers, via a tool such as S4RB’s Affinity platform makes the process much quicker and effective and provides the traceability that retailers require. Granted, this is a small step in a huge environmental issue, but it’s a certainly a start which will hopefully snowball over time.
As always, consumer demands will continue to be the biggest influence on supply chains in the food and drink sector so retailers will need to be quick to keep up with the rising demands for sustainable and ethically sourced products. It’ll be those who maintain close links with suppliers – providing transparency on the ingredients and the background to their products – that will be best placed to benefit from a more demanding customer base.
© FoodBev Media Ltd 2020