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how are companies performing as a whole?

 

At the start of 2020 - the deadline year by which many companies pledged for their supply chains be deforestation-free, this Scorecard reveals that while some companies are making commendable progress on sustainable palm oil, others - including brands whose products we consume daily - are doing little or nothing or at all or.

Key Findings

key finding key finding

what sets the leaders apart from the laggards?

Whilst no company scored full marks, companies that deserve commendation include Ferrero, EDEKA, Kaufland, L'Oréal, and IKEA as the only companies to score 19 or more out of 22. These market leaders at the top of the Scorecard rankings have placed sustainable, deforestation-free palm oil at the top of their business agenda, by making and following through on public commitments to embed sustainable palm oil in their supply chains, as well as investing time and resources beyond their own supply chain to support a responsible industry.

At the other end of the scale, the Scorecard revealed a large number of companies that have done little or nothing at all to ensure the sustainability of their own supply chain or to promote sustainability within the palm oil industry.

 
 

HOW ARE COMPANIES PERFORMING ON FUNDAMENTAL ACTION AREAS?

Whilst the average score for scorecard respondents was 12.6 points out of 22, encouragingly companies were found to be taking actions on their own supply chain and beyond their own supply chain, developing the overall industry for sustainable palm oil. On average, companies who responded scored 9.3 out of 16 for own supply chain and 2.7 out of 6 for actions beyond their own supply chain.

Only three quarters of companies had a public commitment to source 100% RSPO CSPO; this is a basic commitment that all can take, to motivate producers to move towards sustainable methods of production. 2020 is a crunch year by which many have committed to be deforestation-free, yet disappointingly only two thirds of companies committed to this year as their deadline to be 100%.

Despite 10 years of asking companies to buy RSPO certified sustainable palm oil (CSPO), and whilst there has been commendable progress made by many, overall it is highly disappointing that many companies are still not 100% covered for all their purchases. In our review of 2018 purchasing data for this Scorecard, less than half of companies declared that 100% of palm oil purchases are RSPO CSPO. The lack of urgency to set a target date by 2020 is reflected by the modest uptake of RSPO CSPO. For instance, just 58% of the 9 million tonnes of palm oil declared cumulatively by the companies is certified.

Of the 173 companies assessed all but 32 are RSPO members. While this is a key indicator that the RSPO has been instrumental in getting the industry to be more open, 50 companies did not submit their Annual Communication of Progress (ACOP) report - a basic RSPO membership requirement - and are thus still lacking transparency in their efforts to progress towards 100% RSPO CSPO and support the wider vision of the RSPO and its members to “make sustainable palm oil the norm”.

The Scorecard also revealed that less than a third of companies are extending their influence over their supply chain by holding their suppliers accountable. Less than one third of assessed companies require a deforestation-free policy of their suppliers. Even fewer-14- required the policy to be conversion-free, protecting all natural ecosystems inclusive of forests. Only 50 out of 173 companies require traceability at least to the palm oil mill, and only 18 companies are tracing their palm oil from both mill and plantation.

Over a quarter of companies are undertaking investments in on-the-ground actions in palm oil producing landscapes, and over a quarter are involved in action-oriented platforms (besides RSPO membership alone) to support a responsible industry. It is encouraging that these companies are starting to take actions beyond their own supply chain to share responsibility for a sustainable industry, and an example that other companies can follow.

A worrying finding of the Scorecard is the lack of transparency of some companies. About a quarter of the companies we contacted did not even engage with us to provide information for the Scorecard. Formal public commitments and transparency creates accountability for companies and provides them with the impetus needed to examine their supply chains and put in place actions and policies that promote the sustainability of the palm oil industry as a whole. It also allows customers and other stakeholders to see how well companies are doing and to understand how quickly the industry is progressing.

Only 58% of the 9 million tonnes of palm oil declared cumulatively by the companies is certified, and only half of the companies committed to 100% RSPO CSPO by 2020 had achieved this in 2018. Over the past three Scorecards, the total reported volume that is RSPO CSPO for assessed companies has increased steadily from 29% (2013) to 39% (2016) to 58% (this Scorecard): an encouraging albeit slow uptake trend. Nevertheless, there needs to be a large concerted effort by companies if they are to achieve 100% RSPO CSPO in 2020.

how are companies progressing towards sourcing physical cspo?

But beyond this pessimistic story there are companies that are progressing well on the journey to sustainable palm oil.

Commendably, a total of 14 companies including Bahlsen and Migros have proven that it is possible to source 100% RSPO segregated (SG) CSPO for all their purchasing of crude and refined palm oil (CPO).

Our analysis of the scores also found that there was very little variation in average scores across large and small palm oil buyers. Companies purchasing less than a thousand tonnes of palm oil displayed average scores of 12, with Ayam Brand the highest ranking at 15.5 points. This is comparable to some of the largest palm oil purchasers, those buying greater than 1 million tonnes, who achieved average scores of 14, including Unilever the top scorer for the category with a score of 14.75.