Palm oil has become a demonized ingredient in the sustainability blanket, despite technically being responsible for 1% of deforestation, according to a 2018 report. By comparison, beef and soy production are lagging behind. source of more than two-thirds of habitat loss in Brazil. Between 2001 and 2015, cattle drove the deforestation of 111 million acres, four times that of palm oil over the same period. And according to experts such as Chris Sayner – vice president of sustainability at Croda International, a chemicals company that supplies ingredients to major personal care brands including L’Oreal and Unilever – the alternatives, coconut and soybean oil, produce lower yields and therefore are less efficient uses of land and resources.
“That’s why NGOs support the palm,” Sayner said. “Because walking away from the palm would send you to coconut or soy or a mixture of different oils, all of which would require more land and make the problem worse. None of them say to walk away of the palm.”
But deforestation linked to palm oil cultivation is still a big problem for high-producing countries such as Malaysia and Indonesia. Palm oil is an integral part of half of all supermarket products, according to Rainforest Rescue, and 70% of every shampoo, conditioner, soap, toothpaste, perfume and other personal care or beauty products. It is an emulsifier which suspends the active principles. Sayner called it “the workhorse ingredient”.
To make palm oil cultivation more sustainable, supply chain transparency is essential. That’s the mission of Action for Sustainable Derivatives (ASD), a collaborative initiative of BSR, which has brought together 23 of the world’s leading personal care companies, including Croda, Chanel, Estée Lauder and L’Oréal, to engage their suppliers and create a map of palm trees. oil supply chains.
Last year was the collaboration’s third year of operation, and its 2021 report outlined supply chains for 825,000 tonnes of palm-based materials, 230 suppliers and distributors, including mills, plantations and refineries. . According to the report, of the refineries and plants it asked for information, between 85 and 90 percent reported transparency measures to ASD.
“Transparency or visibility of production in a supply chain is a tool, not an end goal,” said Edwina McKechnie, associate director of BSR, the parent organization behind ASD. “There are unique challenges for palm, mainly due to a very fragmented and complex supply chain.”
As a collaborative initiative, we enable vendors to better meet the different demands of different end users by making it one complete and unique request.
McKechnie described four to 10 links in the supply chain from a palm plantation to the consumer, including mills, refineries and crushers. And according to Sayner, palm oil sometimes goes through double-digit transformations before it gets to the shampoo bottle. ASD brings together producers of consumer products using palm oil to help everyone in the supply chain navigate the complicated, opaque and independent businesses downstream. The aim is for consumer brands to better understand who is in their supply chain and for ASD to be able to investigate and report on sustainability and the practices taking place in those chains.
“Vendors are getting similar requests [on sustainability], but they’re not streamlined,” said BSR manager Ricki Berkenfeld. “By being a collaborative initiative, we enable vendors to better respond to different end-user demands by making it one complete and unique request.
And of course, by bringing all these groups together, personal care brands have a greater influence on the supply chain than if one company were acting alone.
“If we were all trying to do this work individually, that’s a massive effort,” Sayner said. “At Croda, we source over 300 palm-based raw materials from over 100 suppliers at our 14 factories around the world. It’s so complex, and our customers, like L’Oréal and Estée Lauder, buy hundreds and hundreds of these ingredients from different suppliers.”
Basically, it quickly becomes unwieldy, and ASD eases some of that burden on consumer companies.
To do this, ASD uses its Sustainable Palm Index (SPI), an assessment dashboard closely aligned with the guidelines of the Roundtable on Sustainable Palm Oil (RSPO) – a common commitment made by many users and palm oil suppliers that addresses sustainable sourcing, human rights issues and deforestation in the palm oil supply chain. The index questionnaire asks questions such as “Who is the manufacturer and distributor?” » ; “What type of palm oil?” (There are two: one from the fruit and one from the stone); “What is Purity?”; “What percentage of your supply chain has a non-deforestation commitment?” ; “What percentage has been verified?” »
ASD then uses this information to create supply chain maps with risk assessments based on location and the companies involved in the process.
“We check the methodologies,” explains Arnaud Bonisoli, project manager at Transitions, a sustainable development consulting agency, which works on the management of the ASD program. “What kind of commitment do they have? What kind of practices? What kind of transparency? What kind of grievances are linked? What kind of resolution to those grievances do they have?”
ASD collects this information and distributes it to its members. The information can help buyers understand if a supplier has had issues with deforestation or human rights abuses. Grievances can be investigated and then acted upon. But ASD must also be concerned about confidentiality. According to Bonisoli, the personal care and additives industry is very privacy-conscious. Recipes for perfumes from Chanel or Aveeno’s skincare line are copyrighted, and if a competitor learns where those brands source their ingredients, it’s possible to reverse engineer a similar product.
“We act according to the principle of the black box,” said Bonisoli. “Any information we collect, we only share in aggregate form.”
ASD also cannot tell its members which suppliers to buy from and which to avoid for antitrust reasons. ASD simply provides brands with as much supplier information as possible and allows them to make independent internal decisions about which suppliers they buy from. But ASD and its members always feel stronger as a unit.
“Our overall palm consumption among members is heading towards one million tonnes,” Sayner said. “We have a certain clout here. We have a voice in the industry. We can’t make a lot of noise as individual companies, but together we try to do good things in the palm supply chain. .”
