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HOW WERE THE COMPANIES ASSESSED?

 

The Scorecard assesses 173 companies on the commitments they have made, and the actions they have taken, to:

  • ensure that there is no destruction of nature including no deforestation (“conversion-free”) along their supply chains and
  • support a responsible and sustainable palm oil industry beyond their own supply chain.

Whilst this Scorecard has focused on a snapshot of companies headquartered around the world, all companies that use palm oil-based products have a responsibility and a role to play in helping to make the industry sustainable. We outline some key actions below. These include actions such as joining the RSPO and action-oriented industry sustainability platforms; sourcing RSPO Certified Sustainable Palm Oil (CSPO); taking responsibility for sustainability at the group level and for all global operations; committing suppliers to having deforestation- and conversion-free policies and a supply chain that is traceable to known source; and investing in sustainability actions on-the-ground in palm oil producing landscapes.

The Scorecard includes companies headquartered in Asian markets – namely Indonesia, Malaysia and Singapore - which are considered to be emergent sustainability markets where demand and action on sustainability has to-date been very low. In order to support “first movers”, the scoring system made allowances for the transition to a physical supply chain model by awarding points for any supply chain model including RSPO Book and Claim "credits".

The list of questions we have used in this Scorecard is inclusive but not exhaustive, with a focus on deforestation- and conversion-free. Further guidance on commitments and actions can be found in the Accountability Framework. With no company scoring full marks, there is room for improvement for all in 2020.

Who was assessed in this scorecard?

30
companies assessed
in North America
118
companies assessed
in Europe
25
companies assessed
in Asia & Australia

Number of companies assessed in all sectors

173 companies

Number of companies assessed in Retailer

54 companies

Number of companies assessed in Manufacturer

108 companies

Number of companies assessed in Food Service

11 companies

WHAT DATA DID WE COLLECT?

Companies were assessed using data collected by the RSPO, submitted by its member companies through its 2019 “Annual Communication of Progress” (ACOP) process that covers CSPO purchases made in calendar year 2018. A questionnaire was pre-populated with information from the RSPO ACOP (where available), RSPO membership records and company websites, and sent to all companies.

WHAT WERE THE SCORING CRITERIA?

All 173 companies were scored out of a possible total of 22 points, based on the performance indicators below. The first 16 points relate to actions the company has taken in relation to its own supply chain, the remaining six points relate to actions that support sustainable palm oil beyond the company’s own supply chain.

OWN SUPPLY CHAIN (16 points)

Commitments to buying RSPO certified sustainable palm oil (CSPO) – Purchasing RSPO CSPO is the simplest action a company can take towards cleaning its own supply chain and incentivising more sustainable production. There is still not enough demand to meet the supply of CSPO. Companies should be 100% RSPO certified for all palm oil purchased and for the entire group (inclusive of subsidiaries, affiliates, joint ventures and majority holdings).

0.5 point for making a public commitment to buy only CSPO,
0.5 points for making a commitment to achieve this by 2020 or earlier
[1 point in total]


0.25 points if commitment covers each type of palm oil:
(a) Crude and refined palm oil (CPO)
(b) Palm kernel oil (PKO)
(c) Palm kernel expeller (PKE)
(d) Palm oil derivatives (POD)
[1 point in total] (if only 1-3 of these 4 categories are applicable the score is weighted)


1 point if commitment applies to all countries in which a company operates, or (if applicable) to the entire corporate group

How much CSPO companies actually use for each type of palm oil (CPO, PKO, POD) – Shifting supply chains to physical supplies of CSPO brings greater transparency to that supply chain and it requires companies along the supply chain to build a relationship with suppliers. Segregated and Identity Preserved CSPO also allows brands to show that the palm oil they use in their products is from sustainable sources. Therefore physical supply chain models are awarded more points than Book and Claim, with an exception for purchasing Independent Smallholder credits to support smallholders who may be unable or may struggle to connect to physical supply chains, and for companies headquartered in Asia where markets for sustainability are less mature.

Some types of palm oil (such as complex derivatives or palm oil produced by independent smallholders) are more difficult to source from physical supplies of CSPO. This is a reason why there remains a need to have a Book & Claim system. The Book & Claim system is also valuable to ‘kick start’ transformation by making it easy and cheap for brands to support growers that are RSPO certified. For derivatives (POD), we therefore use a scoring system that is more lenient towards Mass Balance and more inclusive of Book & Claim.

Total is calculated by:
Total supply chain model score * (3 types of palm / number of palm oil types used)
+1 bonus point for 100% RSPO CSPO coverage of all palm oil, if applicable
-1 transparency penalty point for reporting percentages and not volumes, if applicable

For crude and refined palm oil (CPO) and palm kernel oil (PKO):


Segregated (SG) oil + Identity Preserved (IP) oil + Independent Smallholder credits
1 point for >0-24.9%
2 points for 25-74.9%
2.5 points for 75-99.9%
3 points for 100%


Mass Balance (MB) oil
0.25 point for >0-49.9%
0.5 point for 50-99.9%
1.5 points for 100%


Book and Claim (credits)
No point

For palm oil derivatives (POD):


Segregated (SG) oil + Identity Preserved (IP) oil + Independent Smallholder credits
1 point for >0-24.9%
2 points for 25-74.9%
2.5 points for 75-99.9%
3 points for 100%


Mass Balance (MB) oil
0.25 points for >0-49.9%
0.5 points for 50-99.9%
1.75 points for 100%


Book and Claim (credits)
0 point for >0-49.9%
0.25 points for 50-99.9%
1.25 points for 100%

For companies headquartered in Asia, irrespective of supply chain model:


1 point for >0-24.9%
2 points for 25-74.9%
2.5 points for 75-99.9%
3 points for 100%

For all companies:


+1 point if 100% of all purchased palm oil is certified, by whatever supply chain system
-1 point if the company only reported percentages and not quantities


Scope to which the quantities of CSPO relate to - Multi-national companies and groups have an obligation to ensure that they act on their sustainability commitments wherever they use palm oil

0 points if only some of the countries in which a company or (if applicable) group operates
0.5 point if a group exists but the scope only relates to all countries in which the company operates
1 point if the scope relates to all countries in which the group operates (or company, if company is not part of a group)

Whether or not suppliers are expected to have a no deforestation, no conversion commitment - Companies serious about ensuring supply chain sustainability must extend their commitments to their suppliers. In so doing, they also build greater influence for sustainability over their own supply chain and beyond.

0.5 points if supplier commitment is deforestation-free but does not meet the Accountability Framework definition for conversion*-free
1 point if ‘Yes’

*Conversion is a change of a natural ecosystem to another land use or profound change in a natural ecosystem’s species composition, structure, or function. Deforestation is one form of conversion (the conversion of natural forests).

Whether or not suppliers are required to purchase only palm oil that is traceable - Whilst traceability alone does not guarantee sustainability, by understanding their own supply chain companies can confirm whether it is sustainable and/or provide influence and support to this end, and can extend support for sustainability beyond their own supply chain.

1 point if suppliers are required to be traceable to mills or plantations

BEYOND OWN SUPPLY CHAIN (6 points)

Membership of action-oriented sustainable palm oil platforms - These “platforms” need to be complementary to the RSPO and go beyond just membership and commitments for a company's own supply chain, by requiring company participation with demonstrable action intended to reach beyond their own supply chains to support a responsible, sustainable palm oil industry.

1 point for being an RSPO member


1 point for being a member of the POIG or other* action-oriented sustainable palm oil platforms

For example: Acceptable groups include, but are not limited to, RSPO committees and working groups, the Palm Oil Transparency Coalition (POTC), and the High Carbon Stock Approach (HCSA).

On-the-ground investment in palm oil producing landscapes with pro-sustainability measures - Companies should move their commitments beyond mitigation of deforestation and sustainability risk, to an approach that addresses past, current and potential future deforestation and conversion caused by perverse market signals, and promotes sustainable production.

4 points 4 points for any of the following:

  1. a.supporting smallholder producers
  2. b.protecting and restoring forests
  3. c.supporting landscape/jurisdiction approaches
  4. d.conservation projects

HOW ACCURATE IS THE DATA WE COLLECTED?

We asked all the companies to complete a simple questionnaire. As in previous scorecards, we used information that companies provided directly to us, on their websites or in their annual reports to RSPO. We have verified this information where possible, but have relied on the companies to be transparent, truthful and accurate in their reporting. WWF urges users of the Scorecard to check the data and share any errors found with both WWF and the relevant company.