AN AGENDA FOR ACTION

As we move into recovery from the COVID-19 pandemic, it is imperative that we address the underlying causes of the outbreak. These are part of a much larger systemic crisis, one in which our relationship with nature is pushing Earth’s ecological balance to the brink of collapse. From deforestation to biodiversity loss to global warming, unsustainable practices by parts of the palm oil industry have contributed to the planetary emergency we currently face.

With so much at stake, there is no more room for half measures. The findings of the 2021 scorecard are a stark reminder of the tremendous work that has yet to be done, and the urgency for palm oil buyers to redouble efforts to effect meaningful and long-lasting change. Despite commendable efforts by some leading companies to eliminate deforestation and conversion from their palm oil supply chains, slow action by much of the industry means that sustainability efforts drastically fall short of what is needed to counteract the ongoing damage to our world’s most vital natural ecosystems. Like many other sectors, the palm oil industry depends on nature; and yet natural ecosystems are being destroyed and degraded at a rate much faster than they can replenish themselves.

What our planet needs is bold and immediate transformative action by all palm oil buyers, at every level of the supply chain, and globally. While this is no small feat, the potential for swift and sustained progress across the entire palm oil industry is real. Although no company received full marks in this scorecard, a number of respondents have made momentous progress towards sustainable sourcing and sector-wide transformation in a short period of time; others are only a few steps away from becoming industry leaders who can deliver far-reaching changes. This should encourage all palm oil buyers, wherever they may be in their sustainability journey, to start this new decade of action for nature with a renewed sense of urgency and purpose.

Biodiversity loss is not inevitable, and WWF urges palm oil buyers to become agents of change for a nature positive world by 2030 by significantly improving their score in the next year. By tackling their own supply chain risks, acting as global citizens and contributing to solutions on the ground, palm oil buyers can not only turn the tide on unsustainable palm oil — but also help reverse nature loss and safeguard the future of humanity.

RECOMMENDATIONS

WHAT SHOULD COMPANIES DO?

All companies that use palm products (including derivatives) are responsible for helping to reduce the negative environmental and social impacts of palm oil production. For detailed guidance on establishing and implementing ethical palm oil supply chains — as well as ensuring adherence to the recommendations outlined below — WWF encourages companies to refer to the Accountability Framework.

We call on all palm buyers to:

Make and implement robust commitments

Adopt and implement group level corporate policies to only source palm oil that is verifiably free of deforestation and ecosystem conversion, and respects human rights.
Make a public time-bound commitment to buy only RSPO CSPO or implement other means to ensure the palm oil purchased is sustainable.
Ensure commitments and actions cover the entire corporate group, apply to all countries where the group operates, and cover all the types of palm oil used.

Purchase sustainable palm oil

Increase uptake of RSPO CSPO and CSPKO, including transitioning to physical supply chains with Segregated or Identity Preserved oil and supporting independent smallholders through the purchase of Independent
Smallholder Credits.Adopt differentiated targets for derivatives and PKEs that commensurate with the unique challenges to each of the palm oil types.
Devise strategy to address sustainability risks in the section of supply chain that cannot yet achieve 100% certified status.

Ensure supplier accountability

Source only from suppliers that also commit and implement policies to only purchase palm oil that is verifiably free of deforestation and ecosystem conversion, and respects human rights.
Understand their supply chain and require all suppliers to have traceability to the palm oil mill/plantation, to facilitate the monitoring and management of environmental and social risks.
Monitor their suppliers to ensure compliance with their sustainable palm oil commitments and policies.
Ensure transparency by reporting on palm oil sources and usage (including across regions and application sectors), as well as sustainability progress, non-compliances and actions at least annually.
Fully utilise available resources to buyers, including but not limited to toolkits developed by AFI, POCG’s NDPE IRF Working Group and ASD to generate critical momentum on these supplier engagement platforms.

Take part in sustainability platforms

Join the RSPO and actively contribute to their vision of making sustainable palm oil the norm.
Participate in action-oriented initiatives and collective advocacy. Businesses committed to sustainable palm oil can come together to push for the transformation of the palm oil market. Some examples include: the RSPO working groups and committees, the Consumer Goods Forum (CGF) Forest Positive Coalition, Palm Oil Transparency Coalition (POTC), the High Carbon Stock Approach (HCSA), the High Conservation Value Resource Network (HCVRN) and national or regional sustainable palm oil alliances.

Take on the ground action

Allocate resources and invest in palm oil producing landscapes including projects focused on:

1. The conservation and restoration of forests, other natural ecosystems and biodiversity at risk from, or impacted by, unsustainable palm oil production;
2. Smallholder productivity improvements through access to inputs, incentives, finance and capacity building;
3. Smallholder inclusion and sustainability through improved production practices such as regenerative agriculture;
4. Jurisdictional or landscape approaches in which the private sector collaborates with governments, local communities, and civil society toward shared conservation, supply chain sustainability, and green development goals.

Advocate for sustainable palm oil

Support national and subnational public policies in both producer and consumer countries aimed at mitigating deforestation and conversion, and enabling sustainable palm oil production that is protective of forests, natural ecosystems and human rights.
Undertake public communication and outreach on sustainable palm oil.
Raise consumer awareness of the importance of sustainable palm oil.

“Increase uptake of RSPO CSPO, including transitioning to physical supply chains with Segregated or Identity Preserved oil and supporting independent smallholders through the purchase of Independent Smallholder Credits.”

WHAT SHOULD POLICYMAKERS DO ?

Policymakers play a critical role in promoting deforestation- and conversion-free agricultural commodity supply chains globally, through enacting strong legislation in both consumer and producer countries that level the playing field and hold all stakeholders to the same standards.

We call on policymakers in producer countries to:

Adopt and enforce binding legislation, policies and incentives that will enable and require agricultural commodities to be produced more sustainably, including requirements to halt deforestation, ecosystem conversion and human rights risks, and to increase traceability and transparency of supply chains.

Develop and provide access to financial and technical incentives for producers to adopt sustainable production practices, avoid conversion of natural ecosystems, and expand production through the sustainable intensification and rehabilitation of degraded land.

Support and promote public-private partnerships aimed at ending deforestation and ecosystem conversion and related infringement on human rights in commodity supply chains.

Advocate for and accelerate delivery of commodities free of deforestation, conversion, and human rights abuse, as one element to implement the Paris Agreement on climate change, the Sustainable Development Goals, and the Convention on Biological Diversity.

Work together with the industry to forge national alliances, country-level initiatives and landscape/jurisdictional approaches towards sustainable commodities that prevent deforestation, ecosystem conversion and human rights abuse, and support integrated land-use planning.

Promote and implement policies for conversion-free, nature-based development pathways in high-risk regions. This can include promoting long-term conservation and restoration through sustainable, fair and participative economic use of forests and other natural ecosystems and strengthening traditional land uses and land rights.

Promote and implement policies to reduce GHG emissions in the production of agricultural commodities in an effort to limit global warming to below 1.5°c in line with the IPCC recommendations.

We call on policymakers in consumer countries to:

Adopt and enforce binding legislation, policies and incentives to ensure that agricultural commodities and derived products that are associated with deforestation, conversion or human rights risks do not enter their markets. These policies should apply to both companies and financial institutions.

Develop and implement clear traceability and transparency requirements along the supply chain and a robust mandatory due diligence obligation applying to companies that trade, use and finance agricultural commodities (including first importers) to assess and minimise the risk of their products and commodities being linked to the conversion or degradation of forests and other ecosystems and/or to human rights abuse.

Engage in dialogue and cooperate with producer countries to support the development and implementation of financial and technical solutions including all stakeholders to support conversion-free nature-based development pathways. This may include land-use planning, support for smallholders, support for land tenure reform, and actions within the country to facilitate the transition towards more sustainable food and farming systems that provide alternative or complementary development pathways.

Establish public procurement policies that require deforestation- and conversion-free commodities.

Advocate for and accelerate delivery of commodities that are free of deforestation, conversion, and human rights abuse, following and building upon the European Union’s work on deforestation-free supply chains, the Amsterdam Declarations, the New York Declaration on Forests and national commitments for sustainable supply chains.

Engage in consumer-consumer country cooperatio to support producer regions in transitioning to sustainable production and avoid leakage of unsustainable products.

Adopt policies and incentives to reduce harmful consumption and waste.

“Establish public procurement policies that require deforestation- and conversion-free commodities.”

WHAT SHOULD THE FINANCE SECTOR DO?

Financial institutions have a key role to play in ensuring that the palm oil supply chains linked to their investments, clients and portfolios are ethical. Financial institutions should use the Palm Oil Buyers Scorecard to identify and review any risk of deforestation, conversion and human rights abuse represented by the buyers assessed in their portfolio, and use the methodology to engage buyers not covered in this scorecard.

We further call on financial institutions to:

Participate in action-oriented initiatives and advocacy

Join the RSPO and actively contribute to their vision of making sustainable palm oil the norm.
Implement the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD) and commit to setting Science-Based Targets for decarbonization across their portfolios. Endorse and support the development of the Taskforce on Nature-related Financial Disclosures (TNFD).
Investors become a PRI signatory and participate actively in the PRI Investor Working Group on Sustainable Commodities (which covers palm oil) and in the PRI Sustainable Commodities Practitioners' Group.
Banks become a supporter of the Principles for Responsible Banking (PRB) and follow its guidance on Biodiversity Target-setting.
Invest in on the ground projects and/or financial products that incentivise and support a sustainable palm oil industry.

Develop sector policies and raise expectations towards clients and investee companies (including banks)

Adopt and disclose clear and time-bound deforestation-free, conversion-free, and human rights commitments that require all clients and investee companies (including banks) operating across palm oil supply chains to comply with WWF’s minimum expectations listed under the ‘What should companies do?’ section of this report. These policies and commitments should be aligned with the RSPO and the Accountability Framework.
Assess deforestation, conversion and human rights risks in their portfolio and engage all investee companies to mainstream palm oil supply chains that are free of deforestation and conversion, and respect human rights.
Engage with clients and investee companies that do not fulfill these expectations and support them to develop and implement ambitious time-bound actions plans for meeting these expectations. Engagement is supported by clear and public escalation and non-compliance strategies when time-bound actions are not met.
Develop individual or pre-competitive investment/portfolio disclosure frameworks that encourage deforestation- and conversion-free palm oil supply chains that respect human rights (e.g. Reporting using the OECD, Accountability Framework and other guidelines).
Design and offer financial products to incentivise and enable palm oil production, sourcing and trade that is deforestation- and conversion-free and protects human rights.
Design and offer financial products which incentivise and enable palm oil production, sourcing and trade practices that protect forests, natural ecosystems and human rights, and support smallholder inclusion and sustainability.

Increase transparency

Disclose processes for monitoring and verifying clients' and investee companies' progress and compliance with time-bound action plans.
Disclose progress made on engaging with clients and investee companies, the percentage of companies with operations covered by 100% RSPO CSPO commitments and traceability action plans, as well as their progress towards achieving these.
Disclose steps taken in cases of non-compliance, including the number and name of palm oil companies excluded from lending and investment portfolios due to a lack of progress on time-bound action plans.
Investors disclose proxy voting policies for key environmental and social risks related to the palm oil sector, as well as voting outcomes and rationale on resolutions pertaining to these risks.

“Assess deforestation, conversion and human rights risks in their portfolio and engage all invested companies to mainstream palm oil supply chains that are free of deforestation and conversion, and respect human rights.”

WHAT SHOULD CONSUMERS DO?

Consumers have a key role to play in pushing the palm oil industry towards sustainability, as brands really care about what their customers think. While consumer awareness of the negative impacts associated with irresponsible palm oil production is growing in both consumer and producer countries, several challenges continue to inhibit widespread demand for sustainable palm oil. Among them is the fact that palm oil continues to be a ‘hidden ingredient’ in many products, along with the rise of anti-palm oil sentiments in certain markets. This underlines the urgent need for brands to educate consumers on sustainable palm oil and its importance to create real positive change for nature and people.

We call on consumers to:

Explore the contextual information provided in the scorecard, WWF’s educational videos and the interactive website to familiarise themselves with the key issues and challenges characterising palm oil production, as well the path forward.

Use the scorecard to see how well their favourite supermarkets, manufacturers and hospitality companies are doing on sustainable palm oil and make responsible consumption and purchasing decisions based on the information provided.

Become sustainability ambassadors by sharing the scorecard results on social media and with their networks. They can also use social media to raise public awareness of the importance of sustainable palm oil and ask brands about their sourcing practices.

Become advocates by demonstrating support for initiatives aimed at influencing public policy and market supply for sustainable palm oil.

Understand the potentially worse outcomes of supporting the boycott movement. Palm-oil free does not equate to a product being deforestation free- depending on whether any of the ingredients have a forest footprint.

Choose certified sustainable palm oil, that way companies can actually go beyond doing no harm- they can actively, purposefully contribute to the solution, breaking the link between palm oil and deforestation, driving the industry in the right direction.