METHODOLOGY

Palm oil production continues to contribute to deforestation and conversion including in some of the most vitally important and biodiverse ecosystems on the planet.

In line with the Accountability Framework, WWF views certification programs and the Accountability Framework as complementary tools to define and implement ethical supply chains. Companies may purchase RSPO CSPO to fulfill key elements of the Accountability Framework. However, although all RSPO supply chain models make positive contributions to supporting sustainable palm oil production, the purchase of Mass Balance and Book & Claim credits on its own does not demonstrate that all materials in a company’s supply chain are deforestation- and conversion-free due to the presence of uncertified materials. Many companies that use certification also source non-certified materials. This may happen because certification is not available or widely used for a particular commodity or origin, or because some suppliers are early in their sustainability journey.

WWF therefore believes that companies should make a clear public commitment to halting conversion of all natural ecosystems, beyond deforestation only, alongside an ambitious timebound commitment to source 100% RSPO CSPO. This should cover both legal and illegal conversion, and include an explicit cutoff date after which conversion renders production areas non-compliant with the company’s commitment.

We are asking companies to commit to sourcing only palm oil that was produced without deforestation or conversion. In order to achieve full points, this commitment must meet the following criteria:

• Be publicly available, such as on a company’s website
• Specify that the commitment covers no conversion or severe degradation of all natural ecosystems
• Apply across the entire company/corporate group
• Apply to all palm oil types sourced, including crude & refined palm oil (CPO), palm kernel oil (PKO), palm oil derivatives (POD), and palm kernel expeller (PKE)

Please note that we are looking for commitments to zero gross conversion and we will not award points for zero net conversion policies.

For more detailed guidance on putting in place a robust no deforestation and no conversion policy, please see Core Principle 1 of the Accountability Framework.

Palm oil should be produced in a manner which treats workers fairly, respects the rights of local communities and indigenous people, and incentivises and empowers producers, including smallholder farmers, with the means to adopt more responsible production practices.

In line with the Accountability Framework, WWF views certification programs and the Accountability Framework as complementary tools to define and implement ethical supply chains. Companies may purchase RSPO CSPO to fulfill key elements of the Accountability Framework. However, although all RSPO supply chain models make positive contributions to supporting sustainable palm oil production, the purchase of Mass Balance and Book & Claim credits on its own does not demonstrate that all materials in a company’s supply chain are free from human rights issues due to the presence of uncertified materials. Many companies that use certification also source non-certified materials. This may happen because certification is not available or widely used for a particular commodity or origin, or because some suppliers are early in their sustainability journey.

WWF therefore believes that companies should make a clear public commitment to respect human rights of those who work in or are affected by commodity production supply chains, alongside an ambitious timebound commitment to source 100% RSPO CSPO.

We are asking companies to commit to only purchasing palm oil that was produced ethically and respects human rights. In order to achieve full points, this commitment must meet the following criteria:

• Be publicly available, such as on a company’s website
• Clearly outline the company’s commitment to uphold internationally recognised human rights, such as those outlined in the International Labour Organization (ILO) Conventions, UN Guiding Principles on Business and Human Rights and the UN Declaration on the Rights of Indigenous Peoples
• Apply to all people, regardless of gender and without discrimination
• Cover the following stakeholder groups: workers, indigenous people, local communities, and others who may be impacted by company activities
• Apply across the entire company/corporate group and all palm oil types sourced

For more detailed guidance on putting in place a robust human rights policy, please see Core Principle 2 of the Accountability Framework.

Shifting supply chains to physical supplies of CSPO is important because it brings greater transparency and reduces the environmental and social risks associated with sourcing palm oil. It also requires companies to work with their suppliers and build relationships that may extend beyond a company’s own supply chain. Segregated and Identity Preserved CSPO also allows brands to show that the palm oil they use in their products is from sustainable sources.

For CPO and PKO, WWF expects companies to be able to achieve physical supply chains, and preferably source RSPO Segregated (SG) and Identity Preserved (IP) models, and thus do not award points for Book & Claim (B&C) unless it is in support of independent smallholders (IS-credits) as the purchase of these credits helps to support smallholders who may be unable or may struggle to connect to physical supply chains. Mass Balance (MB) still contains conventional palm oil that comes from unknown sources, thus MB sourcing earns fewer points compared to SG & IP.

WWF also acknowledges that some types of palm oil (such as complex derivatives or volumes produced by independent smallholders) are more difficult to source from physical supplies of CSPO. This is one reason why there remains a need to have a B&C system. The latter is also valuable to ‘kick start’ transformation by making it easy and affordable for brands to support growers that are

WWF recognises that many companies with headquarters in Asia and Africa are at the start of the sustainability journey and operating in emergent sustainability markets, and that it can take time to shift physical supply chains to sustainable sources. We therefore award companies points for covering their palm oil sourcing with any RSPO supply chain model, including Book & Claim. This is the only question area for which a modification to the scoring system is made for these companies.

It is essential that companies implement their commitments to 100% RSPO CSPO for all geographies in which they operate, and the same is true for the group level (if applicable).

If companies are serious about ensuring supply chains are sustainable, then they need to require their suppliers to also be committed. This is particularly pertinent when supply chains are not 100% RSPO CSPO SG/IP for all types of palm oil purchased. This is also a measure that can be taken to extend influence and support for sustainable palm oil beyond a company’s own supply chain.

In this question, we are looking for companies to set expectations for their suppliers to only source palm oil that is free from deforestation and conversion, and respects human rights. This commitment should extend across the suppliers’ entire operations (beyond what is sourced directly to the company).

In line with our asks for company/corporate level commitments, the expectation for suppliers to have their own commitments should also meet the following criteria:

• Deforestation/Conversion Free Commitment
• Be publicly available, such as on a company’s website
• Specify that the commitment covers the conversion or severe degradation of all natural ecosystems
• Apply across the entire company/corporate group
• Apply to all palm oil types sourced, including crude & refined palm oil (CPO), palm kerneBusiness and Human Rights and the UN Declaration on the Rights of Indigenous Peoples
• Apply to all people, regardless of gender and without discrimination
• Cover the following stakeholder groups: workers, indigenous people, local communities, and others who may be impacted by company activities
• Apply across the entire company/corporate group and all palm oil types sourced

It is important for companies to put robust systems in place to monitor and respond to non-compliance with their sourcing policies, including their commitments to source palm oil that is free from deforestation and conversion and respects human rights. Robust monitoring systems can help companies identify, mitigate, and address non-compliances with their sourcing policies.

WWF recognises that monitoring for deforestation and human rights violations is complex and selecting the best systems is often company specific, depending on factors such as the range of commodities sourced by the company, the specific geography, and the company’s position in the supply chain. We also recognise that the development of robust monitoring systems is fairly recent and there is potential for rapid improvements in the coming months and years. For these reasons, and in alignment with AFi guidance, we ask companies to select or develop a monitoring system that best addresses their individual needs and risks profiles. For the purpose of this scorecard, we award full points to any company that can demonstrate they are actively monitoring for compliance with their commitments to source palm oil that is free from deforestation and conversion, and respects human rights.

For more information on how to select the best monitoring platform for your company, please see the guidance from the Accountability Framework.

It is important for companies to put robust systems in place to monitor and respond to non-compliance with their sourcing policies, including their commitments to source palm oil that is free from deforestation and conversion and respects human rights. Robust monitoring systems can help companies identify, mitigate, and address non-compliances with their sourcing policies.

WWF recognises that monitoring for deforestation and human rights violations is complex and selecting the best systems is often company specific, depending on factors such as the range of commodities sourced by the company, the specific geography, and the company’s position in the supply chain. We also recognise that the development of robust monitoring systems is fairly recent and there is potential for rapid improvements in the coming months and years. For these reasons, and in alignment with AFi guidance, we ask companies to select or develop a monitoring system that best addresses their individual needs and risks profiles. For the purpose of this scorecard, we award full points to any company that can demonstrate they are actively monitoring for compliance with their commitments to source palm oil that is free from deforestation and conversion, and respects human rights.

For more information on how to select the best monitoring platform for your company, please see the guidance from the Accountability Framework.

Commitments made by companies are typically aimed at mitigation of deforestation risk, rather than at the critical need for reducing deforestation. It is imperative that commitments are pro-environment, addressing past, current and potential future deforestation and conversion caused byperverse market signals. Commitments must also be pro-sustainable, removing barriers to broader market transformation, including the barriers that exist in production landscapes. It is for this reason that WWF has included questions in the Scorecard that reach beyond a company’s “own supply chain” and introduce a greater element of “shared responsibility” to this end.

Similarly, the Accountability Framework expects that “companies contribute to sector, landscape, and jurisdictional initiatives to foster collaboration towards addressing key social and environmental challenges” under Core Principle 10.

WWF expects companies that are serious about sustainable palm oil to join the RSPO and participate in other action-oriented sustainable palm oil platforms. These “platforms” need to go beyond just membership and commitments on paper and must require demonstrable action and implementation by participating companies beyond their own supply chains.

Acceptable groups include but are not limited to RSPO committees and working groups, the Palm Oil Innovation Group (POIG), the Palm Oil Transparency Coalition (POTC), the Palm Oil Collaboration Group (POCG), the High Carbon Stock Approach (HCSA), Action for Sustainable Derivatives (ASD), the Retailers Palm Oil Group (RPOG) and the Consumer Goods Forum Palm Oil Working Group and Forest Positive Coalition. Regional alliances and coalitions are also acceptable as long as they meet the above criteria.

Whilst the previous question looks for membership to action-oriented sustainability platforms working beyond individual supply chains, this question seeks to understand and support company investment in palm oil producing landscapes.

Points are awarded if a company is investing in one or more of the given actions, drawing on areas set out in the Accountability Framework and WWF’s Forest Solutions Platform:

Supporting smallholder producers
Smallholders play a critical role in the production of palm oil, producing some 40% of global production, and inclusion of these producers in ethical supply chains is essential to help support livelihoods in rural communities, increase agricultural productivity, avoid displacement of social and environmental impacts, and secure stable commodity supplies. However, inclusivity of smallholders in sustainable supply chains continues to be challenging, thus WWF recognises efforts by companies to this end. WWF recognises this separately in the Scorecard via Independent RSPO CSPO Smallholder credits, and under this question is looking for additional on-the-ground actions to support smallholder’s inclusivity that is linked to sustainability.

Biodiversity conservation and restoration
One of the key principles of sustainable palm oil production is restoration. In particular, landscapes and degraded ecosystems – including forests, peatlands, and existing plantations – are restored, and fragmented habitats and populations are reconnected by wildlife corridors, helping to enhance biodiversity conservation.
WWF defines forest restoration as the process of improving the health, productivity, and array of life of a forest. Much of the work of restoration focuses on bringing back natural processes that contribute to the forest’s productivity, like how water interacts with soil, streams, and plants. This requires starting with a diagnostic exercise to figure out what has gone awry, as the appropriate approach to forest restoration depends on what is causing a particular forest to falter. The damage is not always immediately apparent—a forest may look very healthy and green but be suffering ecologically.
The problem may be invasive species, infrastructure development, agriculture, mining, fire, or some other stressor.
Core elements of forest restoration include:

• Planting trees
• Improving soils
• Protecting wildlife corridors
• Managing land sustainably

Landscape and Jurisdictional Approaches
Landscape and jurisdictional approaches are providing greater scope than ever before for companies to remove barriers to sustainable production, support better environmental and social outcomes in landscapes producing palm oil, and to scale up compliance with the RSPO standard. A landscape/jurisdictional approach targets an ecological area (such as river catchments or ecoregion priority areas), culture (such as indigenous territories or cultural terroirs) and/or administrative units or jurisdictions (such as provinces, districts or states).

Jurisdictional approaches seek to align interests and coordinate actions among many different stakeholders, including governments, businesses, local communities, and NGOs in order to identify and work toward shared conservation, supply chain sustainability and green development goals. Similarly, landscape approaches utilise long-term collaboration among multiple stakeholders to combine conservation, development and human-well being goals and achieve sustainability at the landscape level.

Protection of rare threatened and endangered (RTE) wildlife species
The protection of rare, threatened, and endangered (RTE) wildlife species entails a range of conservation efforts aimed at safeguarding animal species that are at risk of extinction. These efforts are essential to maintain biodiversity and the health of ecosystems.
Examples of projects include discrete efforts supporting anti-poaching patrols, in situ wildlife conservation, community engagement to resolve human-wildlife conflict, setting up a wildlife corridor, training workers on ecological best management practices (BMPs), or support for no-use of hazardous pesticides.