KUALA LUMPUR (Reuters) – Palm oil companies, which have faced criticism in recent years of widespread deforestation, said on Monday that ensuring sustainability across the supply chain was the new business norm as scrutiny on responsibly produced palm oil mounts.
In an online conference, plantation companies with estates in top producers Indonesia and Malaysia said supply chain traceability, and policies surrounding no deforestation, no planting on peatland and no exploitation were now a standard requirement from major global buyers such as Nestlé and Unilever.
“Sustainability is the new business as usual,” said Perpetua George, Wilmar International’s Group Sustainability General Manager. “If a company like Wilmar wants to remain globally relevant, it is important to maintain sustainability as part of the business.”
Cheap and versatile, palm oil is found in products ranging from pizza to lipstick but the $60 billion industry in Southeast Asia has faced an intense backlash and even consumer boycotts for clearing biodiversity-rich rainforests for palm cultivation.
The European Union, the third largest palm importer, has already decided to phase out palm-based transport fuels from its consumption of renewables by 2030 and is expected to set new rules on the use of palm oil in food.
Britain is also considering a new law that would fine companies that uses commodities grown on illegally deforested land.
With satellite technology making the monitoring of deforestation publicly accessible, the level of scrutiny is high and deforestation is not acceptable to stakeholders, the sustainable-certified palm companies said.
“Demand for physical certified sustainable palm oil has also been on an increase year-on-year,” said Sime Darby Plantation sustainability head Rashyid Redza Anwarudin.
Malaysia’s Sime, the world’s largest producer of sustainable palm oil, added that international and local investors such as the central bank and Securities Commission also have increasing commitments around climate change.
“Taking [climate] action is not optional and we have set a bold path forward to ensure sustainability across the supply chain,” said Cargill Tropical Palm’s Group Sustainability Manager Yunita Widiastuti.
Reporting by Mei Mei Chu; editing by David Evans