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Procter & Gamble, Cargill pledge to cut deforestation linked to palm oil

Deforestation for oil palm in Riau, on the Indonesian island of Sumatra
Deforestation for oil palm in Riau, on the Indonesian island of Sumatra. Photo by Rhett Butler.

Procter & Gamble (P&G) and Cargill today announced new measures to cut deforestation from their palm oil supply chains.

P&G (NYSE:PG), a consumer products giant that owns brands like Head & Shoulders and Oil of Olay, pledged to establish traceability of palm oil to supplier mills by the end of 2015. The policy commits it to eliminate deforestation from its supply chain by 2020, the same target adopted by the Consumer Goods Forum — a network of 400 of the world’s largest companies whose combined revenues exceed US$3 trillion a year.

“P&G’s commitment to no deforestation in its palm supply chain is unequivocal. Our aim is to develop effective long-term solutions to the complicated issue of palm oil sustainability. We are committed to driving positive change throughout the entire supply chain, not just for us, but for the industry and for the small farmers who depend on this crop,” said Len Sauers, P&G Vice President of Global Sustainability, in a statement. “P&G will continue to work with each of our suppliers, and we will invest in and work directly with small local farmers, where much of our supply comes from, to improve their production practices. This is the most complicated aspect of the palm supply chain, where P&G believes we can make a significant and lasting impact.”

P&G’s policy comes after a high-profile Greenpeace campaign, which included stunts like hanging banners from the company’s headquarters in Cincinnati. Nine activists face long prison terms for their involvement in the demonstration.

Greenpeace campaign against Head and Shoulders maker Procter & Gamble (P&G)
Greenpeace campaign against P&G

Greenpeace targeted P&G for what it viewed as a weak policy on palm oil sourcing. An investigation by the group found that the policy failed to prevent palm oil linked to the destruction of orangutan habitat in Borneo.

Accordingly, Greenpeace welcomed P&G’s announcement.

“Greenpeace applauds P&G for making a much stronger commitment to sourcing sustainable palm oil” said Joao Talocchi, Greenpeace Palm Oil Campaigner, “The important thing now is for P&G to push all its palm oil suppliers to live up to these standards and do this as quickly as possible, in order to make a real difference to the rainforests of Indonesia and the lives of people and tigers that depend on them.”

Greenpeace said that while the policy has a longer implementation time that those established by other companies in recent months, it will further incentivize palm oil producers to clean up their operations.

“If fully implemented, P&G’s announcement brings us much closer to the tipping point in which a strong No Deforestation policy becomes an entry level requirement for major buyers of palm oil.” said Talocchi “Colgate, Mars, L’Oréal, Ferrero, Unilever and Kellogg have all made strong commitments in the past four months, while Nestlé has been trying to address irresponsible palm oil for several years. This has already triggered some suppliers to adopt similar policies and can have a major impact on the ground in Indonesia.”

On the supply side, two of the world’s largest palm oil producers — Golden-Agri Resources and Wilmar — have adopted comprehensive policies that restrict plantation development in high conservation value and high carbon stock areas like peatlands and rainforests. These policies include provisions to respect the rights of local communities and employ labor standards. A handful of other palm oil companies — Agropalma, Daabon, and New Britain Palm Oil — have embraced similar safeguards via the Palm Oil Innovation Group (POIG).

Cargill, a trader that is both a buyer and seller, also moved on Tuesday to strengthen its palm oil sourcing standards. In a letter sent to the Roundtable on Sustainable Palm Oil (RSPO), Cargill said it is committing to zero deforestation across its supply chain, including no conversion of peatlands.

Cargill has been a long-time target of the Rainforest Action Network (RAN), which for the better part of a decade has been pushing the commodities giant to adopt stronger social and environmental standards.

Responding to the letter, Ginger Cassady, forest program director at RAN, told Mongabay that Cargill’s pledge should include “a binding, time-bound policy.”

“To become a truly responsible palm oil supplier, Cargill must verifiably eliminate deforestation, peatland destruction, land grabbing and human and labor rights violations from its global operations,” she said.

Deforestation for oil palm in Riau, on the Indonesian island of Sumatra
Deforestation for palm oil production in Riau Province. Photo by Rhett Butler.

Palm oil and deforestation

Palm oil is used in a wide range of household products, including snack foods, soaps, and cosmetics. But its uptake has come at a steep environmental costmore than 3.5 million hectares of forest in Indonesia, Malaysia, and Papua New Guinea was converted for plantations between 1990 and 2010. About a sixth of the crop’s expansion occurred on carbon-dense peatlands during that period, triggering the release of more than a billion tons of carbon dioxide from conversion alone. However expansion in recent years has increasingly occurred on peat soils, heightening the climate impact of plantations. Environmentalists are now campaigning to shift future expansion away from forest areas and peatlands to non-forested lands.

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