Taking radical step on palm oil supply chain transparency
This week, Unilever became the first consumer goods company to publicly disclose the suppliers and mills we source from, both directly and indirectly. This marks a major milestone in our continued drive for a more sustainable palm oil industry.
By sharing information about our suppliers and the mills that process the products we buy, we are making a real step change towards greater transparency in the industry. We strongly believe that being open and transparent is key to achieving a fully traceable supply chain – a goal we set ourselves back in 2013 when we first launched our Sustainable Palm Oil Sourcing Policy and which we have been pursuing ever since.
Not only does it give us better visibility of where our palm oil comes from, it also enables us to more proactively identify issues, and address them quickly and effectively. And, as a result of this data being available we are making it much easier for others to bring demonstrable challenges and insights to our attention. This in turn enables us to investigate and work to remedy the issues alongside suppliers, NGO partners, governments and other stakeholders.
“A lot of people think if you outsource your value chain you can outsource your responsibilities. I don’t think so.” said CEO Paul Polman at a panel at this year’s World Economic Forum in Davos. “We need to be at the forefront of change. This is why Unilever is committed to greater transparency and continue to work with our partners to drive positive change in the palm oil industry.”
Transparency + traceability = transformation
The palm oil supply chain is long and complex, with the palm oil changing hands many times before it reaches our factories. The fruit is grown on plantations where farmers sell their produce to middle men and agents. They in turn supply it to a mill where the fruit bunches are processed. Next it is transported via traders to refineries for further processing. Only after this point does it enter our direct supply chain.
Transparency and traceability are important as we can only effectively address the systemic issues associated with how palm oil is cultivated and produced – such as deforestation and human rights abuses – if we know exactly where the problems are. Having greater visibility across the entire supply chain will help accelerate transformation of the industry.
As Unilever’s Chief Supply Chain Officer, Marc Engel, explains: “We have been long committed to lead the drive towards transparency and the best way to demonstrate this is by opening up our own supply chain. Due to traditional commercial sensitivities and the complexity of the palm oil supply chain, it has required perseverance to get to where we are now. We are very proud to be the first consumer goods company to take this step. Unilever believes that complete transparency is needed for radical transformation. We want this step to be the start of a new industry-wide movement.”
Positive change requires bold steps
Through this extensive mapping exercise – of over 1,400 mills and more than 300 direct suppliers – it’s clear that, despite the progress we have made as a company and as an industry, there are still serious environmental and social issues prevalent in the industry. This is a big step towards greater transparency, but we know there is more work to be done to achieve a truly sustainable palm oil industry and we will continue our efforts to make this a reality.
As a business, we have a long history of doing the right thing. This means that at times we take bold steps to achieve positive change. We are a founding member of the Roundtable on Sustainable Palm Oil, which brought the industry together to commit to tackling systemic environmental and social issues associated with palm oil production. With our Sustainable Palm Oil Sourcing Policy (PDF | 167KB), which we relaunched in 2016, we committed to stricter targets to ensure we continue to lead the way in transforming the entire palm oil industry.