Palm oil importers disclose greater progress towards sustainable production

27th January 2022

The 2021 palm oil importer and trader assessment undertaken by 3Keel for the Palm Oil Transparency Coalition (POTC) and the Consumer Goods Forum Forest Positive Coalition was published today to highlight the successes, challenges, and opportunities the sector faced in 2020 and 2021.

Action in response to Covid-19 and climate change were high on the list of actions and concerns taken by many of the companies, but more work is needed to ensure that their ambitions and activities are aligned to deliver on their goals. Some of the key highlights from the report include:

Limited monitoring and verification of human rights in the supply chain remains a risk, especially with Covid-19 limitations.
Climate change impacts and opportunities are not currently well understood by many importers or traders.
The new industry Implementation Reporting Framework for assessing mill risk is being widely used, but reporting is often inconsistent or not transparent.
Despite widespread adoption of cut-off dates for when deforestation and land conversion is considered to be acceptable, the focus for these companies is on active monitoring, rather than historic deforestation, resulting in a question of the utility of these dates in practice.
RSPO uptake has increased substantially, although the increase is limited to certain regions (e.g. Europe) and sectors, such as food.

One of the major findings from engaging the companies this year in the POTC’s fifth reporting period was that the preparedness for the sector to integrate the climate policies being communicated by their own organisations and producing countries is yet to take hold. In the few instances where companies indicated a degree of scenario planning and action, these were often limited to markets for their products, such as biofuel, rather than the commercial viability of processing mills if a carbon tax is introduced. This is an area that the POTC will be assessing further in the 2022 review.

3Keel has supported and developed the Palm Oil Transparency Coalition as its Secretariat and research partner since 2016.