Helping our customers through sustainable palm oil

A few weeks ago I was a guest speaker at the RSPO’s annual meeting, the RT10. Walmart asked me to write a blog on this event for their Green Room and so I thought I’d also post it here for our readers. If you were looking for one place with all the key Walmart’s palm oil activities and facts and figures then this is it. The video is a little long but again will give you an overview on our key activity to date and what the future for this project holds.

Please let me know what you think…

Palm oil is used in over half of the products we sell so when it’s claimed that its production is leading to loss of habitats for species such as orangutans and Sumatran tigers as well as negative environmental and social consequences we need to act. That’s why Walmart made a commitment in 2010 that by the end of 2015 all the palm oil we use would come from sustainable sources. To us a sustainable source means palm oil or derivatives certified by the Roundtable on Sustainable Palm Oil (RSPO) or to Rainforest Alliance’s standards.

Recently I had the opportunity to speak at the 10th Annual Roundtable meeting on sustainable palm oil in Singapore, hosted by the RSPO. I was asked to talk about Walmart’s experiences and share what successes and challenges we have encountered since we implemented our palm oil policy.

Our goal

In late October 2010 we set off on a journey to drive sustainability improvements in agriculture and the resulting goals focused on three key areas:
• Supporting farmers and their communities;
• Producing more food with fewer resources and less waste; and
• Sustainably source key agriculture products

Palm oil comes under the third goal and we committed to only use sustainable palm oil by the end of 2015. Ambitiously we set ourselves the highest and most stringent goal we could, which requires we use 100% Segregated Certified Sustainable Palm Oil (or SG CSPO) in our private label products.

What we did first

During the year following this announcement, we had a lot of work to do internally in order to align our global markets on delivering this goal. Teams were formed, training programs implemented, Walmart’s global palm oil usage was calculated and a sourcing policy was drafted, approved and briefed to suppliers. Once we’d carried out this crucial activity then we could start to engage externally which we did in 2012.

Washington industry meeting

Early this year it became apparent to me that even finding the existing local supply of CSPO was a challenge to our global markets and from talking to other retailers and manufacturers realised that this was not just a Walmart issue. We wanted to do something about this and become a leader in helping to tackle the issue of unsustainable palm oil.

In June of 2012, Walmart, with the very welcome support from WWF, the RSPO and the Consumer Goods Forum (CGF), organised an industry meeting in DC. Attending this meeting were representatives from across the palm oil chain from growers to processor/traders to manufacturers, retailers and lobby groups. This was one of the largest meetings ever held on this issue and we realised that we can play an important part in helping to tackle issues such as this due to our size and convening power. We intend to continue this activity in 2013 and I held many successful meetings at RT10 aligning others in this approach.

Our recent activities

Since the summer we’ve also been instrumental in a peer review of the PalmGHG calculator, which examines how many greenhouse gasses, which contribute to climate change, can be reduced when a plantation begins to implement the RSPO or Rainforest Alliance certification. We are very supportive of this kind of calculator becoming part of the RSPO’s key rules, their Principles & Criteria.

CSPO Directory

At the moment, the RSPO has reported that just less than 50% of CSPO produced is going unsold, however at Walmart we were finding that we couldn’t locate traders who were selling CSPO in many of our markets. We decided to focus on bridging that gap between supply and demand of CSPO, through creating a ‘CSPO directory’. The directory was made through contacting ten of the world’s largest processor/traders directly and asking them if they currently supply CSPO into our global markets and their plans for the years working up to 2015. We engaged closely with seven of the processor/traders were extremely helpful and with their cooperation we were able to produce the world’s first such tool mapping availability of CSPO.

Challenges and Successes

We have made considerable progress and Sam’s Club US was first company to use the RSPO trademark in North America on four of their bakery products. In the UK, Asda has been our leader on sustainable palm oil due to the unique position of the European marketplace, and now all of the palm oil used in the UK is from sustainable sources or supports sustainable palm oil.

This year we took the significant step of buying Green Palm certificates to cover the usage in 50% of our global markets. So in less than two years already over 20% of all the volume of palm oil we use globally comes from or supports sustainable sources. Within this nearly 15% is Green Palm certificates and over 5% comes from segregated sources, the gold standard.

Despite this progress there remain considerable challenges to reaching our goal. Customer awareness is still low and so we are driving this initiative on behalf of our customers as it’s the right thing to do on their behalf, rather than in direct response to requests. Availability and cost of CSPO also remains an issue to overcome.

The Future

We are keen to continue our role as a convener and to help accelerate uptake of CSPO. We believe that, as many retailers and manufacturers share our 2015 goal, working together is the only way we will achieve this ambitious end goal. We have a big task in front of us, however as the world’s largest retailer we have the opportunity and also we believe, the responsibility to implement sustainable sourcing practices.

Posted by Julian on 26 November 2012
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