Palm oil is used in 70% of cosmetic and personal hygiene products, including soap bars, toothpaste and face creams. It is also a key ingredient in staple foods such as bread and margarine, as well as treats such as chocolate, ice cream and biscuits. Its natural preservative qualities help to extend the shelf life of food products, reducing waste, and it is a primary cooking oil in many Asian and African countries.
This diversified demand makes it an attractive cash crop for low and middle-income nations such as Indonesia and Malaysia, which account for over 80% of global palm oil production. But the clearance of tropical rainforests for palm oil production has expanded in some parts of Africa in recent years as other nations have embraced the crop.
Extensive monocropping for palm oil production is one of the main causes of deforestation alongside urbanisation, cattle ranching, soybean production and logging. This is exacerbating the climate crisis and threatening the survival of endangered species.
To try to arrest and reverse deforestation, we engage with palm oil producers, processors, traders, consumer goods and retail companies, as well as Asian banks providing financing for plantations. We expect companies to take responsibility for deforestation in their supply chains, including going beyond certification to trace commodities back to their source.
We expect companies to communicate a clear strategy for how a deforestation-free supply chain will be achieved through implementation measures, monitoring, independent verification and collaboration. Companies should also carry out human rights due diligence to monitor labour practices and working conditions to ensure that employees earn a living wage, and that there is good health and safety on site.
Read the full article in our Q3 2022 Public Engagement Report.