Certified Palm Oil A Needed Component of Corporate Climate Commitment
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Over 200 companies pledge net-zero emissions by 2040 as pressure on private sector mounts. ABC News
This headline should have been cause for celebration as private corporations sign up to fight climate change. But Time media peeled back some of the pledges and warned:
At COP26, the U.N. climate summit in Glasgow, governments and businesses put forward ambitious-sounding plans to de-carbonize. But a closer look beneath the surface shows many corporate “net-zero” plans are not nearly as good as they sound.
This headline should have been cause for celebration as private corporations sign up to fight climate change. But Time media peeled back some of the pledges and warned:
At COP26, the U.N. climate summit in Glasgow, governments and businesses put forward ambitious-sounding plans to de-carbonize. But a closer look beneath the surface shows many corporate “net-zero” plans are not nearly as good as they sound.
Other opinions have not been as kind as Grain blasted corporate pledges.
Corporations are, without a doubt, the number one obstacle to meaningful action on the climate crisis. These almighty actors have spent the past two decades undermining scientific consensus, blocking meaningful legislation and greenwashing their own responsibility. Grain The fundamental problem with corporate pledges to fight climate change is that while these pledges are big on words, it is very obvious to the casual observer that these words have been uttered with the intent for them to remain mere words, not commitments. These empty words behind fighting climate change have been called out by the UN which launched a new initiative, the High-Level Expert Group on the Net-Zero Emissions Commitments of Non-State Entities, which will draft recommendations for the following issues:
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This initiative by the UN coupled with the EU and the UK’s Corporate Due Diligence proposals should remove any veneers of responsibility that some in the corporate sector have employed to greenwash their products.
The threat of being named and shamed in a failure to meet these new corporate sustainability goals should be enough to drive market uptake of certified sustainable palm oil. As one of the most common ingredients in consumer products, the sustainability of palm oil, as a popular target for criticism, in corporate supply chains should be a priority for corporate action.
But as we are witnessing, corporate uptake of Certified Sustainable Palm Oil has stagnated for years. Despite “record sales” in 2014, the oversupply of CSPO continues to be a problem for producers which have not seen returns for their investments into certification.
In an attempt to correct the imbalance between CSPO supply and demand, the RSPO introduced the concept of “Shared Responsibility.” The concept was supposed to drive uptake of certified palm oil so that it can convince the grower members to increase certification.
We reached out to the new CEO of the RSPO, Joseph D’Cruz for his thoughts on the issues
Joseph D’Cruz (JD) joined the RSPO as Chief Executive Officer in March 2022, based in Kuala Lumpur, Malaysia.
D’Cruz brings over over twenty years’ experience in sustainability, having worked on a range of global development challenges from environmental conservation and climate change to poverty reduction, economic development and disaster recovery. RSPO
CSPO Watch: How is the progress of Shared Responsibility?
RSPO CEO: We’ve made significant progress on Shared Responsibility in recent years. The SR uptake targets for years 1-3 are in force, requiring processor and trader members to increase their uptake of CSPO by 2% year on year, and CGM and retailer members to increase their uptake by 15% in year one and 12% in years 2 & 3. We have just started the first round of public consultations on the Shared Responsibility Verification Manual, which will strengthen our ability to verify and report on these commitments.
These targets are ambitious, particularly for CGM and retailer members where CSPO is only one of many ingredients in their products. Other ingredients may not have systems for certifying sustainability that are as robust, making it hard for manufacturers and retailers to make broad sustainability claims for their final products, even if they are using certified sustainable palm oil as a key ingredient. But these members have still committed to meeting their uptake targets, which is helping to shift CSPO demand in the right direction.
More broadly, the RSPO Trademark continues to provide a level of credibility that all our members need to rally behind. Just last month (May 2022) the RSPO Trademark was ranked among the top 12 food eco labels in the Dutch market as well as the best eco label for certified sustainable palm oil. So we all need to do a better job of talking about the progress the sustainable palm oil sector has achieved and the significant contribution we are making to sustainable agriculture, rural development and the achievement of the SDGs.
Our downstream members are not only increasing uptake, they are also coming together to help address some of the biggest challenges in sustainable agriculture. For example, Danone, L’Oréal, Mars Incorporated, Musim Mas and SNV have partnered with the Livelihoods Funds to advance regenerative agriculture in North Sumatra, Indonesia.
The project, spanning ten years, aims to sustain a deforestation-free supply chain, regenerate 8,000 hectares of degraded land, restore local biodiversity in 3,500 hectares, and improve the livelihoods of 2,500 independent smallholder farmers.
CSPO Watch: The EU proposal for Corporate Due Diligence is ramping up. Numerous NGOs have spoken on the issue.
Rubber and soy have been identified as main commodities for deforestation but these commodities including rapeseed and sunflower, lag far behind palm oil in terms of certification and traceability. Are there any lessons that other commodities can draw from the RSPO’s work?
RSPO CEO: Efforts pioneered by the members of the RSPO over the last 18 years can provide important pointers for how deforestation can be tackled in other agricultural supply chains. The standards our members have agreed and hold themselves to provide a very robust response to the deforestation challenge. And recent data, e.g. from Chain Reaction Research, shows that deforestation linked to palm oil expansion has declined precipitously.
There are currently several regulatory proposals coming out of Brussels which are highly relevant for our members that we are following closely. The Social Corporate Due Dilligence directive is one and the regulation banning goods related to deforestation and forest degradation from the EU market is another. We are following these developments and other pending regulations closely and providing input in the debate on behalf of our members.
The RSPO welcomes these initiatives as they will strengthen sustainability across the supply chain of the relevant commodities. We do however emphasize that the legislation that comes out of them must be implementable by the companies concerned and not lead to other negative side impacts, such as the exclusion of smallholders from the EU supply chain.
In fact, to further halt deforestation, we cannot leave smallholders behind in the certification process. One of our concerns with the proposed legislation is that if companies are not given sufficient time to transform their supply chains they will limit their risk by eliminating smallholders out of their supply chain. This could undo years of investment in socio-economic progress.
A key element in the deforestation regulation is the issue of traceability. Indeed, I believe that the palm oil sector is further than some of the other commodities and therefore better prepared to meet the requirements of the draft regulation.
RSPO members have committed to a clear No Deforestation standard, and we are working hard to ensure that all the palm oil our members produce can be shown to meet this standard. We are increasing the use of satellite-based technology, for instance in the RSPO Hotspot Hub (which gives alerts when there could be fires erupting) and GeoRSPO. Depending on how the negotiations in the EU go, the latter can also be developed as a tool that our members can use for demonstrating their compliance with the geo location requirements from the EU or to show that development took place before the cut off date of the regulation. That way RSPO drives sustainability in the palm oil supply chain by providing greater transparency and accountability. Every agriculture sector has an opportunity to improve their transparency through tools like this.
But there are still issues to be solved around traceability in the proposal. It is not clear why the Commission has chosen to require traceability to plot level as such granularity requires a lot of investment without having significant benefits. There are alternatives that can help to get the data the Commission wants without the need for traceability to plot level. Traceability to mill or to production area as the European Parliament has proposed can be ways forward which provide a better balance between the necessary investments and the granularity of the required data.
Along with other certification schemes, RSPO asks for regulators to understand the unique challenges smallholders face, to recognise that it takes time for companies to adjust their supply chains, and to set reasonable and achievable timeframes to achieve the necessary traceability without leaving anyone behind in the process.
CSPO Watch: FEDIOL, an EU trade group has consistently asked for G2G partnerships to reduce deforestation while acknowledging weakness of voluntary schemes like RSPO. EU Commission reports also indicate that voluntary certifications will not be considered Yet the RSPO remains best equipped, with its long history of reducing deforestation in member plantations and ability to meet transparency with RSPO Trace, what are your thoughts?
RSPO CEO: We welcome the EU Commission's proposal for regulation to minimise the risk of deforestation and forest degradation associated with commodities and products placed on the European market.
It is however not correct that voluntary schemes are not recognized. Although certification alone and by itself will not be sufficient to get market access, article 10.2.j. of the proposal clearly states that complementary information on compliance with the regulation, may include information supplied by certification or other third-party-verified schemes, including voluntary schemes recognised by the Commission. We call on the Commission to make sure it specifies the minimum requirements for credible operations to be met by certification and other third party verified schemes if they are used as part of a due diligence risk assessment and risk mitigation procedure. This is necessary to prevent the legislation from encouraging the emergence of low-bar solutions and ensures coherence with existing internationally recognised standards.
Halting deforestation in high conservation value landscapes ultimately requires strong collaboration across all stakeholders, local and global, with national governments of these producer countries in the lead. We are working with partners on solutions such as Jurisdictional Approaches, which will ultimately help us address deforestation and sustainability at the landscape level. I believe this will be a much more effective approach that selectively targeting parts of the supply chain for individual commodities.
CSPO Watch thanks Joseph D’Cruz, the new CEO of the RSPO for his responses to our questions.
Published June 2022. CSPO Watch
The threat of being named and shamed in a failure to meet these new corporate sustainability goals should be enough to drive market uptake of certified sustainable palm oil. As one of the most common ingredients in consumer products, the sustainability of palm oil, as a popular target for criticism, in corporate supply chains should be a priority for corporate action.
But as we are witnessing, corporate uptake of Certified Sustainable Palm Oil has stagnated for years. Despite “record sales” in 2014, the oversupply of CSPO continues to be a problem for producers which have not seen returns for their investments into certification.
In an attempt to correct the imbalance between CSPO supply and demand, the RSPO introduced the concept of “Shared Responsibility.” The concept was supposed to drive uptake of certified palm oil so that it can convince the grower members to increase certification.
We reached out to the new CEO of the RSPO, Joseph D’Cruz for his thoughts on the issues
Joseph D’Cruz (JD) joined the RSPO as Chief Executive Officer in March 2022, based in Kuala Lumpur, Malaysia.
D’Cruz brings over over twenty years’ experience in sustainability, having worked on a range of global development challenges from environmental conservation and climate change to poverty reduction, economic development and disaster recovery. RSPO
CSPO Watch: How is the progress of Shared Responsibility?
RSPO CEO: We’ve made significant progress on Shared Responsibility in recent years. The SR uptake targets for years 1-3 are in force, requiring processor and trader members to increase their uptake of CSPO by 2% year on year, and CGM and retailer members to increase their uptake by 15% in year one and 12% in years 2 & 3. We have just started the first round of public consultations on the Shared Responsibility Verification Manual, which will strengthen our ability to verify and report on these commitments.
These targets are ambitious, particularly for CGM and retailer members where CSPO is only one of many ingredients in their products. Other ingredients may not have systems for certifying sustainability that are as robust, making it hard for manufacturers and retailers to make broad sustainability claims for their final products, even if they are using certified sustainable palm oil as a key ingredient. But these members have still committed to meeting their uptake targets, which is helping to shift CSPO demand in the right direction.
More broadly, the RSPO Trademark continues to provide a level of credibility that all our members need to rally behind. Just last month (May 2022) the RSPO Trademark was ranked among the top 12 food eco labels in the Dutch market as well as the best eco label for certified sustainable palm oil. So we all need to do a better job of talking about the progress the sustainable palm oil sector has achieved and the significant contribution we are making to sustainable agriculture, rural development and the achievement of the SDGs.
Our downstream members are not only increasing uptake, they are also coming together to help address some of the biggest challenges in sustainable agriculture. For example, Danone, L’Oréal, Mars Incorporated, Musim Mas and SNV have partnered with the Livelihoods Funds to advance regenerative agriculture in North Sumatra, Indonesia.
The project, spanning ten years, aims to sustain a deforestation-free supply chain, regenerate 8,000 hectares of degraded land, restore local biodiversity in 3,500 hectares, and improve the livelihoods of 2,500 independent smallholder farmers.
CSPO Watch: The EU proposal for Corporate Due Diligence is ramping up. Numerous NGOs have spoken on the issue.
Rubber and soy have been identified as main commodities for deforestation but these commodities including rapeseed and sunflower, lag far behind palm oil in terms of certification and traceability. Are there any lessons that other commodities can draw from the RSPO’s work?
RSPO CEO: Efforts pioneered by the members of the RSPO over the last 18 years can provide important pointers for how deforestation can be tackled in other agricultural supply chains. The standards our members have agreed and hold themselves to provide a very robust response to the deforestation challenge. And recent data, e.g. from Chain Reaction Research, shows that deforestation linked to palm oil expansion has declined precipitously.
There are currently several regulatory proposals coming out of Brussels which are highly relevant for our members that we are following closely. The Social Corporate Due Dilligence directive is one and the regulation banning goods related to deforestation and forest degradation from the EU market is another. We are following these developments and other pending regulations closely and providing input in the debate on behalf of our members.
The RSPO welcomes these initiatives as they will strengthen sustainability across the supply chain of the relevant commodities. We do however emphasize that the legislation that comes out of them must be implementable by the companies concerned and not lead to other negative side impacts, such as the exclusion of smallholders from the EU supply chain.
In fact, to further halt deforestation, we cannot leave smallholders behind in the certification process. One of our concerns with the proposed legislation is that if companies are not given sufficient time to transform their supply chains they will limit their risk by eliminating smallholders out of their supply chain. This could undo years of investment in socio-economic progress.
A key element in the deforestation regulation is the issue of traceability. Indeed, I believe that the palm oil sector is further than some of the other commodities and therefore better prepared to meet the requirements of the draft regulation.
RSPO members have committed to a clear No Deforestation standard, and we are working hard to ensure that all the palm oil our members produce can be shown to meet this standard. We are increasing the use of satellite-based technology, for instance in the RSPO Hotspot Hub (which gives alerts when there could be fires erupting) and GeoRSPO. Depending on how the negotiations in the EU go, the latter can also be developed as a tool that our members can use for demonstrating their compliance with the geo location requirements from the EU or to show that development took place before the cut off date of the regulation. That way RSPO drives sustainability in the palm oil supply chain by providing greater transparency and accountability. Every agriculture sector has an opportunity to improve their transparency through tools like this.
But there are still issues to be solved around traceability in the proposal. It is not clear why the Commission has chosen to require traceability to plot level as such granularity requires a lot of investment without having significant benefits. There are alternatives that can help to get the data the Commission wants without the need for traceability to plot level. Traceability to mill or to production area as the European Parliament has proposed can be ways forward which provide a better balance between the necessary investments and the granularity of the required data.
Along with other certification schemes, RSPO asks for regulators to understand the unique challenges smallholders face, to recognise that it takes time for companies to adjust their supply chains, and to set reasonable and achievable timeframes to achieve the necessary traceability without leaving anyone behind in the process.
CSPO Watch: FEDIOL, an EU trade group has consistently asked for G2G partnerships to reduce deforestation while acknowledging weakness of voluntary schemes like RSPO. EU Commission reports also indicate that voluntary certifications will not be considered Yet the RSPO remains best equipped, with its long history of reducing deforestation in member plantations and ability to meet transparency with RSPO Trace, what are your thoughts?
RSPO CEO: We welcome the EU Commission's proposal for regulation to minimise the risk of deforestation and forest degradation associated with commodities and products placed on the European market.
It is however not correct that voluntary schemes are not recognized. Although certification alone and by itself will not be sufficient to get market access, article 10.2.j. of the proposal clearly states that complementary information on compliance with the regulation, may include information supplied by certification or other third-party-verified schemes, including voluntary schemes recognised by the Commission. We call on the Commission to make sure it specifies the minimum requirements for credible operations to be met by certification and other third party verified schemes if they are used as part of a due diligence risk assessment and risk mitigation procedure. This is necessary to prevent the legislation from encouraging the emergence of low-bar solutions and ensures coherence with existing internationally recognised standards.
Halting deforestation in high conservation value landscapes ultimately requires strong collaboration across all stakeholders, local and global, with national governments of these producer countries in the lead. We are working with partners on solutions such as Jurisdictional Approaches, which will ultimately help us address deforestation and sustainability at the landscape level. I believe this will be a much more effective approach that selectively targeting parts of the supply chain for individual commodities.
CSPO Watch thanks Joseph D’Cruz, the new CEO of the RSPO for his responses to our questions.
Published June 2022. CSPO Watch
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