The importance of palm oil
Palm oil is the most versatile and widely produced vegetable oil. It is found across both food and personal care items and when produced responsibly, it can support millions of livelihoods whilst minimising the demand on natural ecosystems. It is the most land-efficient oil crop, with a much greater yield per hectare than alternative oils. However, palm oil continues to be a significant threat to some of the world’s most biodiverse forests. It can only be grown in tropical regions, and the expansion of production over past decades has been a major driver of deforestation and habitat loss. This is a challenge that the entire industry must address, and we have an important role to play in tackling this challenge at an industry level.
Why doesn’t Sainsbury’s just remove palm oil from their own-brand products?
According to Our World in Data, palm oil produces over a third of the world’s oil but uses less than a tenth of croplands devoted to oil production. To get the same amount of oil from other sources like soybean or coconut, you would need anything between 4 and 10 times more land. Rather than solving the problems associated with palm oil today, it would simply shift them elsewhere, and continue to affect people, habitats and species in other parts of the world.
Our approach to sustainable palm oil
Our approach to the sustainable sourcing of palm oil is informed by the learnings of the past ten years on efforts to tackle deforestation in palm-producing landscapes. Specifically, despite a large part of the industry setting and often meeting 100 per cent independently certified sourcing targets for the palm oil in their products, palm-driven deforestation has continued at alarming rates in the last decade. Certification is a critical tool, but in many cases is used as a premium, niche product requested only by certain markets, instead of driving a shift towards sustainable production as a norm. As a result, our evolved approach looks not only to ensure that our volumes are verified sustainable and deforestation-free, but to encourage the companies in our supply chains to adopt better production and sourcing practices. This will help ensure that our collective supply chains support the sustainable development of palm production that benefit both people and nature. In parallel, we are supporting landscape and jurisdictional solutions that aim to tackle the root causes of deforestation, considering economic and social factors at production level. We know that supporting farmers, communities and local authorities in conserving natural ecosystems is central to our approach to tackling global deforestation.
Picture via the Rainforest Alliance
1. Delivering Deforestation-Free Palm Oil for our products:
Sainsbury's is committed to eliminating deforestation and conversion of any ecosystem from our palm oil supply chains, in line with the Accountability Framework Initiative (AFi) definition.
We require that the palm oil in our food and non-food own brand products is physically certified by the Roundtable on Sustainable Palm Oil (RSPO), with a preference for segregated RSPO certification (see definitions at bottom of this page). Our target year was 2020 and in 2021 we achieved this target, with 100 per cent of the palm oil used in our products being physically certified RSPO (99.3 per cent in 2020). Details of our palm oil policy can be found here.
The RSPO was established in 2004 to promote the production and use of sustainable palm oil for the benefits of the global community, and we were the first retailer in the UK to require it for our products. The RSPO sets the environmental and social standards for sourcing sustainable palm oil and includes palm oil producers, palm oil processors and traders, environmental NGO’s, consumer goods manufacturers, social NGO’s, banks, and retailers. We became members of the RSPO just after it was established. Sainsbury’s supports the implementation of the RSPO Shared Responsibility requirements in our palm oil related operations.
Our progress
As part of our Plan for Better, we have committed to reporting transparently on our performance. You can find our historic performance here and our 2022 Own Supply Performance below.
In 2024, we will continue to pursue action in palm oil derivatives (oleochemicals) particularly in non-food grocery products. These supply chains are incredibly complex and the volumes in our supply chain are relatively small. To tackle this, we will work with industry groups including the Oleochemical Working Group, part of the UK Sustainable Commodities Initiative, to demonstrate demand for greater volumes from segregated sources.
Our palm oil footprint is measured by third-party 3keel, and calculated using a combination of:
1) suppliers in scope of our palm oil policy.
2) disclosed volumes and certification from direct suppliers.
3) conversion factors for different palm derivatives.
2. Supplier and Trader Engagement
Whilst setting clear expectations for our own products is an important first step, we do not think this is sufficient. We want to work with our suppliers and the palm oil traders they source from to ensure that they are not contributing to deforestation elsewhere in their operations. We know this will be achieved progressively, but by working collaboratively with others we believe we can send a clear market signal to bring sector-wide change.
As members of the Consumer Goods Forum (CGF) Forest Positive Coalition of Action we have developed a shared vision for what it means to be Forest Positive as a company in a palm oil supply chain, building on the Coalition’s Palm Oil Roadmap. The five basic elements of the Coalition’s “Forest Positive Approach” are for businesses to have the following in place:
1. Public commitment to 'deforestation and conversion-free' across the entire palm oil commodity business, including a public time-bound action plan with clear milestones
2. Process for regular supplier engagement
3. Mechanism to identify and to respond to grievances
4. support iniatives delivering forest positive development at landscape/jurisdictional and/or sectoral level
5. Regular public reporting against key KPIs
Starting from 2022, we engaged a selection of traders in our supply chains that use palm oil on this guidance, to encourage a wider adoption of the Forest Positive approach.
Own-brand manufacturers performance:
- Performance of direct suppliers against the elements of the Forest Positive Approach:
- 100% of our direct suppliers are requested to disclose their use of palm oil within their supply chain through a survey carried out by 3Keel. Through this process we share information on the principles of the Forest Positive approach and feedback on the actions they are taking to tackle deforestation in their supply chains.
- 27% have a group level policy to achieve 100 per cent deforestation-free sourcing across their operations
- 67% have a group level policy to source 100% RSPO certified palm based ingredients
- 26% have an action plan in place to achieve 100 per cent segregated RSPO certified volumes
We are continuing to collect performance data from our own-brand manufacturers, including on three to five of the Forest Positive Approach listed above.
Trader/Importers performance:
- Per cent of volume linked back to importers that were engaged and informed of the Forest Positive Approach
- 68%
- Performance of traders/importers against the elements of the Forest Positive Approach:
- Commitments: 71%
- Supplier Engagement: 70%
- Monitoring and Response Systems: 64%
- Support for Landscapes: 48%
- Transparency and Accountability: 71%
The score is measured as the average score from the 2022 Palm Oil Transparency Coalition (POTC) assessment.
3. Monitoring and Response
Whilst certification has been an important tool in helping ensure our products do not contribute to deforestation, we recognise the challenge represented by the lack of supply chain transparency in global palm oil supply chains.
To address this, we have partnered with others to establish the Palm Oil Transparency Coalition (POTC), a pre-competitive group of palm oil buyers who together assess the sustainability performance of palm oil importers and traders. The questionnaire covers every trader's commitments and policies, as well as their efforts in implementing them. We have used the 2023 POTC assessment to measure the performance of the top palm oil traders against the elements of the Forest Positive Approach. The list of the main traders in our supply chain can be found under '2023 Palm Oil Importers' below, as well as a list of our top own-brand manufacturers that use palm oil for our products.
4. Working with smallholders in oil palm landscapes
Since 2022 we invested £300,000 to support an initiative in the Sintang District of West Kalimantan, facilitated by Rainforest Alliance. The landscape initiative promotes integrated landscape management that brings land-users and stakeholders together to address issues around palm oil production, including the protection of High Conversation Value areas. The project supports smallholder farmers to implement good agricultural practices and form action plans to promote more sustainable palm oil production. By 2025, it seeks to reduce deforestation by 25% in the operational area, integrate the accountability framework into 5 company sustainability commitments, work with smallholders to improve traceability and increase the incomes of smallholder farmers by improving production practices, enterprise skills and crop diversification. For example, focussing on higher yields as opposed to the expansion of production. We are supporting this project alongside Metro, another CGF Forest Positive Coalition member.
Since 2022, the initiative delivered training to 24 indigenous groups to increase productivity and climate-smart crop management practices; prepared smallholders for certification by offering guidance on how to implement practices, and setting up an independent smallholder association to help prepare for certification; and worked with the Sintang government to improve monitoring and evaluation of high conservation value areas in palm oil concessions. Future work will focus on developing traceability systems with the government to support EUDR compliance and helping smallholders to become certified.
Picture via the Rainforest Alliance
Working in collaboration with the Consumer Goods Forum (CGF)
We are actively involved in driving a collaborative effort to eliminate deforestation and protect forests.
In 2020, the CGF launched the Forest Positive Coalition of Action, comprised of 18 member companies committed to moving efficiently and quickly toward a forest positive future. With a collective market value of USD 1.8 trillion (GBP 1.3 trillion), these member companies are in a leading position to leverage collective action and accelerate systemic efforts to remove deforestation, forest degradation and conversion from key commodity supply chains. In 2021, the focus was on developing and publishing the individual commodity roadmaps, which translate our vision for Forest Positive production into tangible actions and KPIs that members commit to.
Our aim in participating in the implementation of these roadmaps is to drive collaborative efforts to accelerate the removal of commodity-driven deforestation and human rights abuses from individual supply chains and drive transformational change in key commodity landscapes.
The latest public palm oil roadmap we have committed to can be found here.
Methodology for identifying initiatives to invest in
Working with the CGF, we collectively developed an approach to identifying landscapes to invest in. This is in order to ensure the initiative has the fundamental conditions which will allow it to deliver long term change in the landscape. These are aligned to the Forest Positive Coalition landscape principles and the Landscape Reporting Framework This involves examining 4 areas:
1. Funding: there should be clear incentives for producers to adopt more sustainable practices. Initiatives should also have long-term plans to access funding beyond Sainsbury’s, in order to maximise impact and ensure resilience.
2. Multistakeholder partnerships and governance: initiatives need to engage with local stakeholders, particularly farmers/ growers, in a shared vision for the landscape. There should be clear processes to encourage collaboration and resolve any trade-offs. This also includes ensuring government support for the initiative, to ensure a conducive regulatory framework, and private sector support, to demonstrate a market demand for more sustainable products.
3. Action Plan: initiatives should have a plan to establish DCF sourcing areas, conserve/ restore forests and natural habitats and clear targets with baselines and milestones.
4. Monitoring Reporting and Verification: the initiative should have systems to track progress against KPIs. This includes using the Landscape Reporting Framework.
5. Our commitment to Human Rights
We are committed to respecting human rights across our value chain to ensure the people who make or grow our products are not being exploited or exposed to unsafe working conditions - and ensure our businesses’ transition to Net Zero is just and equitable for the communities we source from.
Our Group-wide Ethical Sourcing Policy sets out the standards we require of all our suppliers. These are based on internationally recognised codes of labour practice, including the Ethical Trade Initiative (ETI) Base Code, the International Labour Organisation (ILO) core conventions, and the Universal Declaration of Human Rights. We have long-standing procedures to ensure that these standards are met.
Our code of conduct for Ethical Sourcing stipulates that suppliers must have documented all legal and/or customary rights in relation to land and water use of their operations. When land or water rights have been relinquished by Indigenous People or Local Communities to the benefit of the supplier, the supplier shall ensure that the decision was reached through a process of Free, Prior & Informed Consent in line with national legislation. If any land or water rights claim is brought against the supplier through judicial or non-judicial processes, the supplier shall engage in good faith to resolve the conflict and should keep Sainsbury's informed at all stages of the claim.
Our code of conduct for Ethical Sourcing stipulates that suppliers must have documented all legal and/or customary rights in relation to land and water use of their operations. When land or water rights have been relinquished by Indigenous People or Local Communities to the benefit of the supplier, the supplier shall ensure that the decision was reached through a process of Free, Prior & Informed Consent in line with national legislation. If any land or water rights claim is brought against the supplier through judicial or non-judicial processes, the supplier shall engage in good faith to resolve the conflict and should keep Sainsbury's informed at all stages of the claim.
Further information about how we champion human rights can be found on our website.
Related Disclosures:
Definitions – Roundtable on Sustainable Palm Oil Certification Supply Chain Systems
- Identity Preserved or IP – this means that identity preserved (IP) supply chain assures that the RSPO palm oil is uniquely identifiable to a single RSPO certified mill and its certified supply base.
- Segregated: Certified palm oil is kept apart throughout the supply chain.
- Mass-Balance: Certified palm oil is mixed in with conventional palm oil but monitored administratively.
- Book and Claim (Credits): Certified palm oil is not kept apart; Suppliers sell certificates to users; Claimed volumes are matched.