Unilever Lays Bare Palm Oil Supply Chain in Rare Industry Move
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Consumer goods giant Unilever said on Friday (16/02) it had laid bare its entire palm oil supply chain, including all the suppliers and mills it sources from, to boost transparency in a rare industry move.
Unilever said it was the first consumer goods company to publish such details, having disclosed the location of more than 1,400 mills and over 300 direct suppliers of the oil used in products from snacks and soaps to cosmetics and biofuels.
The $62 billion palm oil industry has been plagued by concerns about deforestation and human rights abuses in countries such as Indonesia, the world’s biggest producer.
Marc Engel, Unilever’s chief supply chain officer, said the company hoped sharing the information would be the start of a new industry-wide movement toward supply chain transparency.
“Unilever believes that complete transparency is needed for radical transformation,” Engel said in a statement posted on Unilever’s website.
“This is a big step toward greater transparency, but we know there is more work to be done to achieve a truly sustainable palm oil industry and we will continue our efforts to make this a reality.”
Unilever said transparency and the ability to trace palm oil are vital in addressing deforestation and human rights abuses.
Palm oil supply chains are complex as the fruit changes hands many times from farmers to agents before it reaches a mill. It is then transported via traders to refineries for further processing, when it enters a company’s supply chain.
Over the past decade, consumer activist groups have pressed big palm oil buyers such as PepsiCo, Unilever and Nestle with supermarket boycotts and other protests over palm oil’s perceived links to deforestation and human rights abuses.
PepsiCo last month suspended procurement from a palm oil supplier over claims of labour abuses on its Indonesian plantations.
Questions & Answers
Q.What specific information has Unilever disclosed about its palm oil supply chain?
What specific information has Unilever disclosed about its palm oil supply chain?
Unilever has published the location of more than 1,400 mills and over 300 direct suppliers. This information covers all parts of its palm oil supply chain, from raw material sources to final processing.
Q.Why has Unilever decided to make its palm oil supply chain transparent?
Why has Unilever decided to make its palm oil supply chain transparent?
Unilever believes that transparency and traceability are vital in addressing deforestation and human rights abuses, which have plagued the palm oil industry. The company hopes this move will encourage industry-wide transparency.
Q.What challenges are typically associated with tracing palm oil within supply chains?
What challenges are typically associated with tracing palm oil within supply chains?
Palm oil supply chains are complex because the fruit changes hands multiple times. It moves from farmers to agents, then to mills, and subsequently via traders to refineries before entering a company's supply chain.
Q.Which other major companies have faced pressure regarding their palm oil sourcing practices?
Which other major companies have faced pressure regarding their palm oil sourcing practices?
Over the past decade, consumer activist groups have pressed big palm oil buyers including PepsiCo and Nestle. PepsiCo recently suspended procurement from a supplier due to claims of labour abuses.
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