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Palm Oil Action Australia | March 30, 2017

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New Palm Oil Risk Tool Allows Companies to Better Identify Deforestation Risk

  • On July 29, 2016

sustainablebrands.com
New Palm Oil Risk Tool Allows Companies to Better Identify Deforestation Risk

Image credit: Global Forest Watch

Global Forest Watch’s new PALM (Prioritizing Areas, Landscapes and Mills) Risk Tool, released by the World Resources Institute (WRI) and freely available through its open-source Global Forest Watch Commodities platform, includes information about over 800 palm oil mills in Southeast Asia, along with regularly updated satellite imagery and spatial data. Using automatic analysis, the tool determines the level of risk that a particular mill is using palm oil from illegally deforested sources, making it a powerful platform for companies to not only better understand their supply chains, but figure out how to mitigate risk and allocate limited resources towards achieving zero-deforestation goals.

“There are some really ambitious commitments, but often there is not great information about how to implement these commitments,” said Sarah Lake, Corporate Engagement Research Analyst for WRI’s Global Forest Watch program, to Sustainable Brands. “This tool … really enables companies to prioritize, in their supply chain, the areas and the suppliers that will allow them to achieve the greatest progress possible with the smallest investment.”

One of the earliest users of the tool is the multinational consumer products giant Unilever, which, back in 2009, committed to using 100 percent sustainable palm oil in their supply chain by 2020. This, of course, is easier said than done, and the company, to its credit, has been working closely with WRI and other civil society organizations to create an achievable path towards this ambitious goal.

“The PALM Risk Tool will facilitate increased transparency, help us identify high-risk mills and support us as we work to drive the transformational change needed in the palm oil industry,” Dhaval Buch, Chief Procurement Officer at Unilever, said in a press statement.

Unilever is actively working with mills to ensure they all comply with the company’s standards, and achieve certification from the Roundtable on Sustainable Palm Oil (RSPO). The pilot project that WRI did with Unilever in advance of the Palm Risk Tool’s public release identified 29 high-risk mills – a small number, but critical to the company’s achieving its goals, allowing them to focus resources on improving these mills practices. In fact, they have even moved their goal up, now planning to reach 100 percent sustainable sourcing by 2019.

Unilever’s example shows how better information and support can speed up the process of ensuring a company’s supply chain is free of deforestation risk. Though the tool will not replace good corporate governance and supply chain management, it can help an organization work better, faster. That is why, according to Lake, the response from the private sector has been very positive.

“Companies are excited about the tool because its very actionable,” she said. “They often face enormous pressures to be committing more, and doing more, but without necessarily receiving help on how to do that, and the how is just as important.”

Companies will still have to do considerable legwork – for example, companies must be able to identify their source mills to utilize the tool. One important point that WRI emphasizes is that the tool is not meant to help companies identify bad mills to cut from supply chains. That would be counterproductive, as inevitably, new sellers will emerge and buy that unsustainable palm oil, leading to continued deforestation.

“It is essential that companies work with their suppliers to improve practices and not just cut them out of the supply chain,” Lake said. “This tool shouldn’t be used to simply blacklist or exclude suppliers.” In fact, the tool suggests options for how companies can engage with suppliers when high-risk mills are identified.

That plays into a larger theme – that the deforestation in the palm oil industry will not be stopped by individual companies making changes to their supply chains, no matter how big they are. There needs to be an industry-wide shift in practices, one in which companies work together, share information, and jointly address problems in their supply chains.

WRI hopes that the Palm Risk Tool evolves to not only include more accurate data about mills, but a resource for companies to share information about mills, best practices, and other data. It is the latest in a series of web-based tools the organization has released to help companies, civil society, and media better understand, analyze, and create strategies to prevent deforestation.

As technology, cooperation, and new partnerships emerge, perhaps soon we can speak of a truly sustainable, global palm oil industry in which everyone benefits.