Mondelez’s sustainable palm oil plan: “We want the whole supply chain to transform”

The company has committed to sourcing 100% RSPO-certified sustainable palm oil, and achieved its goal two years ahead of schedule during 2013. Much of that target was met through the use of GreenPalm (book and claim) certificates, but the company says it intends to increase the amount of traceable palm oil in its supply chain.

“It’s not enough for the market to say ‘we want it to be done this way’ and expect it to be done, because palm oil has a big role to play at origin,”​ Horrell told FoodNavigator. Therefore, he said the company has been working with local trade associations, like UNDP Indonesia, to help stem deforestation as well as with the RSPO (Roundtable on Sustainable Palm Oil).

Buyers of GreenPalm certificates are guaranteed that a tonnage of palm oil or derivatives equivalent to the tonnage they use has been produced from RSPO-certified plantations. While the actual oil is not necessarily sustainably produced, the certificates guarantee sustainable production for the amount bought. Participants can use the GreenPalm logo and claim: ‘Supports the production of RSPO-certified sustainable palm oil’.​

But Mondelez aims to go further and trace all of its oil back to the mill.

“We wanted to incentivise the whole palm oil supply,”​ said Horrell. “Something we think is really important is sector-wide transformation…If an innovative company builds up a segregated supply chain you can ensure that your oil is certified, but we want the whole supply chain to transform.”​

European momentum​

While a large number of European palm oil users are focused on moving the region to 100% sustainably sourced palm oil, the palm oil market elsewhere is much larger, and sustainability standards are less widely discussed. Together, India and China represent 30% of the global palm oil market, for example.

“Europe alone, nor any individual market, is the whole story,”​ said Horrell. “But it’s very important for those markets where there’s momentum to capitalise on that momentum. It helps to build capacity to support sustainable palm oil and therefore help that transformation.”​

He said multinational company commitments to sustainability were valuable because they helped bring these standards into the mainstream, whether or not a market signal exists in certain regions.

“The big global suppliers are increasingly embracing this issue and that’s very encouraging …It needs support beyond the innovators to become mainstream.”​

From a European perspective, Horrell said there were still challenges, despite the current momentum toward more sustainable supply. In particular, he said the widespread use of front-of-pack product labelling advertising ‘no palm oil’ was not helpful.

“We need to drive positive change, not turn our backs,”​ he said.