Hershey has committed to sourcing 100% traceable sustainable palm oil by the end of 2014. This will be difficult without additional transparency from palm oil suppliers, says Eric Boyle

How can companies lead on sustainable palm oil? 

The Hershey Company has been on a three-year journey to understand and improve its palm oil supply chain. The company joined the Roundtable on Sustainable Palm Oil (RSPO) in 2011, and achieved 100% mass-balanced RSPO certified palm oil by the end of 2013.

In December 2013, Hershey announced it was taking an additional step towards 100% traceable sustainable palm oil by the end of 2014. This commitment will be independently verified and has led to the implementation of some of the most rigorous sustainability practices in the world for a food company.

Stepping back, the journey really began for Hershey and other US food companies eight years ago when the US Food and Drug Administration implemented trans fat labelling. Large multinational food companies such as Hershey reformulated their products with palm oil to remove trans fats. Palm oil is an ideal trans fat substitute within the confectionary sector. 

Staggering growth  

Globally, the growth of the palm oil sector has been staggering. Within the past five years it has overtaken soybean oil as the world’s largest produced edible oil. Currently, 85% of the world’s palm oil exports come from Indonesian and Malaysia. India, China and Indonesia are major consumers of palm oil, with the US importing only 2-4% of the world’s production.

A large multinational company such as Hershey is sometimes three to four supplier tiers away from the origin of an ingredient such as palm oil. And while it is very easy to identify the sustainability issues surrounding deforestation within the palm oil sector, it is not as simple to solve them from a single company’s perspective. This is especially true for a small purchaser of palm oil such as Hershey.

In 2011, Hershey joined the RSPO, the organisation having the most robust sustainability practices within the palm oil sector. The RSPO engages smallholders, large plantations, suppliers, end-user consumers, and NGOs to develop its principles and criteria around the production of sustainable palm oil. The multi-stakeholder organisation is widely regarded as the most recognisable palm oil sustainability standard in the world. Yet only 15% of the world’s palm oil is RSPO-certified.

This will require suppliers to identify their palm oil sources with which Hershey may not directly conduct business. It will allow Hershey to identify regionally where its palm oil is sourced. Specifically, the company will require suppliers to verify independently that their own supply chain does not contribute to the deforestation or destruction of wildlife habitat, clear high carbon stock forests or contribute to peatland expansion. Hershey will also require its suppliers to operate in compliance with local laws and regulations, including labour and human rights laws.

Given this information, Hershey will be able to monitor sustainability issues within the region, and address specific concerns with suppliers and consumers.

While there remains a lot to learn and more work to be done in this evolving situation, Hershey believes the new commitment is an excellent start and puts the company at the forefront of food companies around the world on this important issue. 

Eric Boyle is responsible sourcing manager at the Hershey Company. 

This was first published on www.betterpalmoildebate.org

deforestation  Food  Hershey  Palm Oil  sustainable supply chain 

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