Photographer: Goh Seng Chong/Bloomberg
World

Naming and Shaming Palm-Oil Buyers to Stop Rainforest Burning

Indonesian farmers burn ancient rainforest to expand plantations.
Why a Thick Smoke Haze Is Blanketing Asia

Singaporeans who choke on haze floating over from Indonesia can blame the world's desire for palm oil. The edible oil is an important ingredient in cookies, noodles and other packaged foods as well as soaps, shampoos, lipsticks and many other consumer goods. Farmers in Indonesia, the world's biggest supplier of the commodity, often illegally burn the world's oldest rainforest or use fire to clear old oil palms on existing plantations, and the smoke from the flames drifts across Singapore and Malaysia.

Groups like Greenpeace and the Union of Concerned Scientists have taken to naming and shaming companies that they say aren't doing enough to make suppliers stop the destruction of rainforests and peatlands. On Sept. 21, WWF released its 2016 Palm Oil Buyers Scorecard, looking at the policies of 137 companies worldwide. The good news, according to WWF, "at least half of the companies we looked at" have made "gratifying progress" toward using sustainable palm oil that meets criteria such as a ban on the destruction of primary forests.

Public pressure seems to be helping, with many companies announcing new policies or expanding on existing policies to clean up their supply chains of palm oil. To ensure their palm oil comes from sustainable sources, companies are making commitments to trace their supply back to the farm where growers harvest the fruit or the mill where producers extract the oil. "The industry is at a critical stage on the journey to sustainable palm oil," WWF Palm Oil lead Adam Harrison said in a statement. "More major brands are now using only certified palm oil yet laggard companies continue to drag their feet." 

A palm oil plantation stands next to burnt land in this aerial photograph taken in South Sumatra, Indonesia.

A palm oil plantation stands next to burnt land in this aerial photograph taken in South Sumatra, Indonesia.

Photographer: Dimas Ardian/Bloomberg

Johnson & Johnson. Greenpeace gave J&J a "Failing" grade in its 2016 scorecard published in March, saying the New Brunswick, NJ-based company should disclose a complete list of suppliers and sub-suppliers" but J&J was close to the top in WWF's scorecard, winning a score of 8 out of a possible 9 - meaning the company is "well on the path" according to WWF. Among the sourcing criteria J&J adopted in 2014 is a ban on palm-oil suppliers that develop peatlands or burn land. The company "has moved business away from two suppliers for noncompliance with our standards," Vice President for Media Relations Ernie W. Knewitz said in an e-mailed statement, "and we are continuing to take appropriate measures to verify conformance and to engage with other companies and NGOs to promote responsible palm oil production."

PepsiCo. Two environmental groups give good grades to PepsiCo: The maker of soft drinks and snack foods received a top score of 9 on WWF's scorecard (which places the company among those "leading the way," according to WWF) and 80.7 out of a 100 from the UCS.  But Greenpeace was more critical, saying the company "has no evidence that its palm oil is deforestation-free." In September, PepsiCo announced it had traced approximately 72 percent of its palm oil to the mill, up from 65 percent in 2015. "We are encouraged by the progress we've made," the company said, "but recognize that further work is needed." In an e-mailed statement to Bloomberg, PepsiCo said the Greenpeace scorecard "did not capture all of our ongoing work on sustainable palm oil." PepsiCo has set a 2020 deadline to be able to trace palm oil back to the plantations where the trees grow and has joined the Palm Oil Working Group of the Consumer Goods Forum, an industry body of retailers and manufacturers.

Dairy Queen. Warren Buffett's Berkshire Hathaway owns American Dairy Queen, the fast-food chain that specializes in soft-serve ice cream. WWF and Greenpeace didn't include Dairy Queen in their scorecards but the UCS gave Dairy Queen a zero for "no commitment" to finding palm oil that doesn't contribute to the destruction of rain forests. In a statement, the company said suppliers of its U.S. and Canadian locations will meet guidelines on sustainable palm oil by 2018. Suppliers will also need to show producers' "growing and harvest practices do not contribute to deforestation and ensure critical and fragile environmental resources and habitats remain undisturbed." 

Domino's. Like Dairy Queen, Domino's also wasn't on WWF and Greenpeace's lists but got a zero score from the UCS. That grade is out of date, according to the company. Domino's is "committed to sourcing palm oil that is produced without deforestation of High Conservation Value areas, High Carbon Stock forests or the destruction of peat land," the company said in an e-mailed statement, saying Domino's achieved 100 percent palm-oil traceability back to the mill in September 2015.

Wendy's. The fast-food chain, criticized two years in a row by the UCS for having "zero commitment" to sustainable palm oil, scored a mediocre 5 out of 9 ("started the journey") on the WWF scorecard. Wendy's uses palm oil in its North American restaurants for "a few non-core menu items" such as its breaded fish and breakfast biscuits, according to a statement on the company's website. Wendy's "is working to have a plan in place" to source sustainable palm oil for its North American restaurants by 2022, the company said in an e-mailed statement. "We're committed to sourcing palm oil from responsible and sustainable sources."

Pedestrians look at a smart device in the Marina Bay district as buildings in the central business district stand shrouded in smog in Singapore.

Singapore's Marina Bay district shrouded in smog on Sept. 24, 2015.

Photographer: Nicky Loh/Singapore

Yum! Brands. The UCS put the company among its worst offenders and the parent of KFC, Pizza Hut and Taco Bell got no grade from WWF, which said Yum was one of a small group of companies that didn't respond to its request for information. "We recognize that not responding to the WWF Palm Oil Scorecard Survey results in a default score of zero," Yum vice president for public affairs Laurie Schalow said in an e-mailed statement. "However, this score does not represent our commitments and progress." Yum plans to stop using palm oil as cooking oil and source sustainable palm oil by the end of next year. 

Target. The Minneapolis-based retailer did poorly on WWF's scorecard, getting only a 2 out of 9 - meaning the company is "not yet in the starting blocks," according to the WWF. Last year, UCS gave Target a zero, but since then "Target has set a commitment to traceable and sustainable palm oil," the company said in an e-mailed statement. The big-box retailer set a 2018 deadline for sourcing sustainable palm oil for its own-brand foods as well as its personal-care and household-cleaning products. According to a statement on its website regarding its sourcing policy, Target said it "will work actively with its vendors, suppliers, and other stakeholders to implement our policy and to remove all unacceptable sources of palm oil, where required." 

Costco Wholesale. Another big-box retailer that flunked WWF's test is Costco, which got a 2. UCS gave the company a zero. All of the company's Kirkland Signature-brand suppliers of palm oil must implement policies that include a no-burn policy for clearing of land and a ban on new development of peatlands, Costco announced in September 2015,  and use only certified sustainable palm oil by 2021. The League of Conservation Voters responded with a letter-writing campaign to pressure Costco to move faster. The deadline of 2021 "is too far away and out-of-line with the deadlines announced by other retailers in the industry," the League said. Costco "is committed to ensuring that the palm oil contained in our Kirkland Signature products is responsibly and sustainably sourced," the company said in a policy statement published in September 2015.

Clorox. Out of ten makers of soaps, cosmetics and other personal-care products graded by the UCS, only Burt's Bees parent Clorox got a score of zero. Since then, the company (which wasn't on WWF or Greenpeace's scorecards) has updated its policy, saying all suppliers have until 2020 to adhere to requirements to protect rainforest and peatlands. Among the new criteria, Clorox will prohibit suppliers from using fire to prepare or clear land.  In July, Clorox joined the Forest Trust and is working with the NGO to trace the palm oil of a dozen major suppliers back to mills where they produce the oil. At that point, according to Clorox, "we can begin to understand regions where the palm is being grown and the risks in those regions." 

A worker sorts bunches of harvested oil palm fruit on a truck as haze surrounds the area in Riau Province, Indonesia.

A worker sorts bunches of harvested oil palm fruit on a truck as haze surrounds the area in Riau Province, Indonesia.

Photographer: Dimas Ardian/Bloomberg
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