Palm Oil

P&G is committed to no deforestation in our sourcing of palm oil, palm kernel oil, and derivatives.

Goal Overview

P&G’s new goals call for ensuring no deforestation in its entire palm supply chain. Specific commitments include:

  1. Establish traceability of palm oil and palm kernel oil to supplier mills by December 31, 2015.
  2. Ensuring no deforestation in the palm supply chain to plantations by 2020.
    • For palm oil, require suppliers to submit plans by December 31, 2015 that demonstrate how they will ensure no deforestation in the supply chain for their mills by 2020.
    • For palm kernel oil, begin investing in and working with small farmers, with the aim of improving their practices to ensure no deforestation in the supply chain by 2020.
  3. Working with suppliers, industry peers, NGOs, academic experts and other stakeholders to promote consistent industry standards and practices for sustainable palm oil sourcing.
  4. Continuing to support universal human rights as outlined in P&G’s existing Sustainability Guidelines for Suppliers, and to support the rights of indigenous people.
  5. Reporting annually on progress toward achieving these goals.

Details on our Palm Oil Policy

Palm Oil is an important and versatile vegetable oil which is used as a raw material for both food and non-food industries. Palm is a highly productive crop, requiring much less land use than alternatives, and can contribute to economic development and poverty alleviation in regions where it is produced. These positive attributes have driven a significant increase in the global demand for palm oil and led to rapid expansion of palm plantations. In some regions of the world, the rapid expansion of palm oil production has threatened environmentally sensitive areas of tropical forests and peat lands, and has resulted in some incidents where the rights of workers and indigenous peoples have been infringed.

P&G uses relatively little palm oil, but we do use a by-product of palm oil production called palm kernel oil. Our combined use of Palm Oil, Palm Kernel Oil, and derivatives of each represents <1% of worldwide production. While our overall use is small, we recognize our responsibility to ensure our sourcing of palm derived materials does not contribute to deforestation or infringe upon the rights of workers and indigenous peoples.


Our Commitment

P&G is committed to ensuring that our sourcing of palm oil, palm kernel oil, and derivatives does not contribute to deforestation and respects the rights of workers and indigenous peoples.

P&G is a member of the Roundtable on Sustainable Palm Oil (RSPO) and we will continue to support RSPO standards as a key mechanism to drive responsible palm practices across the industry. Given the continued pressure on forests and peat lands, we recognize the need to take additional steps beyond RSPO to confirm the palm derived materials we purchase are not contributing to deforestation. Therefore, to ensure no deforestation in our palm supply chain, we will:

  1. Develop a traceable supply chain
  2. Ensure our suppliers meet RSPO criteria and can ensure:
    • No development of High Conservation Value (HCV) areas and High Carbon Stock (HCS) forests.
    • No new development of peat lands regardless of depth.
    • No burning to clear land for new development or replanting.
    • They meet expectations of P&G’s existing Sustainability Guidelines for Suppliers.
    • Respect for human and labor rights.
    • Respect land tenure rights, including rights of indigenous and local communities to give or withhold their free, prior and informed consent for development of land they own legally, communally or by custom.
  3. Work with suppliers, industry peers, NGOs, academic experts, and others stakeholders to promote consistent industry standards and practices in palm oil sourcing with the aim of achieving full traceability and eliminating deforestation.

Our Actions

To ensure we drive measurable progress against the commitments outlined above, we will take the following actions.

  1. Palm Oil and Palm Oil Fractions
    The following actions will apply to our purchases of palm oil and palm oil fractions:
    • We will establish traceability to palm oil mills by December 31, 2015.
    • We will require suppliers to submit plans by December 31, 2015 to demonstrate how they will ensure no deforestation in their supply chain by 2020.
    • As we advance progress against the goals above, we also will continue to purchase 100% RSPO certified palm oil.
  2. Palm Kernel Oil
    The following actions will apply to our purchase of palm kernel oil:
    • We will establish traceability to palm kernel oil mills by December 31, 2015.
    • We will invest in and work with palm kernel oil suppliers, and the smallholders who supply them, with the aim of improving both practices and livelihoods to establish zero-deforestation in our supply chain by 2020. We will work quickly over the next six months to define the details of this approach and will then communicate our plans.
  3. Palm Oil Derivatives and Palm Kernel Oil Derivatives
    • We will require suppliers to put forward time-bound plans by end of 2016 to demonstrate how they will ensure no deforestation in their supply chains.
  4. We will continue to work with the Consumer Goods Forum and other stakeholder groups to promote efforts for consistent industry standards and processes aimed to achieve traceability and eliminate deforestation.
  5. We will report progress on each of these targets at least annually via our sustainability report.

Palm Oil Q&A

Why does P&G use palm oil?

Palm Oil is used broadly across the consumer products industry as a high quality, cost effective, versatile oil that can used in a wide variety of food, personal care, and cleaning products. According to the World Wildlife Fund, palm oil is used in about 50% of all packaged food products in supermarkets today. Palm is a highly productive crop, requiring much less land use than alternatives, and can contribute to economic development and poverty alleviation in areas where it is produced. While expansion of palm production to meet increasing global demand has raised real concerns regarding deforestation, when produced and managed responsibly, palm production can have positive economic, social, and environmental results.

What P&G products contain palm oil?

We use very little actual palm oil in our products, but derivatives and by-products of palm oil are found in a variety of our beauty and household care products such as detergents, shampoos, hand and body cleansers, bar soaps and color cosmetic products.

How much palm oil does P&G use?

P&G uses relatively little palm oil, but we do use a by-product of palm oil production called palm kernel oil. Our combined use of palm oil, palm kernel oil, and derivatives of each is still <1% of worldwide production.

Where does your palm oil come from?

P&G buys its palm oil, palm kernel oil, and derivatives from a variety of responsible sources. The vast majority of our palm derived materials (> 70%) comes from Malaysia. Other sources include Indonesia and Central/South America.

You have established different goals for palm oil, palm kernel oil, and derivatives. Why?

Palm oil, palm kernel oil and the derivatives of each have different levels of complexity in their supply chains. P&G is steadfastly committed to overcoming this complexity by working with suppliers to drive traceability through our entire supply chain – first to supplier mills and then to the source plantations. The individual goals and timelines for palm, palm kernels and derivatives were set based on the inherent complexity of their supply chains.

P&G is committing to work with palm kernel oil suppliers and the small holders who supply them to improve practices and livelihoods to ensure no deforestation. Can you share any more details on that?

We have already begun working with industry leaders, local suppliers and academic experts on this complex issue. Our initial focus will be to work with individual palm kernel oil suppliers, small holders, and regional supply chain experts to understand and address interventions needed to meet Roundtable for Sustainable Palm Oil criteria and encourage use of best management practices which can increase yields and improve livelihoods. We will have a more detailed plan with timelines developed in the next six months.

How do you define “high conservation value” areas?

High Conservation Value areas contain items of biological, social, or cultural value that are important to conserve, including rare, threatened, and endangered species and their habitat. Please visit www.hcvnetwork.org for more information.

How do you define “high carbon stock forests?”

There are a number of organizations currently developing and researching assessment methods to identify and assess high carbon stock forests in palm sourcing regions. Golden-Agri Resources, The Forest Trust, and Greenpeace are currently piloting one such effort for tropical forests of Indonesia and plan additional testing and fieldwork to advance their method. We intend to stay actively engaged with the stakeholders who are working to advance the science in this area.