The purpose of today’s presentation is to highlight the issues surrounding retail of products containing palm oil. You may be aware that our company has been ranked very close to the bottom of WWF (World Wide Fund for Nature) Scorecard for Palm Oil Buyers. This has been recently highlighted in the national press. The article has brought up to the public’s attention that our company is not working towards introducing certified sustainable palm oil into our products. Damage of our reputation has been reflected in sales and board of directors is keen to introduce changes to improve our position in the ranking and consequently reassure customers that we take our corporate responsibility towards the environment seriously. Environmental impact of palm oil
To fully understand the need for change it is important that we look closely at the environmental impact of palm oil production. Palm oil is derived from the pulp of the oil palm tree. Agricultural industry behind palm oil has been directly implicated for a wide range of environmental problems. Palm oil plantations have been identified as a leading cause of deforestation in Malaysia and Indonesia.1 A recent study has shown that oil palm plantations were responsible for 44% of rainforest loss in Indonesia. Replacing the natural variety of plant species within a rainforest with a monoculture of palm trees creates a ‘biological dessert’, unable to sustain varied animal wildlife. It has been shown that plantations provide habitat to only 20% of the pool of animal species previously inhabiting the rainforest in the given area.2 Animals that has been identified as being particularly under threat as a result of fragmentation of their natural habitats by palm oil plantations include rhinoceros, tigers, orang-utans and elephants. Palm oil plantations play a role in global warming in a number of ways. Destruction of rainforests reduces their capacity to absorb carbon dioxide from the atmosphere. Furthermore forest fires create large amounts of carbon dioxide. Air is also polluted with other harmful gases and ashes. It has been estimated that almost 20% of greenhouse gases emission is associated with deforestation.1 Plantations also pollute soil and water with pesticides such as paraquat, which has been shown to impact not only on wildlife but also health of local communities. Untreated palm oil mill effluent consisting of a mix of water, crushed shells and fat residue is often released directly into rivers leading to devastation of aquatic wildlife.2 Social impact of palm oil
Palm oil is said to be an important source of income linked with improved quality of life for rural communities in Malaysia and Indonesia. However introduction of palm oil plantations creates problems for local, indigenous communities. Small scale family farmers are forced to surrender the land that they have been cultivating for years and become plantation workers. They are often underpaid and working in difficult conditions as developers concentrate on profits rather than wellbeing of the local workers and their communities. In addition income of farmers working on export orientated monocultures becomes heavily dependent on fluctuations of the international market.3 Those issues are closely linked with environmental impact of plantations. Small family farmers cultivating varied crops on rotational basis can easily coexist with native wildlife. They cannot however compete with big corporations, which have strong government support. Key challenges in relation to sourcing palm oil
It may appear that the solution is simple. Stop stocking palm oil. However you may be surprised to discover just how wide the range of products that contain palm oil is. According to WWF 50% of packed food products contain palm oil.1 It has been estimated that overall 10% of all products available on the typical supermarket shelf contain some form of palm oil.2 Palm oil widely used by food industry in manufacturing of cakes...