Unilever discloses complete palm oil supply chain

Will Green is news editor of Supply Management
19 February 2018

Unilever hopes to start an “industry-wide movement” by publicly disclosing the suppliers and mills where it sources palm oil.

The firm claims it has become the first consumer goods company to declare where it sources the commodity, both directly and indirectly, and it wants to “drive positive change in the palm oil industry”.

“The palm oil supply chain is long and complex, with the palm oil changing hands many times before it reaches our factories,” said Unilever.

“The fruit is grown on plantations where farmers sell their produce to middle men and agents. They in turn supply it to a mill where the fruit bunches are processed. Next it is transported via traders to refineries for further processing. Only after this point does it enter our direct supply chain.

“Transparency and traceability are important as we can only effectively address the systemic issues associated with how palm oil is cultivated and produced – such as deforestation and human rights abuses – if we know exactly where the problems are.”

Unilever said it had mapped more than 1,400 mills and over 300 direct suppliers.

Marc Engel, chief supply chain officer, said: “Due to traditional commercial sensitivities and the complexity of the palm oil supply chain, it has required perseverance to get to where we are now.

“We are every proud to be the first consumer goods company to take this step. Unilever believes that complete transparency is needed for radical transformation. We want this step to be the start of a new industry-wide movement.”

CEO Paul Polman said at Davos: “A lot of people think if you outsource your value chain you can outsource your responsibilities. I don’t think so.

“We need to be at the forefront of change. This is why Unilever is committed to greater transparency and continues to work with our partners to drive positive change in the palm oil industry.”

As part of a wider transparency initiative, Unilever has also disclosed its fragrance ingredients for home care and personal care products in the UK and France, down to 0.01% of the product formulation. The company plans to roll out the policy across Europe in 2018.

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