Palm Oil

Palm oil is the world’s most widely used vegetable oil with a broad range of applications across Food, Household, and Beauty categories and growing usage within biofuels. Because of its neutral flavour and aroma and great cooking properties it is incredibly useful and versatile. Another benefit is its ability to remain solid at room temperature without undergoing hydrogenation that makes it a healthier choice compared with many other vegetable and animal fats.

Palm oil has the highest productivity of all vegetable oils needing less than half the land required by other crops to produce the same amount of oil. This efficiency and adaptability generated an enormous increase in demand over the last few decades that led to unacceptable practices such as high levels of tropical deforestation and peatland drainage, and human rights abuses on plantations and mills. Although deforestation rates are slowing, palm oil related land use change remains a major contributor to global greenhouse gas emissions.

However, palm oil has brought prosperity to many regions and continues to provide a pathway from poverty for millions of people in developing countries. Palm oil’s very high reliance on smallholder production (c. 40% of global palm oil comes from small farmers) makes finding the right solutions to palm oil disputes as much a priority for human development as environmental protection.

Palm oil is produced exclusively in tropical regions where according to the International Institute of Sustainable Development (IISD) 89% of global production comes from Indonesia and Malaysia. India and China comprise 30% of consumption, Malaysia and Indonesia 27% and the EU 13%. The vast majority of demand for palm oil certified by the Roundtable on Sustainable Palm Oil (RSPO) comes from the EU. At the moment only 20% of palm oil production is RSPO certified and there is a need for markets beyond the EU to demand sustainable palm oil if certification is to have a widespread impact on practices. RSPO criteria aims to guarantee conservation of natural resources and biodiversity and support local communities and is the most used certification programme in the palm oil industry.

Commitments and targets

M&S is committed to sourcing palm oil in a socially and environmentally responsible manner. Our goal is to ensure that all palm oil used in our products is produced by companies that don’t contribute to deforestation and that ensure local communities and workers in the palm oil industry are protected.

We aim to ensure zero deforestation from the use of palm oil in the production of M&S products by 2020.

Approach

We are concerned about the role of palm oil expansion in the loss of the world’s tropical rainforests and about the impact of deforestation on biodiversity, endangered species and climate change. Palm oil development can undermine the rights of indigenous communities to convert or not convert their land, and there is evidence of human rights abuse within palm oil plantations and mills.

Nonetheless we recognise the enormous contribution palm oil can make to social development and support solutions that seek to find a balance between achieving conservation outcomes while maximising human livelihood improvements. We can best protect our natural environment by ensuring communities and countries derive benefit from conservation efforts.

Our supply chain is complex. We don’t own farms or factories and don’t purchase ingredients directly. Most of the ingredients that go into our products are sourced in a global market. That said, in comparison to many others in our industry we are also a relatively low user of globally traded palm oil. Palm oil is often less than 1% of the finished product and many of our suppliers use only a few tonnes of palm oil annually. Nonetheless we expect every party in our supply chains to contribute towards promoting sustainable palm oil.

M&S engages with a wide range of multi-stakeholder and industry platforms to ensure our knowledge remains up to date in this rapidly evolving landscape, and to ensure that the characteristics of retail supply chains are recognised so our sector can play a full and active part in addressing the impacts of palm oil production.

We’re also engaging in global efforts to tackle deforestation. We support the Consumer Goods Forum’s resolution to achieve zero net deforestation by 2020. In addition, we are a signatory of the UN Climate Summit New York Declaration on Forests which aims to cut natural forest loss in half by 2020 and strive to end it by 2030. We are also a member of the World Economic Forum’s Global Agenda Council on Forests which sought to influence the Conference of the Parties in Paris (COP21) on tackling commodity-driven deforestation.

Our approach to sourcing more sustainable palm oil is as follows:

Establishing and maintaining minimum standards and understanding how palm oil is used within our products and engage suppliers to support the production and procurement of sustainable palm oil

Minimum Standards

We have adopted the Roundtable on Sustainable Palm Oil (RSPO) as our minimum global sustainability standard for palm oil.

RSPO certification is the only mainstream way to source sustainable palm oil. Whilst the Rainforest Alliance also has a standard for sustainable palm oil, only tiny volumes are available on the market.

Despite our commitment to RSPO, we recognise that gaps exist in the RSPO standard relating to the protection of high carbon value forest, peatland and exploitation of workers and indigenous communities. We have therefore developed additional criteria that must be met by palm oil suppliers as a condition of participating in the M&S supply chain.

All palm oil must be:

RSPO certified with supply chain certification to final ingredient or product manufacturer; and
Purchased from First Importers of palm oil who meet the following standards:
- Not contribute to clearance of high carbon stock (HCS) forests
- Not contribute to peatland expansion (regardless of depth), and use best management practices for existing plantations on peat
- Be traceable from refinery to extraction mill and from validated Fresh Fruit Bunches (FFB) sources
- Protect human rights in line with M&S Global Sourcing Principles

These standards will be delivered through the following approach:

M&S requires all direct suppliers to report on their use of palm oil by volume, supply chain, and certification status.	This allows M&S to understand whom our suppliers buy from and ensure that upstream suppliers meet M&S standards. Our aim is to trace our supply chains to First Importers (the companies importing the palm oil from palm growing countries into Europe).
First Importers will have their compliance managed directly by M&S.	M&S expects zero deforestation commitments to apply to all the palm oil produced or traded by First Importers (i.e., at a Group level). If First Importers' do not meet M&S standards they will not be authorised for use in the M&S supply chain. We prioritise managing our Food and Household supply chains with an aim of extending this approach to Home and Beauty supply chains.

In 2017, all palm oil used in M&S products met the RSPO standard with 97% being physically certified and the remainder covered by Book and Claim certificates. Our Food products were almost 100% RSPO certified, and we have worked hard to achieve similar levels of coverage across our Non-Food product ranges that comprise circa 11% of M&S palm oil usage.

M&S will continue to buy RSPO GreenPalm certificates to cover volumes that are not physically certified, thereby creating an incentive for suppliers to move towards RSPO certification, however our ultimate goal is that all our physical use of palm oil be RSPO certified. M&S buys GreenPalm certificates on behalf of our suppliers unless the supplier has their own voluntary commitment to GreenPalm.

Find out more about how we're performing against our palm oil policy.

Supply Chain Tracking

Palm oil is a highly adaptable ingredient that can be used in its simple form as a cooking fat, or it can be processed to deliver specific functionality within products. This means that supply chains are often complex and can include specialist ingredient and derivative suppliers, and regional distribution networks. M&S addresses all usage of palm oil, no matter how small the volume. Around 120 M&S suppliers use palm oil with many using very small volumes (approx. 20% of suppliers use less than 1 tonne per annum and only ten suppliers use more than 100 tonnes pa).

We ask all our suppliers to report annually on their usage of palm oil, where it comes from (to refinery) and whether it is certified or not. We use this information to engage major importers who have much greater influence over traceability and production than we do, and to ensure that their practices match our goals and commitments.

Supporting market transformation through working with industry partners, standard setting organisations and other stakeholders

Roundtable on Sustainable Palm Oil

The Roundtable on Responsible Palm Oil is a global, multi-stakeholder initiative that aims to support palm oil that is economically viable, socially equitable and environmentally sound. It provides civil society and businesses with the opportunity to jointly develop systems that lead to responsibly grown palm oil.

Between 2010 and 2018, M&S also sat on the Board of Governors of the RSPO. As members we continue to participate to ensure RSPO evolves to meet the needs of our customers and other stakeholders. It also gives us an opportunity to understand challenges faced by producers, large companies and smallholders alike and to work collaboratively to make the RSPO a strong and credible option for all parties in the palm oil supply chain.

M&S committed to 100% RSPO certified palm oil and has made great progress towards achieving this goal (see Minimum Standards above).

We also prepare RSPO Annual Communications of Progress which are submitted to RSPO each year. Copies of our submissions are available here.

Retail Palm Oil Group

The Retail Palm Oil Group (RPOG) is a non-competitive coalition of Retail Companies with a common aim of promoting the adoption of sustainable palm oil. Currently the Group’s members trade in every continent, although there is a predominance of companies with head offices based in Europe. M&S is not a formal member of this Group due to RSPO rules that prohibit any Board member having dual representation, however we participate informally but actively in all RPOG forums and discussions.

Retail Palm Oil Transparency Coalition

Members of the Retail Palm Oil Group created the Transparency Coalition to develop approaches to manage issues not covered by the current RSPO standard. The Coalition is developing tools to hold palm oil importers accountable for achieving zero deforestation commitments.

Consumer Goods Forum Palm Oil Working Group

The Consumer Goods Forum (CGF) has made a commitment to achieve zero net deforestation by 2020. M&S co-chairs both the Sustainability Steering Group and the Palm Oil Working Group.

In 2015, after extensive stakeholder consultation, this group launched the CGF Palm Oil Sourcing Guidelines to create a pathway for different shapes of consumer goods manufacturers and retail companies to increasingly use sustainable palm oil. These guidelines will be reviewed and amended in response to developments in research, markets and government participation.

The Palm Oil Working Group engages a broad range of stakeholders including NGOs active within palm oil producing regions, to understand and respond to emerging issues related to palm oil production.

Tropical Forest Alliance

M&S is a member of the Tropical Forest Alliance 2020, a global public-private partnership that aims to reduce tropical deforestation associated with commodities such as palm oil, soy, beef and paper & pulp. Its approach is to foster cross-sector collaboration based on a common and ever deepening understanding of the barriers and opportunities linked to deforestation free supply chains. It aims to create a partnership of champions for deforestation-free global and local economies, making the case for sustainable supply chains as an essential pathway towards a better economy and achievement of the Global Goals.

Supporting the development of tools and approaches to improve land use mapping, governance and enforcement within high-risk production regions

Palm Oil Traceability Working Group

As part of their objective to make trade more sustainable, IDH convened a group of palm oil industry players (producers, traders and buyers) to define traceability, key milestones, risk assessment indicators and verification approaches to achieve a harmonised approach to palm oil traceability systems. M&S participates in this group’s discussions, ensuring that the needs of retail companies are understood and reflected in its outputs.

Jurisdictional (whole landscape) approaches

M&S participates in ad-hoc forums and debates that seek to progress a landscape-based approach to governance of key risks such as deforestation.

For example, through our work within the Consumer Goods Forum we are closely aligned to the Tropical Forest Alliance (TFA), a partnership of government, private sector and civil society organisations to remove deforestation from commodity supply chains. TFA co-ordinates programmes to improve sub-national jurisdictional governance of commodity production. M&S participates in TFA events and discussions to make market support for these innovative approaches transparent.

Working with others

Listening, learning, responding and working in partnership is an important part of how we do business.

We are working with a number of industry and civil society organisations to tackle the causes of deforestation and promote the benefits of more sustainable palm oil. Outlined in more detail above, through the Consumer Goods Forum and World Economic Forum we’re engaging in global efforts to tackle deforestation. We’re also collaborating with the Roundtable on Sustainable Palm Oil (RSPO), the Retail Palm Oil Group, IDH, and the Tropical Forest Alliance in support of our goal to remove commodity-driven deforestation.

Key documents

Food Technical Terms of Trade SEPTEMBER 2015

M&S Global Sourcing Principles AUGUST 2015

Palm Oil

Find out more about our approach to sourcing palm oil

Establishing and maintaining minimum standards and understanding how palm oil is used within our products and engage suppliers to support the production and procurement of sustainable palm oil

Supporting market transformation through working with industry partners, standard setting organisations and other stakeholders

Supporting the development of tools and approaches to improve land use mapping, governance and enforcement within high-risk production regions