Palm Oil and other Commodities

Key takeaways

  1. Sourcing palm oil and similar commodities have many negative impacts on both the environment and society. Therefore, a company either producing such a commodity or a company sourcing it must be addressed in an analysis.

  2. In your analysis, discuss how large of a supplier or producer of the commodity the company is to contextualise its impact.

  3. Remain critical, as there are limitations with certifications.

What are they?

Palm oil is extracted from palm trees in tropical areas in Asia, Africa and Latin America. This oil is mainly used for cooking, but also in food products, detergents, cosmetics and biofuel. Interestingly, more than half of all packaged products consumed by Americans contain palm oil; it can be found in lipstick, soaps, detergents, and ice cream.

The large production and consumption of palm oil has put pressure on ecosystems, species and local communities.

Other commodities such as soy and timber also threaten biodiversity and people.


SDG choice

SDG 15

Impact assessment

In your analysis, you should discuss how large of a supplier the company is to contextualise its impact.

If the company is producing the commodity: What is their market share in the commodity industry? How much do they produce per year (in tonnes)? What per cent is claimed to be RSPO certified?

If the company is sourcing the commodity: How many suppliers do they have? How large are those companies? How much do they purchase/consume per year (in tonnes)? Knowing specifically for each supplier is a plus. What per cent is claimed to be RSPO certified?

Describe the scale of the impact by taking into account:

1/ The breadth of the impact

  • Is the impact local, national, or global?

  • How many areas/regions/countries are concerned?

2/ The depth of the impact

  • Is the local ecosystem deeply affected, or marginally impacted by the issue?

  • Are the changes brought by the issue profoundly changing the environment?

3/ The persistence of the impact

  • How long would the impact described last for? Months? Years? Decades?

  • How reversible is the impact described in the impact analysis? Can it be easily stopped/extended?

  • RSPO certification is certainly a good step for companies to take. However, it’s essential to be critical of this certification (like any). This resource sheds some light on the issues with RSPO certified palm oil:

  • Palm oil and similar commodities can also be linked to unfair wages, forced labour and deforestation. If you would like to cover these topics, please do so in a separate analysis.

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