Rooted in conviction

Palm Oil (PO) is an important, versatile and highly efficient vegetable oil that is used as a raw material by both food and non-food industries. In some regions of the world, the rapid expansion of PO production has threatened environmentally sensitive areas of tropical forests and peat lands and has resulted in incidents where the rights of independent smallholder farmers and indigenous peoples have been infringed.


While we do not use a large amount of palm oil, we do use a byproduct called palm kernel oil (PKO). We are 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. We are members of the Roundtable on Sustainable Palm Oil (RSPO) and support their standards to drive responsible palm practices across the industry. In addition, we have established a robust approach to ensuring the responsible sourcing of PO, PKO and its derivatives via a three-pillar program:


  1. Supplier Management

  2. Smallholder Program

  3. Industry Influence



Palm Oil Procurement Policy

P&G is committed to ensuring our suppliers meet RSPO Principles and Criteria (P&C) and have the necessary policies and procedures in place to ensure:


  • No development of high conservation value areas and high carbon stock forests*
  • No new development of peat lands regardless of depth
  • No burning to clear land for new development or replanting
  • Compliance with P&G’s existing Sustainability Guidelines for External Business Partners
  • Respect for human and labor rights
  • Respect for 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

If we find a supplier is violating any of the above requirements, and if that supplier does not acknowledge and resolve the concern, P&G will suspend or eliminate palm oil purchases from that supplier. A supplier would need to have a documented action plan and demonstrate meaningful progress to be considered for reinstating supply agreements.


Progress

P&G has successfully met all our initial palm oil goals. These include:

  • Establishing traceability of palm derived materials to palm oil mills (for palm oil) and kernel crushing plants (for palm kernel oil).
  • Requiring all suppliers to submit relevant policies, procedures, and action plans to demonstrate how they will meet our sourcing requirements. Review of initial plans resulted in P&G moving supply away from suppliers who did not have adequate plans in place.
  • Maintaining 100% RSPO certification for palm oil purchases.
  • Improving the lives of the smallholders in our PKO supply - Initial pilot projects with smallholders resulted in significant increases in palm fruit yields for smallholders.

We are proud of our progress on Palm Oil and our intent is to move to 100% RSPO SG Palm Oil by the end of 2018. Our ability to achieve that may be influenced by broader market dynamics and supply availability, but we have already engaged with our suppliers on plans to achieve this goal. This is consistent with our belief that it is the demand for palm oil that is driving forest conversion and peat land pressures and the greatest impacts can be achieved by industry placing a disproportionate focus on driving sustainable palm oil production practices across all categories and regions that use palm oil.

Have questions about Palm Oil? Read through our FAQs.


* As a member of HCSA Steering Group, we support the HCS definition and application of the HCS assessment methodology outlined in the HCS Approach Toolkit 2.0 to implement our supply chain policy.

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