Buyers cite price of sustainable palm oil among deterrents when sourcing for CSPO
PETALING JAYA: Regional palm oil buyers have cited the price of sustainable palm oil, lack of consumer awareness and demand for certified sustainable products as deterrents when sourcing for certified sustainable palm oil (CSPO).
The latest findings were revealed in the WWF Palm Oil Buyers Scorecard – Malaysia and Singapore 2017 report released yesterday.
In the first half of the year, WWF submitted questionnaires to 47 companies headquartered in Malaysia and Singapore, and asked them about their core actions and commitments in sourcing for sustainable palm oil.
The report pointed out that there was a perception among companies across Malaysia and Singapore about the increased cost related to sustainability practices.
“Yet, those in the initial stages of sourcing sustainable palm oil find that the cost of purchasing CSPO through the Roundtable on Sustainable Palm Oil (RSPO) credits is almost negligible.
“Companies moving towards 100% CSPO also will find that the benefits can significantly outweigh any reputational risks and supply chain disruptions due to labour or environmental reasons,” the report added.
In addition, the lack of consumer awareness and demand for sustainable palm oil have been frequently cited by companies as a reason for not procuring sustainably.
Yet, research has shown that consumers were willing to pay up to 10% more for sustainable products, especially those not linked to haze and deforestation activities.
Currently, the global production of CSPO stands at 11.71 million tonnes, of which Indonesia accounts for 51%, Malaysia (42%), Papua New Guinea (5%), Columbia (1%) and Brazil (1%).
Given the variety of options available for certified palm oil, the report said it would be cost and time-effective for a company to start with the first step by purchasing CSPO through the book and claim or mass balance platforms.
“Joining the RSPO and making a timebound public commitment on CSPO ensures full accountability to customers and shareholders.
“More progressive companies with experience in sustainable palm oil sourcing should continue to increase the transparency of their supply chains.
“They can do this by working towards sourcing 100% physical palm oil, through the segregated or identity preserved palm oil purchase models.” added WWF.
WWF also encouraged all companies to join the national dialogue platforms such as the South-East Asia Alliance on Sustainable Palm Oil and the Sustainable Palm Oil Community Malaysia.
Of the 47 companies across Malaysia and Singapore that were contacted by WWF, only 16 companies disclosed information on their palm oil usage.
Out of the 16 companies, half scored points while the remaining reported no action taken to support the use of sustainable palm oil.
The top-three performers were Denis AsiaPacific, the producer and marketer of Ayam Brand products, followed by Wildlife Reserves Singapore Group, which manages Singapore’s zoological institutions, and MAMEE Double-Decker (M) Sdn Bhd, a manufacturer and marketer of instant noodles and snacks.
Despite the availability of 100% certified palm oil, WWF said most businesses in Malaysia and Singapore were still not sourcing it.
A comparison of companies in Malaysia and Singapore against their international peers showed a significant gap in sustainable sourcing standards across South-East Asia. There was also a distinct lower level of transparency, number of RSPO memberships and sustainable palm oil commitments among these companies.