Working with suppliers

Effective engagement with suppliers will be crucial in helping us meet our sustainable palm oil target.

Our approach

Unilever is committed to the highest sustainability and environmental standards, and we work closely with our suppliers to encourage best practice.

Unilever has its own Code of Business Principles and Unilever’s Supplier Code outlines the required standards and behaviour for our suppliers. This Code sets out our expectations of all our suppliers in key areas such as health and safety at work, business ethics, labour standards, consumer safety and the environment. Through our Sustainable Agriculture Code we ask all our suppliers of agricultural raw materials to commit to improving their sustainability over time.

Building on the RSPO's Principles & Criteria (P&C) as a foundation, the Unilever Sustainable Palm Oil Sourcing Policy is designed to drive market transformation by working with key suppliers and the industry to focus on a halt to deforestation, protect peat lands and drive positive economic and social impact for people and communities. For Unilever it is important that our consumers and customers have the confidence that the palm oil used in our products has been sustainably sourced from known and certified sources. The Policy, published in November 2013, is available as a download.

All our major suppliers of palm oil are members of the Roundtable on Sustainable Palm Oil. Details of which palm oil suppliers have RSPO certification can be found on the RSPO website (see Related links).

How do we address concerns with our palm oil suppliers?

We seek to constructively engage with our suppliers in order to achieve sustainable practices across the industry. So far, we have found that our key suppliers are committed to making this change happen.

When allegations about unsustainable practices are made, these are investigated, and – if proven right – we work with our suppliers to correct them. We believe it is better to work with suppliers as a first step to persuade them and help them to move to more sustainable agricultural methods. We successfully implemented this approach in the fishing industry and more recently in tea production, with the launch of products using tea from Rainforest Alliance Certified™ farms. However, we will always take a firm stance with those suppliers that do not comply.

Engaging with NGOs to improve supplier practices

In April 2008 Greenpeace issued a report accusing our suppliers of palm oil of “fuelling climate change” by clearing forests and draining peat lands. The report, entitled How Unilever Palm Oil Suppliers are Burning Up Borneo(Link opens in a new window), claimed that some of our suppliers were involved in unacceptable practices such as clearing peat lands and encroaching on orang-utan habitats while not having the required legal permits. Greenpeace demanded that Unilever stop trading with palm oil suppliers involved in rainforest destruction.

To check the validity of Greenpeace’s claims, we commissioned an independent study to verify the allegations. We asked Eric Wakker of Aidenvironment to lead this effort. Aidenvironment is an independent not-for-profit consultancy advising private and public organisations. The study, published in 2009, concluded that the Greenpeace report was broadly accurate. We shared the findings with our suppliers and urged them to address the shortcomings.

Read the Aidenvironment study, Verification of the Greenpeace report ‘Burning up Borneo’ in the download section on the right.

Following further allegations from Greenpeace in December 2009 in relation to one particular supplier, we decided to suspend future purchases of palm oil from that company (PT SMART, part of the Sinar Mas group) until they can provide verifiable proof that none of their plantations are contributing to the destruction of ‘high conservation value’ forests or expanding onto peat lands.

In February 2011, Golden Agri-Resources (the oil palm holding company of parent company Sinar Mas) announced that it had agreed to a new code of practice aimed at conserving carbon-rich forests and peatlands in Indonesia, in partnership with not-for-profit group The Forest Trust. The agreement means the company will not develop plantations on high carbon stock forests or any peat lands or forests with 'high conservation value'.

Greenpeace has responded by saying that this agreement could encourage other palm oil producers to adopt similar agreements, but only if Golden Agri-Resources takes prompt and thorough action to ensure it meets its commitments. We welcome this move by Golden Agri-Resources and will monitor closely its progress in implementing its new commitments.