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Sustainable palm and palm kernel oil production

Our understanding of sustainability and corporate social responsibility covers the entire value chain – including the production of raw materials and the conservation of natural resources. When using renewable raw materials such as palm and palm kernel oil, we take economic as well as ecological and social impacts into consideration.

  • Palm and palm kernel oil
  • Our use of palm and palm kernel oil
  • Our goals
  • Ongoing dialog
  • Why we are using Mass Balance palm and palm kernel oil
  • Why we are supporting local initiatives

Palm and palm kernel oil are both derived from the fruit of the oil palm. Palm oil, which comes from the flesh of the palm fruit and represents 90 percent of the plantation yield, is an important raw material for the food industry.

Palm kernel oil, on the other hand, is extracted from the seeds of the palm fruit and accounts for the remaining 10 percent of the plantation yield. Palm kernel oil is an important raw material for surfactants, an active washing substance in laundry detergents and household cleaners as well as cosmetic products.

At Henkel, we use less than 0.2 percent of the palm and palm kernel oil produced worldwide. The majority is palm kernel oil used for surfactants purchased from our suppliers.

Though we are at the end of a long supply chain, we strive to ensure that whenever palm and palm kernel oil are used in our products, they are derived from sustainably cultivated sources. For this reason, Henkel actively supports the development of sustainable palm and palm kernel oil supply chains.

We are committed to zero net deforestation by 2020. This means that palm and palm kernel oil that we use should not contribute to deforestation of primary or secondary forests with significant ecological value. This includes “High Carbon Stock” forests and peat lands.

We seek to drive physical progress in the palm and palm kernel oil value chain, so as to prevent deforestation. We have come to the conclusion that purchasing Book & Claim certificates only will not be sufficient to prevent deforestation.

We are working with our partners to establish full traceability of palm and palm kernel oils used in ingredients for our products, such as surfactants, by 2020. We aim to ensure that all palm and palm kernel oil that we purchase is being cultivated sustainably.

Finally, our goal is to increase the supply of sustainable oil available on the market by a volume equal to Henkel’s demand in 2020. 

We are working towards these goals by:

  • Converting to Mass Balance palm and palm kernel oil: The vast majority of the palm and palm kernel oil in our products is consumed indirectly through ingredients based on these oils (e.g. surfactants). We are working with our suppliers to ensure that a significant amount of it is Mass Balance-certified (i.e. a controlled mix of sustainable and conventional oil) in 2015. Furthermore, we intend to increase our purchase of Mass Balance-certified oils to cover 100% of our demand by 2020.   
  • This replaces our previous commitment to cover all product ranges with Book & Claim certificates for sustainable palm and palm kernel oil by 2015. By purchasing Mass Balance oil (rather than palm and palm kernel oil certificates), we can contribute more efficiently to physical sustainable oil entering our value chain. 
  • Improving traceability: We are establishing pilot projects to trace palm and palm kernel oil that we use back to the plantations in order to ensure the oil that we use is being cultivated sustainably.
  • Supporting plantations and smallholders: We are providing targeted support to plantations and smallholders in palm-growing countries to promote sustainable farming practices, improve livelihoods and ensure that sufficient volumes of sustainable oil are available on the market.
    In 2013, our Laundry & Home Care business unit, Solidaridad and other partners started a three-year program aimed at improving the livelihoods of 7,500 small farmers and 5,000 workers in Honduras. We aim to increase our targeted support for smallholders in the future.

Henkel has a long track record of engagement on sustainable palm and palm kernel oil production. Over the past decade, we have continually refined our approach based on new scientific findings and industry developments. We will continue to do so in the future.

We work closely with stakeholders to promote sustainable palm and palm kernel oil production. For example, we are working together with:

  • Roundtable on Sustainable Palm Oil (RSPO): Henkel has actively participated in the RSPO since 2003, and became an official member in April 2008. Today, the RSPO has several hundred members, including oil palm growers, producers of consumer products, retailers, banks, investors and non-governmental organizations. The RSPO’s criteria and mechanisms for sustainable palm and palm kernel oil cover primary forest protection as well as social criteria. These criteria, however, are not considered adequate to ensure the protection of secondary forests and peat land. The RSPO criteria nevertheless represent an important foundation for the transition toward sustainable palm oil production.
  • Consumer Goods Forum: Henkel is a signatory to an initiative of the Consumer Goods Forum to fight global deforestation and protect biodiversity. The member companies have committed to take individual and joint action to stop global deforestation and achieve the goal of zero net deforestation by 2020.
  • Forum on Sustainable Palm Oil: Together with the German Association for International Cooperation (GIZ), industry partners and the World Wide Fund for Nature (WWF), our Laundry & Home Care business unit established the Forum on Sustainable Palm Oil in Germany in September 2013. The Forum aims to build on existing Roundtable on Sustainable Palm Oil (RSPO) standards to further improve the sustainability criteria for the production of palm and palm kernel oil in palm-growing countries.
    The long-term goal of this initiative is to move the German, Austrian and Swiss markets toward certified sustainable palm and palm kernel oil.
  • Our suppliers: We maintain a dialog with ingredient suppliers to encourage them to convert their production operations to sustainable palm and palm kernel oil. Furthermore, since we purchase surfactants from ingredient suppliers, we are working with our partners to improve production practices and establish traceability of the palm and palm kernel oils they use.

Our goal is that whenever palm and palm kernel oil are used in our products, they are derived from sustainably cultivated sources.

We worked toward this goal via the Book & Claim system. We began collaborating with the GreenPalm trading platform in 2008 so that the platform would cover palm kernel oil as well as palm oil, and then became the world’s first company to purchase such certificates. Furthermore, in 2009, we made a commitment to cover 100% of the palm oil and 100% of the palm kernel oil used in our products with sustainability certificates by 2015.

However, in order to accelerate physical progress and the transformation of palm and palm kernel oil value chains, more tangible action is needed. As a concrete action, we are increasingly using Mass Balance palm and palm kernel oil, the majority of which we consume indirectly through ingredients like surfactants. A significant amount of the palm and palm kernel oil used in our products will be Mass Balance certified in 2015, and we intend to increase our purchase of Mass Balance-certified oils to cover 100% of our demand by 2020.

The Mass Balance model will enable us to demonstrate our commitment to physical sustainable palm and palm kernel oil. It also enhances the physical flow of certified palm and palm kernel oil into our value chain. 

In addition to using Mass Balance-certified palm and palm kernel oil, we would like to increase our support for sustainable palm oil production with even more specific targeting of small farmers and local initiatives in palm-growing countries in the future. We need solutions and projects that enable small farmers to increase productivity on their plantations.

We aim to change the entire market in this way, so that only sustainably produced palm and palm kernel oil is available in the future.

The first example of this is the three-year program started in Honduras in the summer of 2013 by our Laundry & Home Care business unit, the Solidaridad development organization and other partners. Our common goal is to create a sustainable supply chain for palm and palm kernel oil that can be certified under the RSPO criteria. This project aims to help Honduras become the first country to change almost completely over to sustainable palm oil production.

The small farmers participating in the program will receive training and assistance in optimal agricultural practice and better plantation management until the end of 2015 to allow them to increase the productivity and yield of their plantations. Worker training covers the key areas of health and safety and supports application of the RSPO sustainability criteria. The WWF, Netherlands development organization SNV and Proforest are important partners in the project.