Many companies source their raw materials from suppliers around the globe. That’s why a company’s supply chain is such an important resource – because collaboration between companies at every step in the chain can open up powerful opportunities to minimize the overall environmental impact and maximize the overall positive social impact.
Of course, global supply chains are also very complex. Raw materials are often handled by many different companies and travel long distances before reaching their final destination. This creates challenges for companies when seeking to boost sustainability at every step in their supply chain.
At Henkel, our global supply chain includes business partners in more than 120 countries. Together, we want to drive progress toward 100 percent responsible sourcing. That’s why we operate a holistic supplier management approach – and work closely with our suppliers and partners to promote sustainability throughout our supply chain for the benefit of people and the planet.
The palm oil journey
Ingredients based on palm oil and palm kernel oil are a strong example of how we actively promote sustainability in our supply chain. Palm oil is the most widely used vegetable oil and cannot easily be replaced by other oils. To produce the same amount of oil, oil palm trees require about four times less land than rapeseed and as much as eight times less than soy. Palm oil, especially palm kernel oil and its derivatives, are important renewable raw materials required to produce surfactants that we use for our laundry detergents, household cleaners and cosmetic products.
We recognize our responsibilities regarding the purchase and use of ingredients based on renewable raw materials. In this spirit, we have set dedicated targets for palm (kernel) oil for 2025:
- Cover 100 percent of our demand with oils whose responsible sourcing is certified or externally confirmed: We intend to continue driving forward the certification of our raw materials in line with the RSPO’s Mass Balance model. We are also aiming at certification according to the RSPO’s segregation model for the portion of palm oil and palm kernel oil that is directly sourced. In 2021, we were able to source 93 percent of our total demand for palm oil and palm kernel oil, together with the main derivatives used by Henkel, as certified raw materials in line with the Mass Balance model.
- Establish full traceability and transparency of the palm oil and palm kernel oil used in our products: In 2021, we were able to increase the traceability rate to the mill to 84 percent and the traceability rate to the plantation to 42 percent by engaging with our suppliers to map our joint palm-based supply chain.
- Beyond our targets, we support cooperation projects with small farmers: Targeted training enables them to have their harvests certified as sustainable, increase their productivity and improve their livelihoods. In this way, we want to increase the availability of sustainable palm oil and palm kernel oil on the market by the amount that meets Henkel’s needs.
Take a glimpse into our palm oil supply chain
Palm oil and palm kernel oil are extracted from the fruit of the oil palm tree, which is grown on plantations
Based on our Responsible Sourcing Process, we select and collaborate with suppliers that comply with our sustainable sourcing requirements
The palm-based materials we buy are grown in Africa, Asia and South America. They are then processed by various refiners before the ingredients we need are transported to our factories
Henkel factories use surfactants that are derived from palm (kernel) oil to produce detergents, household cleaners or cosmetic products
To achieve the best washing performance, we use a mixture of different surfactants. 43 percent of the surfactants for our laundry detergents and household cleaners are based on renewable raw materials such as palm kernel oil
When you choose one of our products, we encourage you to use it sustainably and responsibly
Enabling purposeful growth through responsible sourcing
With our leading approach to responsible sourcing, we aim to enable purposeful growth by driving sustainability throughout our supply chain for the benefit of people and the planet.
Here’s how we implement our responsible sourcing strategy:
- We place a strong focus on risk management and compliance to create a solid foundation for sustainable decision-making.
- Becoming climate-positive, promoting a circular economy, and supporting social progress are at the heart of our responsible sourcing agenda.
- Collaboration, transformation, innovation and empowerment are four strategic enablers that support us in accelerating our efforts.
Within our purchasing department, we are strongly committed to contribute to Henkel’s Purposeful Growth strategy and its ambitions with our ‘100% Responsible Sourcing’ strategy.
Bertrand Conquéret, President Global Supply Chain and Corporate Senior Vice President Purchasing
Respecting human rights and promoting high social standards
Millions of people around the globe work within our supplier base. This means we have a responsibility to manage the impact of our business activities. We do this by choosing suppliers who consider the safety and health of their employees – and who operate in line with our high expectations for social standards and fair business practice.
We constantly engage in open dialog and collaboration with our suppliers to promote sustainability and respect for human rights. Our Responsible Sourcing Policy is an integral part of our sourcing processes, and we also support the implementation of the 17 UN Sustainable Development Goals (SDGs). In this way, we ensure a holistic supplier management process that is based on a strong commitment to conducting business responsibly.
Strong partnerships along the value chain
Only together with our partners – our suppliers, business partners and cross-industry initiatives – we can accelerate our efforts towards responsible sourcing.
The initiative “Together for Sustainability” (TfS) aims
to harmonize increasingly complex supply chain management processes
with regard to sustainability and to optimize dialog among
worldwide business partners.
In collaboration with the development organization Solidaridad, we want to empower smallholder farmers to increase productivity and meet rising expectations for safety and environmental sustainability.
As a founding member of Action for Sustainable Derivatives (ASD) we work towards increasing transparency in the palm oil derivative supply chain and promoting compliance with NDPE (No Deforestation, No Peat, No Exploitation) principles.
If you didn’t see it, you would never believe how far we’ve come in these 35 years.
Fausto Martínez, Smallholder Palm Oil Farmer in Honduras
Palm oil and palm kernel oil FAQ
How does Henkel use palm oil and palm kernel oil?
Why are these materials linked to negative impacts
on people and the environment?
Is there a more efficient alternative to palm-based materials?
What is the RSPO?
What is the Mass Balance model?
At Henkel, we purchase less than 0.2 percent of the palm oil and palm kernel oil produced worldwide. Most of this is related to surfactants based on palm kernel oil that we use in laundry detergents, household cleaners and cosmetic products. Surfactants are ingredients that build a foam to dissolve grease and dirt.
The expansion of the conventional palm oil industry has been linked with the displacement of indigenous communities and unethical working conditions, as well as deforestation and the related loss of habitats for animals. Therefore, Henkel is following an alternative approach supporting sustainable practices along the entire value chain.
Not really, because the oil palm tree is so much more productive than other crops. One hectare of land can be used to produce 3.3 tons of palm oil, but would only yield 0.7 tons of oil from rapeseed, coconut or sunflower crops, or 0.4 tons of soy oil. This means much more land would be needed to meet global demand for vegetable oils. In addition, palm oil and palm kernel oil are extremely versatile.
The Roundtable on Sustainable Palm Oil (RSPO) is a global, not-for-profit, multi-stakeholder initiative that offers an established certification program for palm oil and palm kernel oil. It covers criteria ranging from eliminating deforestation through to respecting the rights of workers and communities.
The Mass Balance (MB) model is a certification system from the RSPO that monitors the trade of RSPO-certified palm oil products throughout the entire supply chain. In this model, sustainable palm oil from certified sources is mixed with ordinary palm oil throughout supply chain.
More about Responsible Sourcing
Henkel rewards suppliers for outstanding contributions
For the 14th time, Henkel recognized its top suppliers for their industry-leading performance in 2020. The event took place on January 25 – for the first time fully virtually – with more than 300 registered participants. The partners were awarded in five categories. Evonik was honored with the “Sustainability Award” by Henkel Beauty Care. Stepan received the “Sustainability Award” by Laundry & Home Care. Innospec was awarded as “Best Innovation Contributor” by Beauty Care while Laundry & Home Care honored Novozymes in this category. The winner of the “Best Supply Performance” was BASF.