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Sustainable Palm (Kernel) Oil

Henkel wants to drive progress toward sustainable palm oil and palm kernel oil – and make a positive impact on both the environment and the people affected.

  • Sustainable sourcing of palm (kernel) oil
  • Collaboration in palm oil industry
  • Our goals

  

At Henkel, we recognize our responsibilities regarding the purchase and use of ingredients based on renewable raw materials. For this reason, we are committed to ensuring that the ingredients for our products are made from sustainable palm oil and palm kernel oil. We have set ambitious goals for 2025 and, building on existing certifications, we intend to develop our supply chains to ensure full NDPE compliance (No Deforestation, No Peat, No Exploitation). We aim to ensure that the palm oil and palm kernel oil used as ingredients in our products do not contribute to the deforestation of primary or secondary rainforests with significant ecological value. These include peat lands and other high-carbon stock areas. In addition, we intend to continuously develop traceability and transparency. We also aim to further improve the livelihoods of smallholders while playing our part in climate protection and adaptation to climate change. 

Our purchase of palm oil-related materials accounts for less than 0.2 percent of the palm oil and palm kernel oil produced worldwide. The majority of this is palm kernel oil as the basis for surfactants that we use in our detergents and cosmetic products. These materials are at the end of a long and often highly complex supply chain. For this reason, Henkel is committed to driving progress toward achieving sustainable practices across the palm oil industry – along the entire value chain.

Collaboration with representatives from across the sector is at the heart of our approach to supporting sustainable palm oil and palm kernel oil. Through partnerships, projects and dialog, we are able to engage with key players ranging from plantations, smallholder farmers and palm oil mills all the way through to governments, non-governmental organizations and suppliers. These activities enable us to expand our contribution to sustainable practices in the palm oil industry. These partnerships also provide us with important insights into the challenges posed by this valuable vegetable oil and its contribution toward safeguarding food supplies.

Action for Sustainable Derivatives (ASD) 

In November 2019, Henkel joined the cross-industry initiative Action for Sustainable Derivatives (ASD) as a founding member, together with other leading consumer goods manufacturers and companies in the oleochemicals industries. 
The primary objective of the initiative is to generate more transparency in the complex value chain for palm derivatives. The resulting shared aspiration is to assess identified risks and to promote the sustainable production and procurement of palm oil and palm kernel oil derivatives. The initiative aims to facilitate the sharing of best practices and solutions in order to comprehensively transform the complex palm oil derivatives sector. In addition, the harmonization of requirements, tools and criteria will create fair conditions of competition for companies and their direct suppliers. It will also reduce the burden on upstream stakeholders in the supply chain. 
ASD’s first progress report in 2020 shows the successes achieved just ten months after its formation. This includes the analysis of data on supply flows along the supply chains of 18 member companies, covering a total volume of 450,000 metric tons of materials based on palm oil. This has enabled up to 90 percent traceability of the collective quantities to the refinery and 81 percent to the mill. We have also had a compliance profile compiled for our main suppliers of raw materials based on palm oil in 2020, with the aid of the Sustainable Palm Index. This tool helps us to identify potential improvements and define action plans together with our suppliers.

Preservation of biodiversity 

Conserving species diversity and biodiversity is important to Henkel, as intact ecosystems and soil biodiversity are essential as a basis for sustainable agriculture and raw material production. This also includes our commitment to the Consumer Goods Forum initiative against worldwide deforestation and for the protection of biodiversity. By promoting smallholder projects in the palm oil and palm kernel oil sector, we are giving consideration to ecological aspects while supporting climate-friendly agriculture. 
 

  

Building on our 2020 objectives, we have set more far-reaching goals for 2025 that we believe will address the key priorities for successfully transforming the palm oil industry. These goals are focused on the specific challenges where we can make our strongest contribution. The targets for 2025 are: 

  1. 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 fiscal year 2020, we were able to source 90 percent of our total demand for palm oil and palm kernel oil, together with the derivatives mainly used by Henkel, as certified raw materials in line with the RSPO’s Mass Balance model. In some markets, unfortunately, certified raw materials are still not available to us locally, due to insufficient demand in certain emerging markets. In these cases, we join forces with our suppliers to look for solutions or, alternatively, we have to import raw materials, at a corresponding cost in terms of time and effort. Additionally, a number of derivatives of palm kernel oil-based raw materials that we use in comparatively small quantities are still not available as RSPO-certified products. In these circumstances, too, we maintain an intensive dialog with our suppliers. The challenges mentioned above were compounded in 2020 by delays in RSPO certification for some suppliers as a consequence of the COVID-19 pandemic. We are confident that we will make further progress in the transition to certified raw materials in the years ahead, yet we must acknowledge that full transition of our value chains to sustainable palm oil remains challenging. As a result, we offset the remaining portions via RSPO-Credits according to the Book & Claim model. This means that, through RSPO, we cover 100 percent of the palm oil, palm kernel oil and derivatives used in our products. By purchasing the RSPO-Credits according to the Book & Claim model, we intend to create an incentive for plantation operators to continue making investments in implementing ambitious sustainability standards and the certification, until we can physically switch the remaining quantities of raw materials and so close the supply chains.
  2. Establish full traceability and transparency of the palm oil and palm kernel oil used in our products: 
    We have learned from our activities that the issue of transparency and traceability needs further development, especially for palm-kernel-oil-based derivatives. We also find that cross-industry initiatives, such as “Action for Sustainable Derivates” (ASD), are needed to verify targets for zero net deforestation. With this in mind, we continue to pursue the goal of full transparency and traceability by 2025, together with our partners. In 2020, we were able to increase the traceability rate to 75 percent, all the way to the mill.
  3. Improve the livelihood of smallholders and protection of nature: 
    Smallholders produce 40 percent of the world’s palm oil, yet their productivity and quality levels are much lower compared to large plantations. They often lack access to technical knowledge and to financial services that are crucial to improving their production. Some smallholders are also concerned that access to the palm oil market will be limited if their harvests do not meet the criteria set out by the RSPO. This is because many major buyers of palm oil have committed to buying only oil products that are certified as sustainable. Together with the development organization Solidaridad, Henkel is addressing these challenges. It is currently engaged in seven initiatives in Ghana, Honduras, Indonesia, Colombia, Mexico, Nicaragua and Nigeria to find innovative, market-based solutions focused on increasing the yield for smallholders. The focus is on training in best practice approaches, including climate-friendly agriculture, along with exerting an influence on policy and involving stakeholders. To date, around 34,000 smallholders have been reached on some 305,000 hectares under cultivation. 
    We are building on the success of our collaborative projects with smallholders and will continue strengthening our commitment to integrate raw materials from these smallholders into our supply chain. Greater consideration is also given to ecological aspects while supporting climate-friendly agriculture and a positive impact on biodiversity.