Sustainable Palm (Kernel) Oil

Many ingredients, such as emulsifiers and surfactants essential to the production of cosmetics, are derived from mineral or plant oils. Palm (kernel) oil is one of these sources. As a cosmetics manufacturer, Beiersdorf does not directly procure palm (kernel) oil but uses its derivatives, i.e. further processed palm (kernel) oil-based materials. We procure around 37,000 metric tons annually for our own demand – roughly 0.05% of global palm (kernel) oil production, according to a 2018 estimate by the US Department of Agriculture. To conserve scarce resources and minimize the environmental impacts of our products, we work closely together with our partners right along the supply chain towards our common goal of promoting a sustainable palm (kernel) oil industry.

If they are cultivated sustainably, palm trees are very efficient oil-bearing plants in environmental terms, as they require a relatively small land area for maximum oil production. A sustainable palm (kernel) oil industry does not cause the deforestation of ecologically vital rainforests (primary or secondary forests). Our objective is for all Beiersdorf products to contain exclusively palm (kernel) oil from sustainable sources by 2020.

Palm Sustainability Roadmap

Our Palm Sustainability Roadmap supports us in steering our company’s progress towards sustainable raw material procurement and maximizing transparency throughout the value chain, as well as improving (smallholder) farmers’ living and working conditions. To achieve these objectives we focus on a set of differing strategic approaches.

Sustainability Certifications

We have made constant and significant progress over recent years in transitioning to sustainably produced palm (kernel) oil. Since back in 2011 Beiersdorf has oriented its palm (kernel) oil sourcing principles towards the “RSPO Supply Chain Certification Standard” established by the “Roundtable on Sustainable Palm Oil” (RSPO).

Since taking our first delivery of certified palm (kernel) oil in 2015 we have continually increased the share of mass-balanced palm (kernel) oil in our sourcing. In 2016 we reached a major milestone by receiving RSPO Multi-Site SCCS Certification, demonstrating our thorough alignment with a sustainable palm (kernel) oil industry.   

In 2018 we covered 63% of our palm-based raw material volumes through mass-balanced palm (kernel) oil. Our ambitious goal for 2020 is to transition all our palm (kernel) oil-based ingredients to physical, sustainably certified, mass-balanced raw materials. Until then we will continue to balance our remaining requirement by purchasing Book and Claim certificates on the RSPO trading platform.

Methods of Procuring Certified Sustainable Palm (Kernel) Oil under the RSPO Supply Chain Certification Standard

Book and Claim

“Book and Claim” refers to online trade using volume certificates. A virtual certificate is purchased by the end-product producer for each metric ton of palm (kernel) oil actually used; further, they purchase this certificate from a supplier that can prove they have produced a metric ton of sustainable palm (kernel) oil. This volume-based balancing ensures that certified raw materials have been used right from the plantation, through the mill, to the finished product – independently of the physical supply chain. In contrast to the “Book and Claim” approach, certified palm (kernel) oil is physically present in the end products in the following three models; however, only in “Segregated” and “Identity Preserved” is there a strict differentiation between certified sustainable and conventional raw materials.

Mass Balanced

“Mass Balanced” describes the controlled mixing of certified sustainable and conventional palm (kernel) oil at any stage in the supply chain. There are no requirements for separate storage or control in the production process, as long as the volumes of certified material bought and sold can be accurately reconciled. Therefore the end products are also understood as “mass balanced”. 

Segregated

“Segregated” requires the complete separation of certified sustainable and conventional palm (kernel) oil. The end product therefore contains 100% sustainably produced palm (kernel) oil.

Identity Preserved (IP)

“Identity Preserved” (IP) describes the strict physical separation of certified palm (kernel) oils originating from different plantations. The criteria for this certification apply throughout the supply chain, also during transportation and storage. As a result, the sustainable palm (kernel) oil contained in the end product is unequivocally identifiable and can be traced back to plantation level.

Maximizing Transparency

Effective implementation of our sustainability criteria is only possible if we know our own supply chain inside out and respond quickly to meet new challenges. Transparency is the key to effective engagement. This is why at Beiersdorf we want to ensure close collaboration with our suppliers to ensure the raw materials we use can be traced right back to their point of origin. In 2018 we launched a project to trace our palm (kernel) oil-based raw materials through our tier 1 suppliers all the way back to the refineries and mills. The project’s objective is to further increase transparency in our palm (kernel) oil supply chain, identify problem hotspots, and support projects on the ground in a targeted way. We have integrated our largest (tier 1) raw material suppliers in the project, meaning that we can already trace back 92% of our sourcing volume for palm (kernel) oil-based raw materials to their precise origin.

Transformation in the Cultivation Regions

As part of a cooperation project with the World Wide Fund for Nature (WWF) in West Kalimantan (Indonesia), since mid-2018 we have been working to improve the living conditions of palm (kernel) oil smallholder farmers. Our aim is to convince these farmers that the sustainable cultivation of oil-bearing palms without further deforestation contributes to an improvement in the living conditions and income situation of their local communities. Our engagement not only benefits the 300 smallholder farmers directly involved in the project but also three village communities with around 4,500 inhabitants. We intend to implement additional projects with further partners to achieve similar improvements in the global palm (kernel) oil supply chain. The findings from our supply chain traceability project are supporting us in selecting and implementing projects such as these. We keep local requirements and specific issues in the sourcing regions firmly at the forefront throughout this process.

External Engagement

We engage through the RSPO and the Forum for Sustainable Palm Oil (FONAP) for the overall advancement of a sustainable palm (kernel) oil industry. The RSPO principles define a responsible minimum standard, while the additional FONAP certification criteria require a greater commitment to environmental aspects and the needs of local communities. These criteria include:

  • A ban of palm plantations on peat land and other carbon-rich land
  • A ban on the use of severely hazardous pesticides (as defined under the Rotterdam and Stockholm Conventions, WHO 1a and 1b, including paraquat)
  • The application of strict reduction targets for greenhouse gases
  • A guarantee that when certified palm-oil mills also procure non-certified raw palm materials (fresh fruit bunches), they obtain these exclusively from legal cultivation.

In addition we are supporting the FONAP smallholder farmer project “Impact of the FONAP Add-on Criteria on Small Producers in Malaysia”. The project is being carried out by the NGO “Wild Asia” in Perak (Malaysia), in cooperation with WWF Germany. The aim of the project is to obtain feedback on the ground from the smallholder farmers on the four FONAP additional criteria, and to test their applicability and practical feasibility.

You can find further information on our engagement on our member page on the RSPO website as well as on the FONAP website itself.