The palm oil industry has sometimes been associated with human rights abuses and adverse environmental impacts, including deforestation, soil pollution and erosion, water contamination, and threatening endangered species. However, meaningful efforts are being made to change that.
On February 16, 2018, Unilever shared information about its suppliers and mills in order to provide greater transparency into its palm oil supply chain. Though Unilever isn’t the first company to try to provide better visibility into its supply chain, the company is the first to provide such details about its sourcing and production.
As of 2017, Unilever receives palm oil, palm kernel oil, and/or its derivatives from over 300 suppliers and utilizes over 1,400 mills across the globe. Transparency and traceability was a goal Unilever set in 2013 and again in 2016 with its Sustainable Palm Oil Sourcing Policy.
In a statement posted on its website, Unilever’s Chief Supply Chain Officer, Marc Engel, said, “Unilever believes that complete transparency is needed for radical transformation. We want this step to be the start of a new industry-wide movement.”
Publically disclosing supplier information is a key method to allow consumers insight into a company’s corporate practices. Adopting a supplier policy targeted to good corporate practices is vital to ensure adherence with not only ethical concerns, but regulatory and shareholder obligations as well.
Establishing robust and comprehensive supply chain policies, however, is just the first step in providing compliance assurances. Supply chain contracts can include the right to audit suppliers to ensure proper oversight and adherence to ethical and sustainable practices. Companies can also encourage compliance with supplier codes of conduct by measuring successes via quantifiable metrics. Not only can these successes be used to manage suppliers, but they can also be published for customers to look over – better visibility and corporate accountability can lead to a public relations improvement.
Unilever’s transparency highlights the significance of prioritizing ethical global, community, and environmental practices. By working with suppliers on expectations of corporate responsibility, Unilever is helping to shift the standard towards ensuring socially responsible and environmentally friendly sourcing and production of palm oil.