Palm oil, the most widely used vegetable oil, is a globally traded agricultural commodity used in approximately half of all consumer goods, such as packaged foods and personal care products, as well as biofuels. Increasing demand for palm oil has had measurable environmental and social impacts, including deforestation, habitat destruction and biodiversity loss. The personal care products industry represents less than 1% of global palm oil usage, and while we at The Estée Lauder Companies are a comparatively low-volume user of palm oil, palm fruit oil, palm kernel oil (PKO) and PKO derivatives, we are sensitive to the issues and complexities surrounding its sustainable production and traceability.
We believe we have a responsibility to manage the environmental impact of the palm materials we source. A few of our brands use palm oil that is extracted from the palm fruit. We source all of this palm fruit oil from Roundtable on Sustainable Palm Oil (RSPO) identity-preserved sources. The majority of our brands use certain ingredients that are derivatives of palm kernel oil, processed by our suppliers. We have already begun to substitute existing non-certified PKO derivative ingredients with RSPO certified Mass Balance (MB) alternatives in some of our formulae. This substitution process is expected to continue over several years.
We are committed to working in collaboration with our suppliers to further enhance the traceability of PKO derivative ingredients we use, and to the development of sustainably sourced alternatives for our Company. Our internal Palm Oil Working Group has engaged with suppliers and organizations knowledgeable on sustainable palm sourcing, and we are seeking sustainable PKO derivatives, where available, to replace existing materials.
As a result of our ongoing commitment to support sustainable palm oil sourcing, we have established a more comprehensive policy and a plan for greater traceability and policy compliance among high-volume[i] palm oil, PKO and PKO derived ingredient suppliers from which we procure directly.
Our enhanced actions and goals include:
• We have adopted a no deforestation policy, which requires our high-volume suppliers to ensure that they prohibit new clearing or palm development on High Carbon Stock (HCS)[ii], High Conservation Value (HCV)[iii] forests and peat lands[iv] or the use of fire for the preparation of new planting or re-planting. By the end of 2015 all suppliers of ELC’s high-volume palm oil, PKO and PKO derived ingredients will be required to provide third-party verification that they are complying with our no deforestation policy.
• As members of RSPO, we will seek to purchase our high volume PKO and PKO derivative ingredients from certified sustainable sources and from suppliers that can demonstrate their compliance with the RSPO Principles and Criteria, including responsible consideration of affected employees, individuals and communities, encompassing social impact assessments, contributing to local sustainable development where appropriate and respecting human rights. We will work collaboratively with our high volume suppliers to support and establish source.
• Until we are able to purchase 100% PKO derivative ingredients traceable to known and certified sources, we will annually purchase Green Palm Certificates to offset the use of non-sustainable PKO derived ingredients that we procure directly. Green Palm is a certificate trading program, which contributes toward more sustainable palm oil products.
• We will map the supply chain for our high-volume palm oil, PKO, and PKO derived ingredient suppliers and assess the sourcing policies and practices of these key suppliers.
• We will annually report on our progress.
We remain committed to acting responsibly and will continue to work with our suppliers, industry partners and other like-minded organizations to find the best ways to encourage and support the development of sustainable palm oil production.
[i] High-volume suppliers are sources from which we purchase greater than 50 tons annually of Palm Oil, Palm Kernel Oil (PKO) and PKO derived ingredients.
[ii] The high carbon stock approach distinguishes natural forest from degraded lands with only small trees, scrub, or grass remaining. It separates vegetation into six different classes (High Density Forest (HK3), Medium Density Forest (HK2), Low Density Forest (HK1), Old Scrub (BT) 3, Young Scrub (BM), Cleared/Open Land (LT) through the combination of analyzing satellite images and field plots. HCS forests include the vegetation classes of BT and above (HK1, 2 & 3). The HCS threshold between BT and BM is largely determined by the vegetation structure and density difference, where BT can be described as- Mostly young re-growth forest, but with occasional patches of older forest within the stratum, and BM as - Recently cleared areas, some woody re-growth and grass-like ground cover. Below this, BM and LT would be considered of low carbon stock and potentially suitable for oil palm plantation development. For the second stage of the HCS methodology, the identified HCS/forest areas are screened against biodiversity conservation criteria. Social considerations include the current and future land use by local communities and the free, prior informed consent (FPIC) of local communities, as well as the legal status of the land, the impact of the HCS areas on plantation design and management, and overall monitoring. Please see here for more information: http://www.goldenagri.com.sg/pdfs/misc/High_Carbon_Stock_Forest_Study_Report.pdf
[iii] High Conservation Value refers to the areas necessary to maintain or enhance one or more High Conservation Values (HCV), where a HCV is a biological, ecological, social or cultural value of outstanding significance or critical importance. Specific definition of the six HCV categories follow:
• HCV1 Species Diversity: Concentrations of biological diversity including endemic species, and rare, threatened or endangered species, that are at significant at global, regional or national levels.
• HCV2 Landscape-level ecosystems and mosaics: Large landscape-level ecosystems and ecosystem mosaics that are significant at global, regional or national levels, and that contain viable populations of the great majority of the naturally occurring species in natural patterns of distribution and abundance.
• HCV3 Ecosystems and Habitats: Rare, threatened, or endangered ecosystems, habitats or refuges.
• HCV4. Critical Ecosystem Services: Basic ecosystem services in critical situations, including protection of water catchments and control of erosion of vulnerable soils and slopes.
• HCV5. Community Needs: Sites and resources fundamental for satisfying the basic necessities of local communities or indigenous peoples (for livelihoods, health, nutrition, water, etc.), identified through engagement with these communities or indigenous peoples.
• HCV6. Cultural Values: Sites, resources, habitats and landscapes of global or national cultural, archaeological or historical significance, and/or of critical cultural, ecological, economic or religious/sacred importance for the traditional cultures of local communities or indigenous peoples, identified through engagement with these local communities or indigenous peoples.
For more information, please see the High Conservation Value Resource Network: www.hcvnetwork.org.
[iv] Peat lands are wetland ecosystems that accumulate plant material over time to form layers of peat soil up to 20 meters thick. They are present in 180 countries, cover 3 percent of the world’s surface, and store an average of 10 times more carbon per hectare than other ecosystems. Peat lands are also home to a large share of the world’s freshwater resources and are critical in biodiversity conservation, including for species such as the orangutan and certain cranes.