Long-term Sustainability of Indian Palm Oil Buyers through Responsible Sourcing

Posted on
20 May 2022
Palm oil is one of most produced, consumed and traded edible oils in the world due to its high-versatility and cost-effectiveness. However, it is imperative to highlight that the conventional production practices of palm oil globally can lead to various environmental issues, such as biodiversity loss, due to replacement of natural forests with palm oil plantations, pollution, climate change; as well as social issues like human rights violations and exploitation. These effects can be mitigated if global supply chains demand palm oil that is sustainably produced.
Currently, India meets 64% of its edible oil requirements through imports, of which palm oil accounts for 59%. Over 90% of palm oil imported by India comes from Indonesia (69%) and Malaysia (24%). Many companies from China, UK, US, have set sustainable policies that demand certified sustainable palm oil from these producer countries.  However, Indian companies can play a critical role in this global transition towards sustainable production, as India is the largest importer and the second largest consumer of palm oil in the world.

With the government's recent push on incentivizing expansion of palm oil production in the country, there lies tremendous imperative in integrating sustainability in the production practices in order to preserve the country's ecosystems. 

WWF India’s “Sustainable Palm Oil Procurement Guide for Conscious Buyers in India” highlights the importance of responsible sourcing and the rationale for the Indian palm oil buyers to move toward setting sourcing policies and commitments to make sustainable palm oil the norm. The guide has outlined the different steps in line with the Accountability Framework Initiative’s (AFi’s) twelve core principles that the companies in the Indian market can undertake to transition their supply chains with more sustainable and viable practices. The guide also includes highlights from global and Indian companies that are ahead of the curve in their sustainable sourcing journey.  These case studies will serve as examples for companies that are initiating or keen to initiate their sustainable sourcing journey.

“We have witnessed in recent times that companies are becoming more conscious about the way they produce and consume resources,” said Ms. Vidya Soundarajan, Director, Footprint, WWF-India. “However, they are often unsure on where to start their journey. This report serves as a resource guide for companies that are keen to initiate their transition toward sustainable palm oil sourcing, including steps on how to get there” she added. 
The report highlights four key steps, starting with baseline establishment, setting commitments and targets, implementation of the commitments, followed by incorporation of proper monitoring and reporting mechanisms, along with some additional action points that the companies can take which will support them in transitioning towards sustainable palm oil.  "We need more Indian companies to start their journey toward transparent and sustainable supply chains for palm oil in order to bring about a change at domestic as well as at international levels. This guide will allow companies to take the first step in doing so," said Mr. Ramnath Vaidyanathan, GM & Head-Environmental Sustainability, Godrej Group.

It concludes by highlighting the significance of collaborative effort where all stakeholders come together and support each other. Concerted action is a crucial way to transform the risks associated with conventional palm oil into opportunities and achieve a sustainable palm oil industry. "The guide builds a strong case on why there is a need for Indian companies to start setting up sustainable sourcing policies for palm oil as well as reiterates the integral role that India can play in order to bring about a global change in the palm oil industry," concludes Mr. Dheeraj Talreja, President, AAK.
The full guide can be accessed here.
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