Delivering deforestation-free palm oil through transformative technology

At Unilever, we’re determined to grow our business without compromising the protection and regeneration of natural agricultural ecosystems – including forests.

They are the lungs of our planet, the habitat of rare and endangered wildlife, and a source of livelihood for over 1 billion people.

One of my first jobs out of university was with a global environmental think tank in Indonesia, where I experienced the devastating impact of what deforestation can do.

I remember driving in my car and just seeing smoke and fire in the middle of rural highways in Central Kalimantan. The local community said it was the burning season. Companies were clearing natural habitats to meet the demand for land to grow oil palm.

Unilever is one of the largest buyers of certified sustainable palm oil for consumer goods. And we’re often asked why we still use it.

Palm oil itself isn’t the problem

It’s the most land-efficient vegetable oil. Oil palm provides 40% of the global production of vegetable oil, while only occupying 6% of agricultural land for oil seeds.

It's also the source of livelihood for millions of farmers and communities across Indonesia and Malaysia, where more than 80% of global production originates.

But the industry has undergone rapid expansion and that has accelerated deforestation. It’s also led to challenges such as poor production standards, increased land conflicts and labour rights issues.

As a key global buyer of palm oil, we have an important leadership role in transforming the industry to benefit everyone involved, from farmers and the wider community to wildlife and nature.

I became a Senior Manager for Sustainable Sourcing at Unilever to enable a more positive change, at scale, for people and the environment.

The story so far: Our progress to a deforestation-free supply chain

In 2020, we committed to achieving a deforestation- and conversion-free supply chain for palm oil, paper and board, tea, soy, and cocoa.

These five key commodities contribute to more than 65% of Unilever’s total impact on land and are the crops most often linked to deforestation and the conversion of natural ecosystems to farmland.

Our commitment means these materials entering our direct supply chain must not come from land that has been cleared of forests, for agriculture or any other use.

At the end of 2023, we were independently verified as being 97.5% deforestation-free for our key commodities. This achievement was a great challenge but also a great opportunity.

It required collaboration with many like-minded partners. This included direct suppliers and those in forested landscapes, local communities, governments, other businesses and technology partners.

This united effort is something we will continue to develop helped by our scale and smart technologies.

Using innovative technology to track and transform the vital first mile

When we first began working on a sustainable and deforestation-free palm oil supply chain, it was clear that there were limitations around certification and traceability.

One of the main complexities is that oil palm farmers tend to sell their fruit to various local agents and middlemen before it reaches us, so we’re trying to trace a complex web of movements.

Traditionally, the monitoring practice in the industry has been to look at sourcing and deforestation within a 50km radius around a mill.

This is because the fresh fruit bunches of an oil palm need to be processed within 24 hours of being harvested.

But this isn’t precise enough for our deforestation-free and traceability requirements, and that’s where technology comes in.

Technology in action

We are working with major tech firms and innovative start-ups, using satellite data, geolocation, blockchain and artificial intelligence to build a suite of new approaches that will transform palm oil traceability.

Our partner, Earthqualizer, for example, makes use of high-quality concession data and satellite monitoring. It’s combined with a best-in-class inventory of accountability data to help us monitor over 20 million hectares across South East Asia.

We also have partners gathering geolocation data on the ground to map our smallholder farmers. And we’re using blockchain to ensure that data cannot be manipulated once it’s been recorded.

However, sustainable palm oil will never be commonplace if we work in isolation.

We could be sourcing from the most sustainable plantation in the district, but if the neighbouring plantation is deforesting and draining peat, our efforts are going to lose their impact.

Building relationships and improving livelihoods to increase impact

Through our direct sourcing programmes and smallholder development hubs, we’re engaging with independent mills and their small base of independent smallholders who have, until now, been mostly left out of the sustainable supply chain.

UD Lestari and KUD Tani Subur are examples of two independent smallholder groups that I’ve enjoyed working with directly. We’ve helped both with agricultural training and it’s been great to see the positive change in their value chain first-hand.

We’ve received reports of yields increasing on average by 13–15%, thanks to better harvesting, pruning and agricultural practices.

Purchasing directly from these smallholders also helps boost their productivity and income, encourages land stewardship, and lessens the incentive for more forest clearance.

Improving transparency in our supply chain

To date, and with the farmers’ consent, we’ve mapped over 36,000 independent smallholders in the countries that supply us with palm oil.

Our goal is to help improve traceability and transparency, and understand their agricultural needs.

We’ve also trained 34,000 independent smallholders on good agricultural practices, helping to boost their incomes with higher-quality crops.

And we’ve helped 14,000 independent smallholders become RSPO (Roundtable on Sustainable Palm Oil) certified.

All these initiatives bring us nearer to closing the living income gap and protecting and restoring the environment.

They also increase the amount of certified sustainable and verified deforestation-free palm oil in our supply chain and within the industry.

Working to drive wider change in the industry

Being able to confidently say we are deforestation-free matters not only to us, but also to our consumers and to civil society organisations, who quite rightly want to know more about the raw materials in our products.

It’s becoming a bigger regulatory issue too.

With countries including the US and the EU setting their own standards around forest-risk commodities, we need to ensure we can be compliant.

We’re doing this by continuing to invest in our infrastructure, sustaining and strengthening our technology partnerships, and building on the traceability programmes we have with our suppliers and smallholders.

By listening to stakeholders across the industry, engaging with local governments, suppliers and smallholders, and working together on solutions, we will be able to drive real change across the industry.

To read more about our updated commitments on climate, nature, plastics and livelihoods, visit our Sustainability Hub.