Procter & Gamble Co. palm oil score: Worse than Nestle' better than Wendy's

Union of Concerned Scientists rates companies

CINCINNATI - Procter & Gamble Co. ranks in the bottom half of personal care companies in its commitment to sourcing sustainable palm oil, according to a new study by the Union of Concerned Scientists (UCS).

The Cambridge, Mass.–based nonprofit, which conducts research on environmental and social issues, published a Palm Oil Scorecard Mar. 5. It ranked 30 companies on their policies for sourcing the widely-used vegetable oil in ways that do not contribute to deforestation.

The group ranked the 10 largest companies in three categories: packaged goods, personal care and fast food. P&G is ranked as having “little commitment” to deforestation-free palm oil, with scores similar to Colgate-Palmolive, Kao Corp. and Avon.

Cosmetics maker L’Oreal ranked at the top of the personal care group, while Estee Lauder and Clorox ranked at the bottom.

Seven chain restaurant companies, including Yum Brands, Starbucks and Wendy's, received the worst scores.

“Fast food companies are horrible at this,” said Calen May-Tobin, a UCS policy analyst who spent several months on the study. “It was the easiest sector to score because so many didn’t have policies.”

P&G’s palm oil standards became a matter of local public interest this week after Greenpeace activists staged a high-profile protest at the company’s global headquarters. The group managed to hang 60-foot banners that read, “Head & Shoulders: Wipes out dandruff & rainforests” and “Stop putting tiger survival on the line.”

READ MORE: Who is the company behind the P&G protest?

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Greenpeace has been critical of P&G's palm oil policies for months. On Feb. 26, it published a study showing the company purchased oil from several controversial palm oil plantations.

P&G has repeatedly said it agrees deforestation is a significant issue.

“We have committed to 100 percent sustainable sourcing of palm oil by 2015, and we are working with our suppliers to ensure we deliver this commitment," said P&G spokeswoman Lisa Popyk.

But P&G’s critics, including Greenpeace and UCS, argue the company isn’t going far enough with its pledge because it is based on standards developed by the Roundtable on Sustainable Palm Oil, or RSPO. That’s an industry coalition that supports an end to clearing the most pristine forests, but would not protect less dense “secondary forests” and peat swamps, environmental activists claim.

P&G defends the roundtable.

"The RSPO standard is the most comprehensive, robust and widely supported and implemented palm oil sustainability standard in the world," Popyk said. "RSPO criteria addresses major impacts of palm oil production and require auditing by certification bodies that are independent of both the RSPO and the companies themselves."

READ MORE (INSIDER): From Greenpeace to PETA: Why P&G is targeted by activists

Forests are at risk because palm oil producers are clearing trees for new plantations to satisfy rising global demand for palm oil. It's gaining in popularity because it is relatively cheap to produce and highly versatile in the production of food and chemical products. It also has less saturated fat than butter and no trans fat.

Worldwide production more than doubled since 2000, reaching 54 million metric tons in 2011, according to . About 90 percent of that production comes from Malaysia and Indonesia, where palm plantations now cover 9 million hectares and are growing at the rate of 300 soccer fields per hour.

May-Tobin said P&G purchased about 462,000 metric tons of palm oil in 2013, or roughly 1 percent of global production. But it’s a big enough buyer to change the behavior of producers, May-Tobin argues.

Two of the world’s largest producers of palm oil, Golden Agri Resources and Wilmar International, have announced plans to sustainably source palm oil by 2015.

May-Tobin said packaged food giant Nestle’ made those announcements happen by committing to standards more rigorous than the RSPO standards P&G endorses.

“Large companies have a lot of leverage over producers,” he said. “When big companies make commitments like this, it drives the market.”

The RSPO website indicates 14 percent of the world’s crude palm oil is certified to meet its standards. P&G claims 13 percent of its annual purchases meet the same standard.

May-Tobin is hopeful that P&G will push plantation owners to increase yield on palm plantations instead of expanding into peat swamps and forests.

“There is a lot that can be done to increase yield on existing plantations or plant on land that’s already cleared. They just haven’t seen that much of an incentive to do it yet,” he said. “I think companies do want to do the right thing. The more they hear from consumers that they want deforestation out of products, they’ll want to move in the right direction.”

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