Wilmar Announces Palm Oil Sustainability Policy

On December 5, the world’s largest palm oil trading company, Wilmar, which accounts for 45 percent of the global trade in palm oil, announced a new policy that will ensure its plantations and suppliers protect high conservation value forests, abstain from using fire to clear land, ban development on peatlands, and prohibit exploitation of workers and local communities.

This was a stunning announcement from the company ranked by Newsweek in 2011 and 2012 as environmentally the worst performing firm in the world.  The expansion of palm oil in Indonesia has become a focus of the Packard Foundation’s Climate and Land Use grantmaking over recent years because of its harmful impacts on the climate (it is the largest source of land-use greenhouse gas emissions), as well as its contribution to rapid tropical deforestation in Indonesia  and harm to local communities.

Our partners within the Climate and Land Use Alliance have been supporting work in Indonesia to tighten regulations, but the Foundation brought a new supply chain approach to bear and scaled this up significantly in the last 12 months.   Just a handful of trading companies like Wilmar and Cargill control most of the global trade in palm oil.  Convincing these companies to grow or purchase only sustainably produced palm oil  would create a significant incentive for growers in Indonesia to improve their practices.

Over the last year we have funded Rainforest Action Network and Greenpeace (press release here) to pressure retail companies that purchase palm oil from Wilmar and Cargill, supported Ceres and AIDEnvironment to convince investors not to invest in companies producing or trading unsustainable palm oil, and supported The Forest Trust and Climate Advisers that work with companies like Wilmar to help them respond to this pressure. Wilmar’s decision was the outcome we were aiming for, and it happened much more quickly than we had expected.

Learn more about our work to change land use practices around the world to mitigate the climate change threat.