Supply Chain

Bunge Jumps into Deforestation-Free Palm Oil with a Splash

On Monday, Bunge — an agribusiness and food ingredient company based out of White Plains, New York — indicated its intention to ensure the palm oil that it sources will be deforestation- and peat-free. Coming from one of the largest traders of palm oil in the world, Bunge’s announcement is significant for what it means for both the world climate and for ecosystems at risk due to palm oil production. But to me it also signifies that the status quo — palm oil that is linked with deforestation and peatland destruction — is a sinking ship that is increasingly risky to stay aboard.

By Lael Goodman | Published 10 years ago | About a 4 minute read

Bunge eyes the shore

UCS and our allies have been engaged with Bunge for months now. We’ve corresponded with them. We’ve met with them at their headquarters in White Plains. We traveled to Singapore for a conversation with their suppliers. And with your help, we’ve put the pressure on some of the companies buying palm oil from Bunge. Two such companies — Dunkin’ Brands and Krispy Kreme — recently came out with new pledges on palm oil. Meanwhile, two of Bunge’s competitors, Wilmar and Cargill, dove headfirst into zero-deforestation by announcing policies that apply across a range of commodities. Amidst such an atmosphere of change, Bunge is moving forward with its new policy.

Bunge’s new policy protects primary and secondary forests and updates its labor and human rights safeguards. It saves peatlands from development and better manages existing plantations on peat. And because Bunge purchases some of its oil from areas with lots of peatlands, the new commitment has the potential to save huge amounts of carbon. I’ve written before about the importance of peat soils, and particularly the pushback of growers in Sarawak, Malaysia. With proper implementation, Bunge’s commitment could help steer the region towards greater conservation of peatlands.

The realization of each of these measures will mean considerable effort on Bunge’s part. By committing to a new policy, they have signaled to the world that it makes better business sense to move forward even with added costs than to risk doing nothing and falling behind new industry standards.

Or only testing the waters?

However admirable the policy is for the reasons outlined above, the Bunge policy does not set target dates for implementation. It commits only to start to collaborate with suppliers and stakeholders to develop timelines. Timelines are important because they provide a sense of urgency and accountability. And while the policy rightly prioritizes tracing palm oil back to the plantation for areas that are deemed at risk, it makes no commitment to do so with all of the palm oil it sources at any point in the future. Without these timelines, Bunge can be said to be testing the waters, perhaps dipping its toes into the water, but it is not yet swimming to safety.

We will have to wait and watch in the coming months to see whether Bunge makes good on its promise and takes the further step of setting some explicit time deadlines, and then follows through on those timelines, to ensure it is accountable for the palm oil it sources before we can term it safely ashore.

Who is still going down with the ship?

Bunge’s commitment marks yet another trader that will soon be offering palm oil that is deforestation and peat-free. The rapidity with which companies have been making commitments over the past year can be likened to an emergency evacuation. As more companies swim to safety, fewer and fewer are left in the quickly sinking ship, desperately bailing out water. It makes me wonder when these companies who have not yet made commitments — such as McDonald’s, Burger King and YUM! Brands (Taco Bell, KFC, and Pizza Hut) — are going to take the plunge and swim to shore.

It’s sunny and dry on the beach. We’re saving you a seat.

This post first appeared on UCS' The Equation blog on October 29, 2014.