The world is getting smaller – at least it feels that way. Modern transport and other technologies have opened up opportunities for global trade, with raw materials often travelling long distances before they reach their final destination. Global supply chains are often very complex and environmental and social aspects are becoming increasingly important as they take their place alongside key commercial and operating indicators. This makes it difficult for companies to get a clear picture of whether they are sourcing their raw materials responsibly.
The products we use in our day-to-day lives are made using materials from around the world. How can the manufacturers of those products be sure that the raw materials were sourced in an environmentally and socially responsible way?
The palm oil and palm kernel oil industry is a high-profile example of this challenge. Palm oil comes from the flesh of the palm fruit and is an important raw material for the food industry. Palm kernel oil is extracted from the seeds of the fruit and can be used to create a range of solutions. This includes surfactants, which are found in detergent and cosmetic products – whenever a product builds a foam to dissolve grease and dirt, you can assume that it contains surfactants.
These two raw materials and their derivatives are extremely versatile – and the oil palm tree is much more productive than other vegetable crops. However, the palm oil industry has been linked with negative impacts on the environment, as well as on people living and working in communities affected by its activities.
One hectare of land can be used to produce…
Certification systems are one of the most common ways of increasing transparency about the origins of raw materials. For palm oil and palm kernel oil, the Roundtable on Sustainable Palm Oil (RSPO) offers an established certification program: It covers criteria ranging from eliminating deforestation through to respecting the rights of workers and communities. However, while these systems add clarity, they cannot achieve industry transformation on their own.
Joining forces to support farmers
That’s why key players including governments, non-governmental organizations, agricultural businesses and companies that process palm materials are joining forces to go beyond certification. By working together, they support projects that provide smallholder farmers with training in modern agricultural techniques for growing oil palm trees. This empowers the farmers to increase productivity and meet rising expectations for safety and environmental sustainability. It also ensures employment stability and improves livelihoods for workers and their families.
This collaborative approach to supporting smallholders is also in action for farmers of different crops. Guar beans are another example: They can be ground up to create a material that is used in cosmetic products. The majority of guar is grown by independent farmers in India, where the crop is often a critical source of income. By empowering farmers and promoting sustainable farming methods, organizations like TechnoServe aim to increase the global supply of sustainably cultivated guar while also improving living and working conditions.
Together for sustainable supply chains
Alongside activities related to individual raw materials like palm oil, palm kernel oil and guar bean extract, companies can also introduce effective management systems. This typically involves supplier assessments and visiting suppliers to audit their sites. However, companies can have hundreds or even thousands of suppliers around the world. This means assessing and auditing every supplier and every production site for every raw material they buy is extremely time-consuming – and also very expensive.
In 2011, a group of companies from the chemical industry responded to this challenge by establishing the initiative Together for Sustainability (TfS). It was founded to develop and implement a global program to assess, audit and improve sustainability practices within the supply chains of the chemical industry. It currently has 23 member companies worldwide and intends to grow globally. The TfS initiative strives to achieve mutual benefits for both its member companies and their suppliers. In doing so, social and environmental conditions are to be continuously improved for the benefit of all relevant stakeholders, including employees, neighborhoods, local communities and society as a whole.
The highest standards
At Henkel, our supplier base is underpinned by millions of workers in over 100 countries and significantly influences our environmental footprint. For this reason, we recognize our responsibility to consider safety, health, environment, social standards and fair business practice when we select our suppliers.
Our customers and consumers can purchase our products with full confidence that we source our raw and direct materials in line with the highest standards of environmental and social responsibility. While it may feel like the world is getting smaller, the opportunities to promote sustainable practice along the value chain are growing all the time – and we’re committed to exploring these opportunities.