Key points:

  • New PALM Risk Tool from Global Forest Watch can identify palm oil mills with high historical deforestation and high potential for future deforestation
  • Assessing palm oil mills is an effective way to gauge deforestation risk of the surrounding areas as palm fruit is typically processed within 50km of where it is grown
  • The new tool offers an unprecedented global dataset of nearly 800 palm oil mills and lets companies upload their own data
  • Initial analysis from pilot testing has already helped identify mills in Unilever’s palm oil supply chain located in areas that may be at high risk of deforestation
  • Palm oil producers and buyers around the world now have an effective method to identify high risk mills and engage with them to further reduce and prevent deforestation

WASHINGTON (June 8, 2016)— World Resources Institute finds that analyzing the forests and plantations near palm oil mills can help identify deforestation risk and prevent it. Launched today on Global Forest Watch Commodities, the new PALM Risk Tool will help companies meet their zero deforestation commitments by providing much-needed transparency into the sustainability of the palm oil they buy. WRI conducted an initial analysis of nearly 800 palm oil mills across the world and classified individual mills as having high, medium or low risk of being associated with deforestation. A pilot exercise with Unilever identified 29 high risk mills which, although they represent a relatively small part of their supply chain, will nonetheless be critical for the company’s efforts to reduce deforestation. The analysis is a first indication of the potential risks, to enable Unilever to conduct further in-depth verification, help them prioritize engagement with these mills and work with them to adopt more sustainable practices in order to reduce and prevent deforestation.

Many companies have pledged to eliminate deforestation from their supply chains – the Consumer Goods Forum, which represents 400 companies, announced in 2010 its commitment to achieve zero net deforestation by 2020. Few companies can trace their palm oil to the plantation level where deforestation takes place, but most have data on the industrial mills where their palm oil is processed. Because the oil must be processed at a mill immediately after harvest, WRI determined that evaluating the surrounding area can help gauge deforestation risk.

The PALM Risk Tool conducts an automatic analysis of satellite imagery and other spatial data within 50km of each mill to determine the threat to forests nearby. It then ranks each mill as low, medium, or high risk based on past behavior and proximity to forests, carbon-rich peat soils, fires, and protected areas. It includes an unprecedented global dataset of nearly 800 mills and companies can upload their own mill points into an interactive map.

Companies are using the new PALM Risk Tool to conduct detailed risk assessments and work together with mills and producers perceived to be at high risk to improve sustainable forest management and reach their deforestation commitments.

Failure to monitor deforestation carries increasing risks for businesses in the palm oil sector. In April, major palm oil supplier IOI was suspended from using Roundtable on Sustainable Palm Oil (RSPO) certification after numerous allegations of deforestation and labor rights violations.

The PALM Risk Tool was launched at RSPO’s European Roundtable Meeting in Milan, Italy attended by hundreds of palm oil producers, buyers, and NGOs. The tool was developed by Global Forest Watch, a partnership led by World Resources Institute, in collaboration with Proforest and Daemeter, with pilot testing from Unilever and several other corporate partners.

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Crystal Davis, Director of Global Forest Watch, World Resources Institute
“This is a great example of how data and transparency can drive impact. This tool combines previously unavailable data on where palm oil mills are located around the world and cutting edge satellite monitoring technology to show companies exactly where they should focus their efforts to achieve their sustainability goals. It won’t happen overnight, but this tool can point companies in the right direction.”

Dhaval Buch, Chief Procurement Officer, Unilever
“We are committed to working with others to eliminate deforestation from the world’s commodity supply chains. To do this we need to ensure our own purchases are fully traceable and certified sustainable and encourage whole industries to set and meet high standards. In the case of palm oil specifically, it is important that we work closely with our suppliers and expert partners to make sure we have robust traceability and risk verification systems on the ground. In 2016, our Sustainable Palm Oil Sourcing Policy was re-launched with stronger commitments on human rights, smallholder inclusion and traceability implementation. We have also moved forward our target of achieving 100% fully physically certified oil to 2019 from 2020. The PALM Risk Tool will facilitate increased transparency, help us identify high risk mills and support us as we work to drive the transformational change needed in the palm oil industry. This is why we are supporting its development and the further strengthening of the Tool in key areas such as the mapping of National Parks.”

Darrel Webber, Secretary General, Roundtable on Sustainable Palm Oil (RSPO)
“The RSPO welcomes any effort that can help curb deforestation. This is why the RSPO recently launched RSPO NEXT, a set of additional criteria for palm oil production to help companies back up their no deforestation policies. By combining the risk map analysis provided by PALM Risk Tool and purchasing palm oil from RSPO NEXT-verified growers, companies will be sure that their supply chain is certified sustainable.”