Many Singapore consumer brands do not source for sustainable palm oil, survey finds

More than 85 per cent of the world's palm oil is produced in South-east Asia, mostly in Indonesia and Malaysia, with the oil going into a wide range of consumer products. But cultivation of oil palm has been linked to ecologically harmful practices s
More than 85 per cent of the world's palm oil is produced in South-east Asia, mostly in Indonesia and Malaysia, with the oil going into a wide range of consumer products. But cultivation of oil palm has been linked to ecologically harmful practices such as slash-and-burn deforestation, which can cause problems such as habitat loss, water pollution, transboundary haze and climate change. PHOTO: REUTERS

SINGAPORE - Many Singapore companies do not source for sustainable palm oil, according to a survey on Thursday (Sept 21).

It also found that businesses believe that customers are not clamouring for sustainable palm oil, reducing the incentive to change the way they operate.

The World Wide Fund for Nature (WWF) study polled 47 firms with headquarters here and in Malaysia - the first region-specific study.

It rated businesses on a 12-point scale that measured the proportion of certified sustainable palm oil used in their supply chains.

The judging criteria also looked for membership in the international Roundtable on Sustainable Palm Oil (RSPO) bloc and a commitment to buying only certified sustainable palm oil.

 

Singapore-based Denis Asia Pacific, which is behind Ayam Brand canned food, rated 10 points to top the leaderboard.

Its products use only certified sustainable palm oil, said Ayam Brand country managing director Roy Teo.

"While our total consumption of palm oil is limited, it is possible to make sustainable choices even when manufacturing in smaller volumes," he added.

"We see this business decision paying off through increased employee satisfaction, higher brand value and new business opportunities in Europe, the United States and Australia, where sustainable palm oil has become a market entry criteria."

Another company that fared well was Wildlife Reserves Singapore, which runs attractions such as the Singapore Zoo and Jurong Bird Park.

At least 75 per cent of the palm oil used in its eateries is sustainably sourced.

"We encourage businesses to take this step and consumers to voice their support," said its conservation and research director, Dr Sonja Luz.

But, in general, regional firms did not seem fazed by how customers would perceive the use of non-sustainable palm oil.

Eight companies of the 16 respondents were given scores of zero, meaning that they were upfront about their use of palm oil but had not yet made any progress on sustainability. The four Singapore companies in this category are Sheng Siong, Tong Seng Produce, Viz Branz Holdings and Yeo Hiap Seng.

Eight firms felt there was a lack of consumer awareness and demand for certified sustainable palm oil, so there was no rush to make changes in the supply chain.

Also, nine of the companies that spoke to the WWF said that cost was an obstacle, especially with profit margins at the top of their minds amid tight economic conditions.

The WWF study put consumer brands under the microscope, even as big commodity companies have recently been pushed to step up their sustainability efforts.

Singapore-listed palm oil supplier Golden Agri-Resources - the target of a Greenpeace campaign against illegal deforestation in 2010 - said on Monday that it had made it to the Dow Jones Sustainability Asia Pacific Index for large listed companies with sustainable business practices.

Another home-grown commodities company, Wilmar International, was a founding member of the Fire Free Alliance in 2016. This body comprises non-governmental organisations as well as forestry and agriculture firms.

The regional WWF study had a response rate of just 34 per cent, and only three companies told the environmental group that they are committing to sustainable sourcing, the report said.

In comparison, the organisation's 2016 ranking exercise of 137 companies across Europe, North America, Australia, India and Japan had an 80 per cent response rate.

That survey also found that 70 per cent had thrown their weight behind the use of certified sustainable palm oil.

Still, some Singapore companies that were marked as having given nil returns on the WWF report said that they do make an effort to ensure that the palm oil they use is sustainable.

TungLok Restaurants (2000) executive chairman Andrew Tjioe, whose restaurant group was listed as a non-respondent, told The Straits Times in an e-mail: "We are all for sustainability, therefore we use only RSPO-certified cooking oil, even though it costs us more."

More than 85 per cent of the world's palm oil is produced in South-east Asia, mostly in Indonesia and Malaysia, with the oil going into a wide range of consumer products, from food items like chocolate to soaps and cosmetics.

But cultivation of oil palm has been linked to ecologically harmful practices such as slash-and-burn deforestation, which can cause problems such as habitat loss, water pollution, transboundary haze and climate change.