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The move towards full sustainability

in the palm oil supply chain

Responsible sourcing of palm

The oil palm has the highest yield of all oil crops—six to ten times more than other oil seed crops. Globally, palm oil is the most produced and consumed vegetable oil, accounting for 30 percent of the world’s vegetable oil production. Therefore, a sustainable palm oil production is of utmost importance. AAK is a dedicated contributor in that work.

Timeline of AAK's way to fully sustainable palm oil - Sustainable Growth - AAK

Palm oil is a critical raw material in feeding an ever-growing global population. Therefore, producing palm oil sustainably is important to all of us. AAK is committed to its role in supporting the move towards full sustainability in the palm oil industry.

Roundtable on Sustainable Palm Oil

However, palm oil production has raised serious concerns relating to deforestation and the elimination of endangered animals, to name two. As a consequence, the Roundtable on Sustainable Palm Oil (RSPO) was established in 2003. AAK is one of the founding members and continues to be very engaged in the RSPO and its Board.

Sustainable palm oil within AAK

While contributing significantly to a more sustainable palm oil industry, RSPO is not perfect. Many are of the opinion that plantation expansions raise concerns with regards to environmental and social issues. At AAK, we share these views and have consequently developed our palm oil policy with additional requirements that build upon RSPO Principles & Criteria. Palm oil traceability to origin is key to these requirements as a means to be able to assess if the requirements are met. Based on the RSPO requirements combined with the additional requirements in our policy, we expect our palm oil supply base to become fully sustainable.

The policy for full sustainability

In June 2014 we saw the need to launch a policy specifically focusing on our commitment towards obtaining a fully sustainable palm oil supply chain. As a part of this work we have, in close partnership with Proforest, overcome many challenges and achieved significant progress towards our objectives.

The focus points of our updated policy are:

  • Increase volume of RSPO certified palm oil.
  • Source palm oil produced without destruction of High Conservation Value (HCV) areas, High Carbon Stock (HCS) forest, or peatland of any depth.
  • Ensure that Free, Prior and Informed Consent (FPIC) takes place prior to new plantation development.
  • Ensure traceability in our palm oil supply chain to mills by 2014, and with an ambition to achieve traceability to plantations by 2018/19.
  • Commitment to support smallholders.

AAK Palm Oil Policy applies to palm oil, palm kernel oil, and their fractions of all origins.

Click here to see our policies, codes and progress reports. 

Increased transparency

As part of our continuous improvement journey we have published our universe of mills list at our website. The list is updated twice a year. In addition, we have published a grievance addendum that lists the companies that we have recorded a grievance against. This list will be updated and published on a more regular basis. We believe that with this initiative we meet the increased transparency needs of our customers, their customers and other stakeholders. To access the list of mills, please click here: AAK Public Mill List. To access the grievance addendum, please click here: Grievance Addendum, January 2020.

Chain Reaction report
On January 24, 2019, Chain Reaction, an NGO, issued a report on AAK, including reference to palm sustainability and related financial implications. Overall, the report gives a balanced view of AAK’s performance and impact regarding our palm oil supply chain and recognizes AAK’s position in the supply chain as a buyer of mainly refined oil. There is a fair assessment of AAK’s palm sustainability credentials, and inclusion of the many positive aspects of AAK’s palm sustainability policy and its implementation, as well as AAK’s activities in industry bodies and with smallholder projects.  

We welcome the critical nature of the report and will take actions to address the key issues highlighted where we believe to have an impact. We recognize the need to accelerate our sustainable palm oil policy implementation in India. Both India and China have active local markets in palm oil, with limited traceability to mill. We seek to continuously improve our sustainable sourcing for both locations. 

We continue to work towards transformation of the palm oil industry, and to move our suppliers towards sustainability in their supply chains. However, although significant progress has been made, the journey is still long and challenging.

AAK is committed to do its utmost. 

For more information, please contact: palmgrievances@aak.com 

Important notice on Indofood (November 9, 2018): 
AAK has supported the RSPO complaints process regarding Indofood, and is pleased to see an initial conclusion which identifies issues and proposes a way forward, with sanctions if required actions are not carried out by Indofood.

With our support, AAK’s tier 1 suppliers have previously ceased sourcing from Indofood.

Please find below the latest palm oil developments, as stated in "AAK's progress report on sustainable palm oil" from October 2019.

Get in touch with your Co-Development partner

AAK House of Sustainability

Sustainable growth is the key objective of our strategy. For us, it is about our responsibility towards all of our key stakeholders—the local communities where we operate, our customers, our employees, our investors, and our suppliers.

More about our sustainability work

Scaling up smallholder capacity

AAK has identified the innovative jurisdictional approach to palm certification in Sabah as a potentially highly effective approach to sustainable smallholder production.

Responsible sourcing of shea

The shea kernel is only about two and a half centimeters in diameter. But what it lacks in size it makes up in oil concentration—and a unique history.

Responsible sourcing of coconut

Coconut-growing countries in Asia-Pacific rely on the sale of coconut products as export income. Find out more regarding AAK’s coconut supply chain here.

Responsible sourcing of rapeseed

Rapeseed oil is one of the most important vegetable oils used in food as well as biodiesel. Today, rapeseed is the oil plant of Northern Europe and a key raw material for AAK.