Palm oil is an important raw material and crop in order to meet the growing demand for vegetable fats & oils. AAK continues to use palm oil because the crop has the highest yields compared to any other vegetable oil per ha, it contributes to global food security, it provides an income directly to local communities, since 40% of the palm is being produced by smallholder farmers. Next to that it has unique functional and nutritional characteristics. Palm oil can be produced in a sustainable way, without the negative and social impacts. This requires a market transformation across all stakeholders of the palm oil value chain. AAK has been at the forefront of this change, as co-founder of the Roundtable of Sustainable Palm Oil back in 2003, today the industry standard for certified sustainable palm oil.
Sustainable palm oil within AAK
Responsible sourcing of palm oil remains a crucial activity in our sustainability journey. The scale of the crop globally, as well as environmental and social challenges in each region, requires a consistent and structural approach and collaboration across the supply chain.
Understanding our supply base
Understanding our supply base is a critical step in furthering sustainability, providing the baseline by which we prioritize the action we take both within and beyond our supply chains. Thus, we work closely with our suppliers and stakeholders to obtain traceability data.
We are collecting all mill data and are working to increase traceability to plantation (TTP). This requires sector-wide efforts by companies and other stakeholders, which AAK acknowledges and commends. Palm oil supply chains involve millions of small producers, many of whom are not responsible for clearance. For that reason, AAK supports a risk-based approach to TTP, which maps plantations where there is a risk of deforestation at village level.
AAK is one of the founding members of the RSPO and continues to be very engaged in the RSPO and its board. This organization has played a foundational role in the understanding of sustainable palm production as well as in its thought leadership to sector-wide transformation.
We believe RSPO certification remains one of the most reliable ways to ensure palm oil production meets high environmental and social standards. The adoption of the new RSPO principles and criteria in November 2018 has further strengthened the value of this certification. We intend to increase our purchase of RSPO-certified volumes as part of our shared responsibility and to stay in line with end-user and customer demand.
Engaging with suppliers and farmers
Because of our position in the value chain, our suppliers play a critical role in driving the implementation of our policies.
We expect our suppliers:
- To sign AAK supplier code of conduct and AAK sustainable palm policy or to have a verified and aligned policy in place
- To proactively monitor deforestation in their supply base
- To provide mill data and to drive progress in traceability to plantation
- To collect concession maps of their third-party supply base
- To manage grievances proactively
- To be or become member of the RSPO
Progress is being managed through supplier scorecards that we have developed together with Proforest as part of our effort to strengthen our supplier engagement work. These scorecards enable our internal organization and our suppliers to better understand the current status of where each supplier stands regarding meeting the AAK sustainable palm criteria, as well potential gaps that need to be closed.
Driving impact beyond our supply base
Via our collaboration with Forever Sabah, AAK continues to support the jurisdictional certification approach in the Malaysian state of Sabah, where only 20 percent of the independent smallholders hold the title to their land.
We also support a unique project in Mexico together with Solidaridad, the objective of which is to develop the sustainability of three palm oil social enterprise cooperatives, with the ultimate ambition of achieving RSPO certification.
In order to build and deepen common understanding of issues, industry collaboration is necessary. AAK has had a seat on the board of governors since the founding the RSPO.
AAK palm oil policy
This policy complements our Code of Conduct for Raw Material Suppliers and our policy on Responsible Sourcing of Vegetable Oils with additional commitments for palm oil suppliers. The policy applies to all palm oil, palm kernel oil and their derivatives at all origins.
AAK recognizes RSPO certification as the foremost established and stable systematic organization and standard for sustainable palm oil.
The focus points of our 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
- 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.
Public mill list and grievance addendum
Our universe of mills list is updated twice a year. To access the full 2019 mill list, please click here: AAK Public Mill List.
In addition, we have published a grievance addendum that lists the companies that we have recorded a grievance against. This list will be updated on a more regular basis. To access the grievance addendum, please click here: Grievance Addendum, January 2020.
Please find below the latest palm oil developments, as stated in "AAK's progress report on sustainable palm oil" from April 2020.