L’Oréal directly purchases less than 320 tonnes of palm oil every year, but consume, via the ingredients purchased from its suppliers, palm oil or palm kernel oil derivatives in a quantity approximately equivalent to 70,000 tonnes of palm oil. These derivatives are glycerol, fatty acids or fatty alcohols, ingredients used in products for their emollient or foaming properties.
Even though its consumption remains low, representing 0.1% of worldwide palm production, the Group want to be among the most responsible companies in the world and to lead by example on the issue of palm oil.
Since 2010, 100% of the palm oil it purchases meets the Roundtable on Sustainable Palm Oil (RSPO) standards, via the Segregated (SG) model, which is one of the most demanding. But the challenge for a company like L’Oréal is the traceability of the supply chain of palm oil derivatives and how to improve the practices within this supply chain.
The Group pursues a threefold innovative approach.
1. Tracing back derivatives to make full transparency:
Concerning the derivatives, which are also 100% certified, L’Oréal has increased the proportion of its Mass Balance purchases, which amount to 70% at the end of 2019 (versus 54% in 2018); the remainder continues to be covered by the RSPO Book&Claim model.
And the Group decided to go one step further than RSPO certification, in order to ensure a deforestation-free and sustainable palm production. Since 2014, it deployed an unprecedented approach within the oleo-chemicals sector and started to map its entire supply chain and to trace derivatives back to their origin.
To date, its research has made it possible to trace 95% of its derivative volumes back to refineries, 88% back to mills and 28% back to plantations. L’Oréal’s goal is to achieve 100% traceability, a first step to ensure compliance to Zero Deforestation among the concerned suppliers.
2. Supporting independent smallholders
L’Oréal is also committed to support independent smallholders, who face challenges such as deforestation and difficult living conditions. Through a multi-stakeholder partnership, L’Oréal helps to connect independent smallholders to the market demand for “Zero Deforestation” palm oil, fostering sustainable agricultural practices.
3. Driving change in the palm sector by transforming purchasing policies.
L’Oréal created a “Sustainable Palm Index”. These new evaluation criteria for assessing palm derivatives suppliers are based on their commitments and achievements as regarding supply chain knowledge, sustainable sourcing practices and compliance with L’Oréal Zero Deforestation policy.
In early 2017 the Group has published this new Sustainable Palm Index and made it available for all companies, business and partners of the palm sector. The aim is to support the effort of all stakeholders to commit to sustainable palm sourcing and achieve Zero deforestation.