Poor showing by Singapore firms on WWF's palm-oil scorecard

Singapore

A GREATER proportion of Singapore brands than the global average source and use unsustainable palm oil - practices that are at the root of environmental issues such as the haze and deforestation, says the World Wide Fund for Nature (WWF).

In its new "The Palm Oil Buyers' Scorecard - Malaysia and Singapore 2017", an initiative to introduce transparency into South-east Asia's palm oil industry, the WWF named homegrown companies such as Breadtalk, Crystal Jade and Dairy Farm as being among those that are not transparent about their palm oil usage and which do not source sustainable palm oil.

The WWF's scorecard is based on questionnaires it sent to 27 companies headquartered in Singapore and 20 companies headquartered in Malaysia in the first half of this year. It asked these companies about their core actions and commitments in sourcing for sustainable palm oil, and scored them ranging from those considered to be "leading the way" in sustainable palm oil practices to those who were "non-respondent".

Of the 47 companies that were contacted, only a third responded to the WWF and disclosed information on their palm oil usage. Two-thirds of the companies approached - 17 companies from Singapore and 14 from Malaysia - declined or ignored the WWF's request for information and were categorised as non-respondents "not known to have any public sustainability policies related to palm oil".

Out of the 16 companies that responded, half scored points while the remaining reported no actions taken to support the use of sustainable palm oil.

In comparison, global brands had an 80 per cent response rate and over 60 per cent have palm oil commitments. On the bright side, the top companies in the region that emerged as local leaders provided a clear indication that sourcing sustainable palm oil is possible, paving the way for others in the region to follow suit, the WWF said.

Elaine Tan, chief executive officer of WWF-Singapore, said: "Unsustainable practices in the palm oil industry are at the root of the transboundary haze and deforestation. Singapore is at the heart of a region that supplies 85 per cent of the world's palm oil. Our local brands need to show leadership by being accountable for their palm oil use and take real action to source sustainably."

Companies surveyed cited the lack of internal capacity as a key obstacle to progress in adopting sustainability commitments.

The WWF noted that there was a distinct lack of staff responsible for identifying and managing business exposure to wider sets of supply chain and reputational risks.

Most companies in the region lack sustainability or procurement teams to manage the procurement of sustainable palm oil.

Top challenges that the surveyed companies cited as deterrents in the sourcing of Certified Sustainable Palm Oil (CSPO) were the price of sustainable palm oil and a lack of consumer awareness and demand for such products.

The WWF's Scorecard report said there is a perception among companies in Malaysia and Singapore that sustainable sourcing comes at a considerably higher cost.

But the WWF pointed out that current industry rates for sustainable palm oil options start at less than one US cent more per litre.

As for the lack of consumer awareness and demand for sustainable palm oil, the WWF said research has shown that consumers are willing to pay up to 10 per cent more for sustainable products, especially products that do not contribute to deforestation and haze.

In response to these findings, WWF-Singapore said it launched a campaign to attempt to demonstrate to local brands that consumers care about and support sustainable palm oil. Consumers can send emails to brands via palmoil.sg and urge company CEOs to take a pledge to be transparent with their palm oil use and start taking steps to source sustainable palm oil.

Since the campaign was launched, WWF-Singapore said, brands such as Bee Cheng Hiang, Super Group and Tung Lok have made commitments to begin their journey on sustainable palm oil use by signing the WWF's pledge.

Ms Tan added: "People want to know what goes into the products they buy and the real impact of it. Through this campaign, we hope to demonstrate to popular local brands that their customers want them to do their part in a preventable environmental problem that every person in Singapore experiences."

The Palm Oil Buyers' Scorecard - Malaysia and Singapore 2017 closely follows the methodology used in the WWF's international Scorecards, first published in 2009, to allow a comparison of the progress in commitments and actions by regional companies with those of global market leaders. The WWF hopes its regional scorecard would serve as the impetus for companies to improve their actions in the sourcing of sustainable palm oil.