Element 1: Assess and plan implementation
If your company has committed to sourcing palm oil responsibly, then your business will likely already have policies setting out the environmental and social issues you want to address and the targets you aim to meet. However, to develop sound policy commitments, companies need to go through important steps, such as analysing the current situation and setting internal goals.
This Briefing Note provides guidance for companies on how to develop responsible sourcing commitments and implement them throughout the supply chain by establishing a timebound action plan. This element aims to do the following:
Outline the importance for companies to develop responsible sourcing commitments and an implementation strategy considering the key challenges of deforestation, peat conversion and exploitation of the rights of workers, local communities and indigenous people at different stages of the supply chain.
Consolidate best practices in the palm oil sector for certifications, sectoral initiatives and collaboration at landscape level through some practical examples from different companies
Outline a process or implementation plan based on the strategy in place, with clear Key Performance Indicators (KPIs) to allow reporting and monitoring.
1. DEVELOP RESPONSIBLE SOURCING COMMITMENTS
Develop a comprehensive policy or set of policies that cover commitments on environmental and social aspects of palm oil production and sourcing which refer to No Deforestation, No Peat and No Exploitation (NDPE) commitments or the Accountability Framework Initiative (AFi) references on ‘How to write a strong ethical supply chain policy’. This policy should be applied at company or group level and should cover the company’s whole palm oil supply chain: its own operations including joint ventures, all direct and indirect suppliers, and all sourcing origins. Finally, transparency and accountability are key to the success of a policy. Any policy should be public and signed off by senior management representatives.
It is expected to include a cut-off date related to their No Deforestation commitments as well as definitions of the key terms that are being used and should align with accepted palm oil industry standards and definitions.
The commitments should be disclosed publicly through various reporting platforms to report progress towards compliance.
2. DEVELOP IMPLEMENTATION STRATEGY
Supply chains are often extraordinarily complex, involving multiple intermediaries and ultimately millions of producers. Hence, companies need a variety of approaches to implement their commitments.
Companies should develop an implementation strategy to address environmental and social issues within their own supply chain and beyond their supply chain, which then informs the level of engagement and approaches required with suppliers. It should consider and prioritise actions based on social and environmental risks in the company’s supply base, the level of traceability, and proportionality. Engagement within their own supply chains should take into consideration supply chain risks, leverage and the palm oil footprint of selected suppliers, whilst engagement beyond the supply chain could help to address the complex issues faced by the palm oil industry through sectoral and/or landscape initiatives based on their commitments, resources, and influence.
3. DEVELOP IMPLEMENTATION PLAN
An implementation plan outlines the key actions a company will take over a given timeframe to ensure that the palm oil they are sourcing and/or processing is 100% compliant with the requirements and commitments made in the policy. A good implementation plan needs to include robust targets using a SMART (Specific, Measurable, Attainable, Relevant, and Time-bound) approach and should have clear Key Performance Indicators (KPIs) to allow reporting and monitoring. It also outlines clear definition of what actions must be carried out (Activities), who is responsible for the delivery (Resources) and when deliverables are due (Timelines).
The timebound implementation plan should include actions both within and beyond the supply chain to address and mitigate negative impacts of palm oil production and deliver positive outcomes. It should be revised, updated and aligned with industry standards, as well as noting identified individuals in the company who are responsible for delivering the different activities. Each activity should be given a timeline for completion to measure and report the progress made against the commitment. It is important to set realistic timelines that align with the company strategy.
More information is available in the briefing note below – BN01 Assess and Plan Implementation
