Sustainability is a huge topic in modern business, as corporations and environmental groups alike strive to create more sustainable methods of production. For Indonesia, the world’s largest producer of palm oil, sustainability has been a sticking point. In the last three decades, plantations have expanded by over 2000 percent, and the total land area currently devoted to palm oil production is an estimated 7 million hectares. Some corporations around the world are realizing the negative environmental effects of palm oil production and are choosing to begin using only palm oil that is considered sustainable.
McDonalds, Unilever, and Nestle are among the 87 companies that have chosen to use only sustainable palm oil by 2015. Growers of palm oil must meet specific requirements in order to receive certification to be considered producers of sustainable palm oil. Negotiating land with local communities and refraining from clearing virgin forests are among the guidelines that must be met. Unfortunately, many of the companies that have agreed to use only palm oil by 2015 have not yet started doing so.
Each year 350,000 hectares of land are cleared for palm oil production and this is having devastating environmental effects. This mass clear-cutting of trees causes large amounts of carbon dioxide to be released into the atmosphere, and is endangering many of the local flora and fauna.
Many corporations like the idea of sustainable production, but are hesitant to implement sustainable palm oil because it is more expensive. This is likely why consumer goods manufacturers have purchased only 44% of the five million tons of sustainable palm oil in circulation. Another barrier to entry for companies is the necessary complex changes to ingredient receipting, tracking, handling, and usage. Large, developed companies so far are the only companies that have been able to afford the additional costs associated with sustainable palm oil. Hopefully, other companies will look beyond these additional costs and see the environmental benefits from using sustainable palm oil.