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The Palm Oil Paradox

So the use of palm oil leads to rain forest deforestation – right?

Well yes – it’s true that in Malaysia and Indonesia there are clear issues with forest being cleared for palm oil production.

But and its quite a big but palm oil has the highest yield per hectare of any of the alternatives. That means that alternatives like grapeseed soybean and coconut oil all require more land to produce the same amount of product.

At Circle Squared we rate companies on among other things their environmental impact but what should we do about palm oil? Should we tweak our scoring algorithm to penalise companies that use palm oil or reward them if they are members of the Roundtable on Sustainable Palm Oil that provides as much of a regulatory function as exists right now via a certification scheme.

Should we applaud the stance of the UK food retailer Iceland which has eliminate palm oil from all its own brand products. Richard Walker Iceland’s Managing Director makes the point that its as much about where palm oil is grown that causes these issues. He is correct it’s a different thing to clear virgin rain forest in Indonesia than plant another field of rapeseed in an existing agricultural area.

Iceland’s leadership, engagement and awareness raising can only be positive however pause – if all retailers took the same measures it will cause a similar sustainability issue elsewhere.     

Banning palm oil worldwide is not the answer but we know many of our supporters are concerned about this issue. At present our scoring system penalises companies for using palm oil initially buy returns those same points if the company is a member of RSPO making it neutral

Is this the right approach? we’d love to know what you think!