Wednesday, October 14, 2009

Selective Corporate Social Responsibility

One of the more controversial issues in CSR currently is the growth of the palm oil industry. Demand for palm oil outstrips supply. This is caused in part, by many Governments committing to increase the amount of biofuel sold because it has in recent years been regarded as a quick fix to reduce greenhouse gas emissions. By 2020, 10 % of fuel sold in the EU will be biofuel. China expects 15 % of its fuel to be grown in fields, while India has committed to 20% of its diesel to be biodiesel by 2012. In the UK, one in four products (including food, personal hygiene and cleaning products) contain palm oil and in the USA palm oil is a multibillion dollar industry. The spotlight is clearly on the private sector.

In reaction to the exponential growth, many high profile campaigns highlight the detrimental effects of using palm oil. Large companies have been named and shamed for their unsustainable palm oil practices and others have gone as far as completely banning palm oil from their products. ‘NO PALM OIL’ logos are popping up almost daily. So the industry responded with sustainable palm oil. Corporate giant, Unilever (with pressure from Greenpeace and the Roundtable on Sustainable Palm Oil) have committed to only use sustainable palm oil, despite fears that demand will outstrip supply and they are not alone.

But there is a catch and consumer pressure is still one of the most powerful forces driving the industry. Cadbury New Zealand was forced to switch back to cocoa butter in their Dairy Milk product after consumers protested against the use of palm oil, even though it was sustainable. The Body Shop came under fire for using sustainable palm oil from Columbia, because despite the ‘green’ credentials, the owner of the land reportedly threw peasants out of their homes to make way for more palm oil plantations. And herein lies the rub: environmental sustainability alone is not enough. This is where true Corporate Social Responsibility (the completely embedded version that includes ethical considerations) can separate the greenwash marketing campaigns from the truly impressive, profit making giants.

Palm oil itself is not the issue. The product is a healthy alternative to trans fatty acids. For a while Palm oil was billed as the biofuel of choice, but the production, manufacture, transportation and just about every aspect from plantation to product are in the spotlight of the debate. This is a fine example of how CSR is crucial for the industry to survive. This month saw the World Bank freeze financial support for the industry until the environmental and social impacts of palm oil are investigated.

The ramifications of ignoring the agenda are clear and what the rest of business can learn from the palm oil industry is that greenwashing, paying lip service and only focussing on one aspect of CSR may work temporarily, but as the old adage goes, you can’t fool all of the people all of the time.

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