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Palm Oil
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Johnson & Johnson has a long-standing commitment to environmental stewardship grounded in Our Credo that reminds us that we must protect the environment and natural resources that we are privileged to use. This responsibility includes a commitment to do our part to curtail the unsustainable rate with which the Earth’s natural forests are disappearing. One significant contributor to deforestation is the planting of palm oil plantations, mostly in Southeast Asia, to meet the increasing demand for palm oil used in food, fuels and, to a lesser extent, ingredients used in household and personal care products.

Seventy-six percent of palm oil is grown for food and fuel, and countries including Indonesia, Malaysia, India and China use it as a staple oil in cooking and food preparation. The remaining 24% of palm oil is used as a starting material for the chemicals industry to create ingredients used in candles, detergents, shampoos and many other consumer products. Because of the seriousness of issues like deforestation and human rights related to palm oil production, our efforts to responsibly source our ingredients derived from palm oil are disproportionate to our actual usage—about 0.1% of palm oil used globally.

Our Responsible Palm Oil Commitment

For over a decade, we have been working on improving the sustainability of our ingredients derived from palm oil.

  • Our journey started in 2006 when Johnson & Johnson joined the Roundtable for Sustainable Palm Oil (RSPO) , a multistakeholder organization that has developed a set of principles and criteria for certified sustainable palm oil.
  • We began purchasing RSPO certificates in 2010 to cover all our palm oil usage and have been publicly sharing our progress through the Annual Communication of Progress since 2011. These certificates support the production of certified palm oil by providing a financial reward to the growers who are certified to the RSPO standard.
  • In 2013, Johnson & Johnson co-developed an innovative potato-based surfactant with a supplier that is a potential alternative to a palm- based surfactant. While this innovation is not a “silver bullet” for the breadth of ingredients currently made with palm oil, it is an example of how innovation can be part of the solution to deforestation.
  • In 2014, we became members of The Forest Trust (TFT), an international nonprofit helping companies like us that are committed to transparent supply chains. In the same year, we worked with The Forest Trust (TFT) to develop and implement our Responsible Palm Oil Sourcing Criteria, which outline our expectations for the sources of palm oil entering our supply chains. The criteria specifically address controversial sources of deforestation and social practices that will not be tolerated in our palm oil derivatives supply chains. We have also updated our criteria to adopt the High Carbon Stock Approach, which includes High Conservation Value (HCV) and Free Prior and Informed Consent (FPIC).
  • In 2016, we started to source RSPO-certified segregated soap noodles from a Palm Oil Innovation Group (POIG) member, equaling approximately 12% of our total palm oil and palm kernel oil consumption.
  • In 2018, we updated our nonconformance process to further differentiate the types of action pathways available to Johnson & Johnson as a palm oil derivatives buyer.

Despite all these efforts, concerns over environmental and social conditions remain, as some producers in the palm oil industry continue to expand and threaten high conservation value and high carbon stock forests. Reports of significant forest destruction demonstrate that the approaches taken thus far, by us and by others, are insufficient. Something has to change.

Our Pursuit of Transparency

At Johnson & Johnson, we have a long-standing commitment to transparency that allows us to earn the trust and confidence of our stakeholders. To impact positive change regarding the sustainable use of palm oil, we have undertaken the enormous task of working toward transparency in our palm oil derivatives supply chains alongside TFT.

While tracing the source of our palm oil derivatives might seem simple, liquid commodities, mixed and shipped around the world and then altered into other ingredients over multiple steps and suppliers in the supply chain, present significant challenges. It is substantially more difficult for derivatives buyers, such as Johnson & Johnson, to make progress toward transparency and sourcing goals than direct buyers of palm oil because we rely on our direct ingredient suppliers to cascade and enforce our expectations up multiple tiers of the supply chain.

We have nonetheless made progress, working with TFT to create a hub for our suppliers to share supply chain information in confidence. Twelve of our top direct suppliers, which represent 83% of the palm oil entering our upstream supply chains, have given us permission to disclose our relationship. It is our suppliers’ business decision to share publicly details about their supply chains that they may consider sensitive and competitive, and several have given us permission to disclose on our website the lists of potential mills they have provided to TFT.

Our Progress and Path Forward

Increasing Our Use of Certified Palm Oil
We are committed members of the RSPO and believe a strong, supported and recognized standard is the best way to ensure long-term responsible production. We are committed to using our voice to strengthen the RSPO’s governance and standards to promote alignment with our sourcing criteria and needs. As a step forward, we are committed to purchasing certificates, using RSPO-certified material from mass balance and segregated sources, and increasing our supply of certified material every year. The eight tons of palm oil that we buy from a distributor are (RSPO) Certified Mass Balance, which supports the sustainable production and introduction of palm oil into the market.

We currently have 12% RSPO certified segregated supply in our soap noodle supply chains, and we cover all of the palm oil coming into our supply chains with a combination of this RSPO segregated certified supply, mass balance certified supply and book and claim certificates.

Implementing Our Responsible Sourcing Criteria
TFT works with our suppliers to obtain specific supply chain information that can be assessed and monitored for conformance with our sourcing criteria. We also use tools such as Global Forest Watch data, independently verified reports of noncompliance and on-the-ground NGO information to understand if there are instances of noncompliance.

In instances of verified nonconformances to our Responsible Palm Oil Sourcing Criteria, we have a robust nonconformance process to engage and drive time-bound action plans. Our preference is to engage entities in our supply chains to improve and partner closely with TFT on this front. Should those efforts not meet our expectations, we will take incremental commercial actions, including adding producers and mills to no-buy lists and restricting business with direct suppliers.

Creating Broader Impact
We firmly believe that creating change through our purchasing power is just part of the solution. At Johnson & Johnson, we are committed to playing an active role in changing the conditions on the ground—both in smallholder communities and more broadly.

For example:

  • In partnership with The Forest Trust Rurality Project, we created an action plan specifically developed for farmers in the Sei Nilo region of the Pelalawan subdistrict in Indonesia to improve palm oil fruit quality, shorten supply chains and identify other potential commodities as alternative income generators.
  • Through efforts with The Sustainable Trade Initiative, we helped increase productivity of palm oil plantations through smallholder capacity development and established farmer institutions that supervise and facilitate farmers in obtaining RSPO certification in Rokan Hulu, Indonesia.
  • We supported an initiative with the University of Wageningen that was successful in increasing yields in smallholder palm oil fields and training farmers on implementing better management practices starting from the constraints faced on existing farms. We have extended this project into 2019 to monitor progress on the effect of the program on yields and the impact of the training.

As a healthcare company, we are also taking a lead in areas facing potential deforestation where we can have an impact on improving the health and well-being of individuals and families.

Johnson & Johnson and EcoHealth Alliance are partnering to pioneer the development of a “One Health” policy framework for making land use decisions that take into account socioeconomic factors together with environmental and human health outcomes. This partnership is initially focused on Liberia, which has significant remaining intact forests. The partnership aims to bring together the private sector, local communities and government to demonstrate how this framework can be used to promote sustainable economic development, protect key biodiversity areas for conservation and reduce risks to human health from the emergence of infectious diseases.

Moving Forward Together

Progress on the sustainable production of palm oil has been slow, and significant concerns remain as individual supply chain efforts are not creating change fast enough.

We need more collective efforts with our consumer goods counterparts, such as pooling resources to change practices on the ground, engaging larger national buyers and working with governments on sustainable policies. As a small buyer in this space, we are particularly enthusiastic about working with others who are ready to try something bigger and bolder to stop deforestation related to palm oil, while taking the lead where our expertise as a healthcare company can make the greatest impact.

We believe anything is possible when committed people and organizations put their resolve and resources together.

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