Palm oil has a huge carbon footprint © Solness/Greenpeace
Since the rapid turn-around of Unilever in the wake of our Dove campaign, our campaigners have met several times with their executives. They've been discussing how to build a coalition of allies throughout the palm oil industry which will support a moratorium on further deforestation in Indonesia to grow new plantations. As Tracy mentioned last week, even though things might go a bit quiet on this campaign for while, that doesn't mean we're not working away behind the scenes.
In the meantime, however, we've been sharing information with Unilever about the true cost of the palm oil used by the industry and its effects on climate change. Using research compiled when we were planning our campaign, we've cited Unilever as a case study to show how the supply chain across the entire palm oil industry has a massive carbon footprint, largely down to tropical rainforest and peatland clearance which releases huge amounts of greenhouse gases into the atmosphere.
In economic parlance, a carbon footprint is known as 'carbon liability', or what impact would be felt on a company's profits if carbon emissions were factored in. Traditional strategies for economic growth don't tend to consider environmental or social impacts although a corporate initiative called the Carbon Disclosure Project (CDP) is attempting to redress the balance, at least as far as carbon emissions are concerned. Through the CDP, a number of major companies (including Unilever) are in the process of analysing the impact they have on the climate change and evaluate the risks they face if they continue with a 'business as usual' frame of mind.
That companies like Unilever are thinking along these lines is encouraging, but the information we've released shows how companies have under-estimated the carbon emissions related to the palm oil they use. For example, Unilever estimates that greenhouse gas emissions from its supply chain are on a par with those of Sweden (around 50 million tonnes), but emissions associated with converting rainforest and peatlands into agricultural land haven't been included in their calculations. And if a price was to be put on the true emissions related to Unilever's palm oil, using a figure of 30 euros per tonne of carbon dioxide (as estimated by respected industry group Point Carbon) means that a dent to the tune of 714 million euros would be made in their annual profits - based on Unilever's profits in 2007, that's 14 per cent.
The report has been sent to financial institutions and individual investors with stakes in companies along the palm oil supply chain. After seeing this research, our hope is that these investors will more clearly understand the risks their companies are exposed to, and take steps to reduce those risks - in other words, by following Unilever's lead and pushing for the moratorium. Big names like Nestlé, Procter & Gamble and Kraft are signed up to the CDP, and they also use large quantities of palm oil so for this fledgling coalition to succeed we need them on board as well.
