Even including recent acquisitions, 29 percent of the palm, palm kernel and technical palm oil used by AAK globally is RSPO certified, as shown in the most recent Annual Communication of Progress (“ACOP”). The previous report included 27 percent take-up, so there is a marginal improvement. Within the 29 percent reported, 21 percent is segregated, 6 percent mass balance and 2 percent GreenPalm certificates. Uptake by AAK customers varies around the world, with, as might be expected, much more significant levels in Europe and the US than in other areas. AAK’s target is firstly for all crude palm oil purchases to be certified by the end of 2018, noting that this will require a significant increase in demand from customers, particularly outside of Europe and the US. 26 The second target is for all AAK palm purchases to be RSPO certified by the end of 2020. AAK continues to plan to meet this target which was intended, and which remains to be challenging, particularly as AAK in many instances is a secondary processor. This target is in line with the RSPO’s intention of a 100 percent certified sustainable palm oil European market by 2020. All significant AAK sites are RSPO supply chain certified. RSPO certified palm oil Smallholders Significant supplier Globally, smallholders produce a significant proportion of the world’s agricultural commodities. Palm oil is no exception, with over 40 percent being produced by independent or schemed smallholders. These smallholdings are often a critical source of family income but, if managed badly, can also often be drivers of environmental and social impacts, including deforestation. This can mean negative impacts not only on the environment, but also on the smallholders themselves. Such negative impacts could be biophysical, such as poor water quality or reduced soil fertility, but also economic due to lower yields or exclusions from global supply chains which have clear policies on deforestation, peatland, and broader best management practices. GreenPalm option Through the Book and Claim GreenPalm system, AAK has been able to support communities of independent smallholders for whom GreenPalm has been the only accessible RSPO supply chain option. Outreach and education Nonetheless, AAK also recognizes that smallholder inclusion in supply chains is a key issue requiring action on a number of fronts. Responsible production by smallholders compliant with AAK commitments requires resources and know-how, which is typically out-of-reach for an independent smallholder. Outreach and education is crucial to improve smallholder performance. It can help achieve increased yields and reduce the use of expensive methods of fertilization. It is also vital to help halt the destruction of HCV areas and ensure the avoidance of planting on peatland. Smallholder support Although the ultimate aim is to support smallholders in achieving RSPO certification, some stepping stones need to be put in place. AAK is now investigating an inclusive smallholder scheme which encourages and supports smallholders to make practical, stepwise changes to best practice that will lead towards certification, without challenging them with demanding certifications immediately. Working with partners within and beyond our palm supply chain, AAK plans to initi- Photo: RSPO ate a palm oil smallholder support project in 2016.
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