Palm Oil and the Hospitality

IndustryThe UK Government has set a goal to

source 100% Certified Sustainable Palm Oil by the end of 2015.

This document presents an overview and step-by-step guide to support your

businesses in its journey towards procuring sustainable palm oil.

Who We AreThe British Hospitality Association is the private sector forum for the UK’s 6th largest contributor to export earnings and the 4th largest employer - that’s 3 million people or 10% of the workforce and over 180,000 businesses.

Together we present a clear choice for Government and the hospitality & tourism industry. Either we are content with the ‘steady as she goes’ approach or we jointly pilot a path for a more ambitious strategy. Putting the right policies in place offers us all a considerable prize – growth which delivers 300,000 new jobs by 2020.

The BHA aims to be the single most powerful voice actively championing the interests of the whole industry and its business partnership scheme enables the best suppliers and partners to the industry to participate in developing insight and sharing best practice.

To find out more, follow us on twitter @BHAtweets and www.bha.org.uk

A community of visionary leaderswho play their part in advancing our industry. An organisation for

brands, operators and owners of all hospitality and tourism businesses.

Employing 10%of the UKWorkforce

Hospitality is Britain’s 4th largest industry and delivers £52.7billion (at 2009 prices) annually to the economy in Gross Value Added (wages and

profits).

40,000+ members

The hospitality industry employs 10% of the UK workforce and contributes more than £115

billion to the UK economy per annum.

4th LARGEST INDUSTRY

Contents Who we are 1Palm oil and the hospitality industry: What’s all the fuss about ? 2 What is palm oil? 3What are the issues? 3The production of palm oil 3Why should you source sustainable palm oil? 4What constitues sustainable palm oil? 4How can your business get involved? 4Supporting the Government goal to source sustainable palm oil 5Where to start? 6Assessment 6Progress 7Voluntary agreement or certification 8Communicate your commitment 9Q & A 9 - 10Further information 11

Palm Oil And The Hospitality Industry: What’s All The Fuss About?

In October 2012, the BHA, UK government, World Wildlife Fund and other industry associations in the UK palm oil supply chain agreed an ambitious target of sourcing 100% credibly Certified Sustainable Palm Oil (CSPO) by the end of 2015.

The need for CSPO was recognised by the Prime Minister, who, during a visit to Indonesia in April 2012, announced that the UK government would work with trade associations and companies to set out a roadmap for the UK to achieve 100% use of sustainable palm oil to help tackle global deforestation.

The UK hospitality industry is amongst those who often rely on palm oil for ingredients for cooking and cleaning products. With thegoal set for the end of 2015, the BHA has been working with Government to ensure practical steps are taken to raise awareness of sustainable palm oil and to encourage buisnesses that have not already done so to:a) check with their suppliers whether they are using palm oil or products containing palm oil; andb) work with suppliers to put in place measures to ensure that the palm oil they are using is sustainable.

Changes to the Government Buying Standards (GBS) mean that all food and catering products bought by central government must meet sustainability requirements - including the sourcing of sustainable palm oil and derivatives - by the end of 2015.

Although the BHA supports the use of sustainably sourced palm oil, we are aware that reaching the goal of 100% CSPO in the UK will require a cooperative effort between numerous industries, the businesses that make up those industries, and the support of Government.

All food and catering products bought by central Government must meet newsustainability requirements by the end of 2015.

Amendments to the Government Buying Standard for food and catering include a new requirement about sourcing sustainable palm oil, palm kernel oil and derivatives.

What is Palm Oil?Palm oil is the most widely used vegetable oil in the world. As well as having useful cooking properties, palm oil is an incredibly high-yielding vegetable oil. Often found in products such as biscuits, ice cream, margarine, as well as cleaning products and further down the supply chain in animal feed, the global demand for palm oil is increasing.

What are the Issues?

The world’s population is expected to grow to between 9 and 10 billion people by 2050. Based on data from 2009, it is estimated that this could result in a 70% increase in the demand for food (United Nations Food and Agriculture Organisation, 2012).

An increased demand for food coupled with decreasing land availability and a shortage of water means that crop yields must increase in order to minimise further land use and environmental damage. Palm oil is the highest yielding oilseed crop in the world and can therefore help to meet increasing food demands while minimising land usage. However, responsible land management and production is needed to ensure that this commodity does not result in significant deforestation and effects such as biodiversity loss and climate change.

Production of Palm OilPalm oil is pressed from the flesh of the fruits of the oil palm tree and palm kernel oil is produced from the kernel of the fruit. Oil palm trees are highly productive, capable of producing 4-10 times more oil than other crops per unit of cultivated land.

Indonesia and Malaysia produce nearly 90% of the world’s palm oil and are home to large scale plantations. Of this, around 20% of palm oil is produced by smallholders who rely on palm cultivation as their sole source of income.

In some areas, oil palm cultivation has caused - and continues to cause - deforestation. Land covered by tropical forest is still being cleared and converted into palm oil plantations. These tropical forests act as vital carbon stores and provide a home for indigenous people and a huge number of plants and animals, including critically endangered species such as the orang-utan and Sumatran tiger.

Palm oil is the highest yielding

oil seed crop in the world and can

therefore help to meet increasing food

demands while minimising land

usage.

As responsible business leaders, the BHA support an approach to palm oil farming and harvesting that avoids un-necessary deforestation, biodiversity and habitat loss, and displacement of indigenous people.

Amendments to the Government Buying Standard (GBS) require that all food and catering products bought by central Government meet sustainability requirements by the end of 2015. This includes a requirement to source

What constitutes sustainable palm oil? No one definition of sustainable palm oil exists and different schemes have been developed to outline therequirements of sustainable palm oil.

As a critical first step, a single, understandable, and reasonable definition of sustainable palm oil must be articulated. We urge the Government to provide a commercially reliable reference document to achieve this goal.

The BHA is working with Defra who support work being undertaken by the Roundtable for Sustainable Palm Oil (RSPO).

The RSPO supports different types of CPSO to meet different business requirements. Please see ‘Voluntary Agreement or Certification’ on Page 8 for more information.

How can your business get involved?This overview, produced by the BHA for the hospitality industry, supports businesses to consider their procurment options and needs to transition towards sourcing sustainable palm oil.

Please read on for a step-by-step approach to sustainable palm oil procurement.

Recap...• The hospitality industry often uses products containing

palm oil.

• The Government has signed up to achieve 100% CSPO by the end of 2015. There is a requirement for the use of sustainably produced palm oil in food in central government contracts.

• Businesses are under pressure to source palm oil as in some tropical regions it has, and continues to cause widespread deforestation.

• Palm oil is the highest yielding crop in the world and if sustainably sourced can help meet increasing oil demands.

• Become a BHA supporter by clicking here. Or visit:

http://bit.ly/1IqXNDC

The BHA is working with Defra who supports work being undertaken by the

Roundtable for Sustainable Palm Oil (RSPO)

sustainable palm oil.

For more information on GBS, please refer to theGovernment Buying Standards Information Note on the BHA website.

Why should you source sustainable palm oil?

The BHA is working with members to encourage them to look into the feasibility of using sustainable palm oil in their supply chain.

Our initial canvas of the industry shows that most businesses are interested or already taking steps to transition toward sustainable palm oil products. This overview outlines our suggestions on how businesses can take the next step to support the Governments goal to source 100% certified sustainable palm oil.

If you are already addressing palm oil in your supply chain, aim to do something to support the Government goal, or just want to recieve further information on sourcing sustainable palm oil, please register here.

For more information please email Lucy Aldrich-Smith at lucy@bha.org.uk

The hospitality industry is voluntarily

and proactively supports the

procurment of sustainable palm.

Supporting the Governments Goal to Source Sustainable Palm Oil

Consumers are increasingly becoming aware of the issues surrounding palm oil; they want to know what ingredients are in the food they eat and where they come from. Businesses taking notice now are likely to be in a more competitive position in the future. - Lucy Aldrich-Smith, Policy Manager, British Hospitality Association

Sustainable Palm Oil is now the required choice at Bartlett Mitchell; procurement decisions are based on an ethical approach but must also make good business sense. The UK government’s commitment to sourcing sustainable palm oil means the cogs of industry are working with caterers to support the ethical decisions they want to make but which have been a struggle to deliver in previous years. As availability and a transparent provenance of palm oil has become stronger, Bartlett Mitchell has made the decision to support the purchase of palm oil only from sustain-able sources.- Sally Grimes, Quality Standards Auditor, Bartlett Mitchell

Sustainable palm oil: Where to start?This overview, written by the hospitality industry for the hospitality industry, sets out a step-by-step journey to sourcing sustainable palm oil.

Step 1. The Assessment

Purpose: A review of your business is critical to assess the financial and environmental impact if your business transitions to sustainable palm oil products.

Objectives: Identify common products you use that contain palm oil. Prepare a map of your palm oil supply chain and identify which parts you can influence. Improve awareness of palm oil use among key decision makers. Research business risks and opportunities.

Actions: Identify the products you source that contains palm oil. Biscuits and confectionary, frying fats, dairy products and cleaning and household products are some of the most common products containing palm oil in the kitchen.

Contact and engage relevant suppliers to question the ability, cost and feasibility to transition to sustainable palm oil. We suggest providing a questionnaire to suppliers to collect information on ingredients, amounts and sources of palm oil used in products. If you procure from many suppliers, a first step is to engage those who provide high palm oil content ingredients, or focus on your top three. An alternative is to check whether suppliers are certified on the RSPO or GreenPalm website. You can search your supplier on these websites: http://www.rspo.org/certification/supply-chain-certificate-holders http://www.rspo.org/trademark/trademark-products-gallery http://greenpalm.org/the-market/registered-certificate-owners

Engage with your staff to improve awareness of key environmental, social and economic impacts surrounding palm oil. Through staff training, be it an allocated session or through discussions at team meetings, let your team know how they can support the sustainable palm oil goal. For example by identifying palm oil products, and whether they are indicated as sustainably sourced or not, when using them in recipes.

Questions to consider during the Assessment Step: Which products do you frequently use which contain palm oil? Is palm oil a critical ingredient in any of the products that you source? Who supplies these ingredients and how far through the supply chain can you trace these products? Can your suppliers provide accurate information on palm oil sourcing? Which palm oil ingredients can be substituted for sustainable and which do not offer a sustainable palm oil choice?

Step 2. Progress

Purpose:

Transition to sustainable palm oil, product by product, to ensure any increased product costs are integrated over time.

Objective: Transition to sustainably sourced palm oil where financially and functionally possible. Notify suppliers of your interest in sustainably sourced palm oil products. Communicate to customers through menus and online information of your support of sustainably sourced palm oil.

Actions: The questions below will aid you in asking the right questions, within your business and from your suppliers.

Information Survey

Realistically, could your business reach the goal of 100% sustainable palm oil by the end of 2015?

If not, how far along do you expect your business to be on this goal by the target date (yearend 2015)? What is the potential reputational risk to your business continuity, integrity and market presence of not using sustainable palm oil?

Are your suppliers offering sustainable palm oil products, and are you using them? Any emblems or uniform information which indicates SPO is available for sale from suppliers? What is the reasonable ability to change products or are you obligated to purchase certain brands/types by contract? For some, it may not be possible to achieve this goal in the short term due to contracting with suppliers and logistics providers. A possible alternative could also be to use GreenPalm credits. When RSPO growers cannot sell their produce on the premium market, they can issue virtual credits instead. Businesses can then buy these credits as a means of offsetting their purchase of non-sustainable palm oil Is there a need for subsidies to ease a price increase in switching from standard palm oil to sustainable palm oil? o What are the expected business costs? o This may first require scoping of how much palm oil is in common use. Do you check for sustainable products in general? Do you see a customer interest in sustainable products? Do you want to be able to make sustainability claims on the products you supply to customers?

Step 3. Voluntary Agreement (suggested by Defra) or Certification

Where to start?

Sign up here and become a BHA Sustainable Palm Oil Supporter. We’ll keep you up to date on the latest news and updates on sustainable palm oil. Decide whether you want to become certified. Certification is not always practical for smaller businesses as it can be time consuming and involve some technical paper work. An alternative option is to become a member of a reputable organisation like RSPO. This would help you to become publically visible and show your commitment to sustainable palm oil. Map out who will manage the sourcing commitment within your business. Senior buy in is essential. Understand different types of certified palm oil available (see below). Commit to buying sustainable palm oil if feasible. If you are having trouble sourcing sustainable palm oil, consider switching to other oils for example British rapeseed oil.

Questions to consider

Look into different types of Certified Sustainable Palm Oil (CSPO). There are 4 supply chain models for RSPO CSPO.

Identity preserved - CSPO is segregated and a batch of certified palm oil can be traced from farm to factory to retailer.

Segregated - CSPO is kept segregated from non-certified palm oil, but is blended with other batches of CSPO and cannot be traced back to a specific plantation.

Mass balance - CSPO is mixed with conventional palm oil, but quantities are monitored administratively so that claimed volumes are matched.

Book and claim (GreenPalm) - CSPO is not kept apart. Instead producers using sustainable business practices who are unable to access segregated or mass balance CSPO supply chains (e.g. because they only produce small volumes of CSPO) earn certificates, which they then sell to users (retailers, manufacturers) so that claimed volumes are matched.

What are the difficulties you may encounter by sourcing certified versions of any ingredients in products? Do you need to be a member of RSPO? What are the resources required to manage and deliver your commitment? What are the business concerns with implementing full use of CSPO? What are your realistic steps and targets? What are the consumer expectations? Do you want to commit to only own brand? Or branded products too?

Key Deliverables A time-bound commitment to source sustainable palm oil, signed off by senior management. This should contain a clearly laid out strategy on how your business is going to meet these goals.

Step 4. Communicate your commitment

It might be useful for you to develop a company policy or statement on palm oil to aid the communication with customers and suppliers. Write on menus and online, stating your commitment to source sustainable palm oil. If you decide to become a member of a reputable organisation, such as RSPO, you can use their logo on your products to communicate your commitment to sourcing certified sustainable palm oil.

What can be done if suppliers are unable to come up with all the information needed on palm oil?This issue is really about risk and financial management, as well as how important palm oil is as an issue to the supplier/manufacturer.

The restaurant or caterer can either try to work with the supplier, and help the supplier to come up with the information or product needed, or if this is not possible, they can switch suppliers to one who can provide the information or product needed.

However, often contractual obligations and the limited number of suppliers of basic goods in bulk in the UK offers limited opportunity to break a contract and go with a new supplier simply for sustainable palm oil products. Additionally, the size of a business factors in heavily to the supplier’s response to their request or threat of/actual termination of the relationship. Large brands may have financial market power, but they are a very small portion of the supplier’s business. Global food retailers have a significantly greater pull with suppliers to make demands that certain goods conform to environmental or social standards. In order to succeed, the sustainable palm oil goal needs to be a coalition effort between industries.

The risk of switching suppliers comes down to the companies’ interest in the cause and the ability to purchase sustainable palm oil without having significant implications on profit and loss. It depends what the company’s policy is; are they committed to sourcing 100% CSPO by a certain date, or are they working towards that commitment?

Questions & Answers

If businesses in hospitality cannot find alternative replacements, what are the expectations?

The industry does not directly control availability and in many cases has limited purchase power and therefore the Government will need to play their part by ensuring industry has the ability to have a choice. The BHA supports the Governments goal, but sourcing the product is well beyond the remit of the hospitality industry on its own. Alternative replacements are available, for example British rapeseed oil.

Where will businesses sit if palm oil is not a direct ingredient, but may be involved in the production process; i.e. added to animal feed?Defra are in discussion with the animal feed industry on palm oil, and the Agricultural Industries Confederation has joined the UK Government’s 2015 Commitment. While the animal feed industry makes progress in sourcing sustainable palm oil, Defra would like support from businesses to create demand for change by asking questions about palm oil procurement further down the supply chain.

What is the Government doing?The UK government has made the goal to source 100% sustainable palm oil and palm kernel oil by the end of 2015. This commitment extends outside of the hospitality industry to oil processors and distributors, manufacturers, retailers, renewable energy sector, cleaning products industry, and speciality chemicals sector. Working with the Central Point of Expertise on Timber (CPET), Defra provides support, newsletters, and other forms of communication and advice for public procurers and businesses on sourcing sustainable palm oil.

With GBS for food and catering set as mandatory for central Government Departments and their agencies, in 2014, a “balanced scorecard” supporting the application of the GBS, and rewarding suppliers for operating to higher standards was put in place.

Internationally, Defra are working with governments, the private sector, scientists and civil society in a range of countries to incentivise sustainable palm oil production and to combat deforestation.

Since 2013, the Foreign and Commonwealth Office’s South East Asia Prosperity Fund Programme has supported projects which aim to reduce greenhouse gas emissions, particularly those linked to palm oil plantations and to create knowledge exchange between policy advisors, local and international NGOs, businesses and scientists.

The Department for International Development has also recently invested in a new programme which has the potential to improve the productivity of existing smallholder palm oil plantations and apply high environmental and social standards.

Additional Information Find more information here: http://www.sustainablepalmoil.org/who-we-are/ http://wwf.panda.org/what_we_do/footprint/agriculture/palm_oil/ https://www.gov.uk/government/groups/central-point-of-expertise-on-timber https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/256254/pb13833-palm-oil-state ment-1012.pdf For further information about how to start your palm oil journey, please contact Lucy Aldrich-Smith, Policy Manager, at:

British Hospitality AssociationAugustine House7th Floor, 6a Austin FriarsLondon EC2N 2HA

Tel: 020 7404 7744lucy@bha.org.ukwww.bha.org.uk