Eric Dynda
St. John's University
Charles Wankel
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L'oreal has a program to purchase one hundred percent of the palm oil the company uses from sustainable sources that are certified by the RSPO, the Roundtable on Sustainable Palm Oil. This is part of a company-wide goal of zero deforestation impact by 2020. They are involved in a initiative called SPOTS: "Sustainable Palm Oil and Traceability with Sabah small producers". This program works with small Malaysian producers of palm oil, including individual farmers, in order to promote sustainability and traceability in palm oil production, and to support the producers' well-being. L'oreal pledged to purchase palm oil production from 500 small-scale holders in Malaysia over five years.
The inspiration for L'oreal's involvement in this initiative stems from the company's commitment to sustainability overall. In my interview with Eileen Greb, Sr. Manager of Logistics Control at L'oreal, she stressed "it's important for corporations to be good citizens; to set a good example." This is especially true of a corporation as large of a player as L'oreal is, as the world's largest cosmetics company. L'oreal is working to "continually improve the way we develop products and operate ecologically, economically, and socially." The commitment to sustainable palm oil sourcing is one way to achieve these goals.
Independent smallholders in Malaysia who produce palm oil face many challenges including the threat of deforestation, lack of fair access to the international market, difficult living conditions, and inefficient forms of agricultural practice. Through the SPOTS initiative, many of these challenges are alleviated. These smallholders account for 40% of the world's palm oil production. L'oreal's commitment to this program helps these smallholders, reduces deforestation, improves the company's supply chain, and promotes sustainability in the palm oil market.
L'oreal gains the benefit of being able to better manage their supply chain thanks to traceability methods. They also are seen as a leader in the field of sustainability and preventing deforestation, a trait which makes the company more attractive to consumers and potential employees. Ms. Greb states "I'm very proud of all our company's social sustainability efforts and it makes me feel good to work for a company that is committed to things like this."
By achieving traceability in their sourcing of palm oil, L'oreal can ensure its goal of zero deforestation is being kept. Ending deforestation is very important because it wastes the resources of the environment and also contributes to climate change. The program also has a very real societal benefit in assisting the smallholders in Malaysia who face many challenges to their success. In the past, many of the smallholders have been tempted to illegally increase the size of their plantations because of their low profits from inefficient agricultural practices and limited access to the market. Through the SPOTS program, they will be given access to big purchasers like L'oreal, allowing them to improve their practices and living conditions in the long-term.
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Eileen Greb, Sr. Manager Logistics Control
