Unilever pilots blockchain for sustainable palm oil sourcing

Unilever has launched a pilot that will use blockchain technology to track the provenance of palm oil used in its products, to ensure it does not come from sources linked to deforestation.

The consumer goods giant is a massive user of palm oil, which has become an important ingredient in many food, personal care and other consumer products but is known to be a big driver for clearing of some of the world's most diverse forests, destroying the habitats of endangered wildlife such as the Orangutan and Sumatran rhino.

The forest loss and accompanied conversion of carbon-rich peat soils meanwhile are also contributing to climate change, and there are also concerns about labour exploitation with some sources of palm oil.

Unilever says it wants to source palm oil from verified, sustainable sources, but that can be a challenge as unscrupulous middlemen can mix sustainable and non-sustainable oil – physically identical and almost impossible to distinguish – after the "first mile" of the supply chain.

The blockchain approach to traceability, implemented with help of SAP, has already been road tested in Indonesia, where Unilever applied SAP's GreenToken blockchain system to 188,000 tonnes of oil palm fruit.

The traceability afforded by the distributed ledger technology "enabled Golden Agri-Resources and other suppliers from whom Unilever sources to create tokens that mirror the material flow of the palm oil throughout the supply chain," said the company.

GreenToken helped Unilever track, verify and report – in near real time – the origins and journey that palm oil takes through its long and complex supply chain.

"With GreenToken, we want to bring the same traceability and supply chain transparency to bulk raw materials that you get from scanning a bar or QR code on any consumer product," said Nitin Jain, co-founder and general manager of GreenToken.

"Our solution allows companies to tell what percentage of palm oil products they purchased from a sustainable origin and track it to the end consumer product."

Unilever says it is committed to achieving a deforestation-free supply chain by 2023 using a "tech-enabled approach."

Indonesia and Malaysia make up over 85% of global supply but there are 42 other countries that also produce palm oil, according to figures from the World Wildlife Federation.

Photo by Nazarizal Mohammad on Unsplash