WRI: Palm Risk Assessment Methodology

Published: February 23, 2019 by World Resources Institute

In recent years, both companies and countries have committed to sustainable, "deforestation-free" production of agricultural raw materials, including palm oil, beef, soy, and pulp and paper. Traders and buyers of these commodities need to understand how their supply chain contributes to deforestation and how to mitigate associated reputational, operational, and financial risks. Linking supply chains to deforestation requires tracing the supply chain to the point of origin in order to understand where and how products are sourced. Many buyers have invested significantly in traceability over the past few years, especially in the case of palm oil. However, due to the size and complexity of these supply chains, the most successful efforts so far have reached back only to the palm oil mill rather than to the farm. A large palm oil buyer’s supply chain may include hundreds if not thousands of mills spanning multiple countries, which in turn source from thousands of farms. WRI has developed a method for assessing the deforestation risk associated with a specific mill. The PALM Risk Assessment Tool (PALM Tool) can be applied across an entire supply chain to generate a relative risk ranking of all mills. This information can support decision-making by buyers and traders as they prioritize engagements and interventions within their supply chain.

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