In a move that has pleased many, Dunkin’ Donuts has agreed to source its palm oil from sustainable sources. The Group will be setting a target date in its next CSI report for sourcing 100% sustainable palm oil or purchasing offset certificates to cover its sourced palm oil.
Dunkin’ Donuts is yet another in a growing number of brands making a pledge to move to sustainable palm oil.
Positive shareholder pressure
For the Dunkin’ brand, this takes significant pressure, placed on them by major shareholder DiNapoli, off of them. DiNapoli is the trustee of New York’s pension fund and owns about $1,9m in Dunkin’ Brands stock. As a result, DiNapoli is withdrawing a shareholder resolution that asked the company to address social and environmental concerns associated with palm oil production.
What’s the big deal with palm oil?
Palm oil is a common cooking ingredient in the commercial food industry, and favoured for its lower price and high oxidative stability when used for frying.
As of 2009, Indonesia was the largest producer of palm oil, and production increased 400% between 1994 and 2004. And as of 2012, the annual revenue received by Indonesia and Malaysia (the second largest producer) together, is $40 billion.
As a consequence of this massive increase, extensive deforestation has occurred further endangering rare wildlife like the threatened orangutan and Sumatran tiger, and greenhouse gas emissions have increased through the destruction of peat bogs for palm oil cultivation.
Violation of indigenous people’s rights has also been a source of conflict. While the industry provides employment opportunities, improves infrastructure, social services and reduces poverty for surrounding communities, some palm plantations have been established without consultation or compensation of the indigenous people occupying the land. The use of illegal immigrants to work the plantations has also raised concerns with human rights watchers.