Commodity supply chain management and climate change: a case study of the palm oil industry

Businesses often face pressures from many stakeholders to mitigate the climate impacts in their palm oil supply chains. To analyze actions taken by companies across the palm oil supply chain to source palm oil sustainably, we examined existing literature, company disclosures, and NGO reports. Based on the disclosures of 275 companies between the years 2015 and 2018, the key practices include the use of external standards, compliance instruments, supply chain tracing, commitment, and collaboration. Companies were more focused on protecting existing forests, ecosystems, workers, and communities than on direct greenhouse gas accounting. We applied k-means clustering to classify companies in terms of their activeness in ensuring sustainability in their palm oil supply chains. On average, processors and traders of palm oil, public, high brand value companies, and companies with more employees were more likely to be highly active or active in managing their palm oil sustainability issues.