Traceable palm oil: Unilever and SAP team up for blockchain supply chain tracking

Unilever has pledged to eliminate deforestation from global supply chains by 2023. Stock image of palm oil supply chain work. 

The consumer goods giant first used the solution, called GreenToken by SAP, in Indonesia, last year. This was for a proof of concept project covering 188,000 tonnes of palm oil fruit. During that work, suppliers were able to create digital tokens capturing information on the palm oil’s origin and its journey across the supply chain.

Following the success of that proof of concept work, Unilever will scale the use of GreenToken more widely.

Blockchain is a promising solution for businesses looking to track goods across complex supply chains. It acts as a digital ledger, creating a verifiable and tamper-proof audit trail for any transaction. Information can be tracked regarding topics including human rights, habitat protection and emissions.

For palm oil specifically, SAP has highlighted the fact that raw materials from verified and non-verified sources are often mixed in the supply chain, making it difficult to ascertain origin information.

This poses a challenge for businesses looking to prove they are sourcing in a deforestation-free manner. Palm oil is estimated to have been the cause of more than 5% of the deforestation to have taken place in tropical forests to date. 

SAP claims that, with GreenToken, companies can assess what percentage of palm oil products they purchased is from a sustainable origin and track it to the end consumer product.

“Unilever is committed to achieving a deforestation-free supply chain by 2023 and blockchain technology has the potential to help companies, like ours, track their supply chains to ensure the commodities we source respect people and the planet,” said Unilever’s chief procurement officer Dave Ingram.

Unilever’s 2023 deforestation commitment was announced in 2020, as part of a sweeping update to its sustainability strategy that also included the firm’s 2039 net-zero target. It has since announced a longer-term ambition, for 2030, to become ‘forest-positive’, through a collaborative initiative convened by the Consumer Goods Forum.

Blockchain is something Unilever has been exploring for several years, before the sustainability target updates. In 2018, it began using a blockchain-enabled retail platform to enable customers to offset the carbon footprint of Ben & Jerry’s purchases. Separately, it has collaborated with Sainsbury’s, Barclays, BNP Paribas and Standard Chartered to use blockchain to improve social and environmental practices in tea supply chains.

Sarah George