Unilever Turns to Blockchain Tech to Increase Palm Oil Transparency

14 April 2022 by Aysen Naylor
blog author

Tracing a product’s environmental credentials from cradle-to-grave is no mean feat but collaboration and innovation both play key roles in its success. Unilever and SAP have created a partnership to launch a pilot scheme, enabling Unilever’s global palm oil supply chain to have greater traceability via blockchain technology.

SAP (systems, applications and products, with the company and software sharing the same name), is working with the consumer goods giant on GreenToken by SAP solution to ensure all products are as transparent as possible, as an increasing number of consumers want to know where their chosen product has come from and the impact it has made along the way.

Palm oil traceability is problematic due to the fact commodities such as palm oil and other raw materials lack crucial details about their origin. This is because they are often mixed with identical-looking raw materials from verified sustainable and non-verified sources, causing them to fall at the first hurdle of the supply chain, with lost or hidden information.

This is where blockchain technology comes in and automatically keeps track of the raw material from where it started to where it ends up.

Unilever applied GreenToken to source more than 188,000 tons of oil palm fruit in Indonesia which led to Golden Agri-Resources and other suppliers from whom Unilever sources palm oil to create tokens. These tokens mirror the material flow of the product throughout the supply chain and note the unique attributes which are linked to origin.

GreenToken uses a blockchain ledger to track tokens which can provide transparency to any raw material facts when additional information is required such as its origin, whether it is free from child labour and its status in terms of recyclability and sustainability.

Nitin Jain, co-founder and general manager of the GreenToken by SAP solution, SAP, said: “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.

“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.”

Anita Neville, Chief Sustainability and Communications officer, Golden Agri-Resources, said: “Technology has played an important role in our efforts to enhance visibility and transparency in our own palm oil supply chains.

“Our participation in the GreenToken by SAP solution pilot with SAP and Unilever provided useful insights in how to successfully pass information between different actors in the supply chain.”

Dave Ingram, Chief Procurement Officer, Unilever, said: “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.

“We are encouraged by the promising results of our pilot with GreenToken by SAP, the latest building block in our tech-enabled approach to ensure a more traceable and transparent supply chain.”

The GreenToken solution enabled Unilever to track, verify and report the origins and journey that palm oil takes through its lengthy, complex supply chain in almost real time, and such progress will strengthen Unilever’s ongoing efforts to gain full visibility of its supply chain.

Aysen Naylor, Research Consultant in Acre's EU team, said:Understanding the first part of the supply chain is essential when calculating emissions and carbon footprint, especially for consumers wanting to consciously buy ethical products.

“Blockchain technology has grown in popularity and demand as it allows organisations to track their supply chains from the first source with greater ease. The end goal is to have full transparency and traceability of supply chains to aid in tackling sustainability issues from human rights and labour laws to GHG emissions emitted.

“Personally, this is so important to avoid any type of misleading information and educate consumers on where their products originate from.”

Aysen is a Research Consultant based in Acre's Amsterdam office. As a consultant, she helps strengthen our recruitment, business intelligence and candidate engagement services across all industries in our European markets. She has a background in hospitality, with specialities in revenue management, research and guest services. Her studies included a research project to help one of the largest hotel chains improve its sustainability and energy efficiency.