Advancing Supply Chain Sustainability: Lessons from Action for Sustainable Derivatives
As collaboration becomes essential for businesses tackling complex supply chain issues, what lessons can be drawn from the work BSR’s Collaborative Initiative Action for Sustainable Derivatives (ASD) has done in the palm sector?
Foto: Photo by slpu9945 on iStock
From uncertainty around evolving regulations to market pressures, businesses across sectors face systemic challenges to advance supply chain sustainability and address risks in their operations. Often complex and interconnected, these issues require diverse expertise, resources, and perspectives to resolve holistically, which can be difficult for a company to access on its own. Through collaborative initiatives, businesses can pool resources and share risks to ultimately co-create more innovative, scalable solutions to such challenges, influencing broader sector change and social impact.
In the palm sector, for instance, companies working with palm oil derivatives face environmental and social challenges in sourcing and production. These include additional processing of palm oil and palm kernel oil (adding complexity and limiting transparency in supply chains) to having limited leverage on downstream partners in cascading sustainability efforts due to smaller sourcing volumes than other industries. Consequently, to ensure deforestation-free and responsibly sourced supply chains, corporate users of palm derivatives are seeking collaborative solutions.
In 2019, Action for Sustainable Derivatives (ASD), co-managed and co-facilitated by BSR and Transitions, was established to address these shared challenges and work collectively toward a palm derivatives supply chain that upholds No Deforestation, No Peat, No Exploitation (NDPE) principles, respects human rights, and supports local livelihoods. After five years of collaboration, ASD has grown to include 36 members in the cosmetics, home and personal care, and oleochemicals industries, whose supply chains collectively represent 1.5 percent of global palm production. Below, the ASD team shares elements central to the collaboration’s success and how other business collaborations can build trust, consensus, and ambition for transformative supply chain sustainability.
Establish a Common Foundation as a Lever for Action
When companies collaborate to address systemic challenges, a common foundation—such as a shared supply chain mapping—can help establish a strong, trust-based partnership, ensuring that all participants are motivated, accountable, and aligned in pursuit of meaningful, ambitious outcomes. While this common foundation initially sets the direction of project work, a collaboration can build upon it to create pathways for more system-wide sustainability leadership. At the onset, it is important to identify what activities will be central to members’ immediate shared priorities to scale ambition beyond individual needs toward greater systems change.
For ASD, this foundation is a common understanding of members’ collective supply chains. When members better understand their sourcing regions and risks, they can dedicate more efforts to addressing the root causes of potential environmental and human rights challenges. In 2024, ASD reached 61.2 percent supply chain traceability at the plantation level within its collective sourcing volumes—a 13.7 percent year-over-year increase, and far exceeding the industry average of 25 percent. As ASD increases its visibility into members’ supply chains, it can identify salient risks and target its actions to address the most relevant and urgent concerns.
Identify and Proactively Address Collective Immediate Challenges
Understanding shared challenges and aligning on some first initial activities builds trust within a group, which is vital for further progress on more ambitious future efforts. To accelerate progress on collective initiatives, it can be helpful to identify and prioritize salient and urgent common issues. As a collaboration continues to build trust over the years, corporate members may be more likely to maintain momentum when they see the support that collaboration brings to their immediate concerns.
ASD’s foundation of supply chain mapping feeds into and enables activities across its other workstreams. For instance, to address immediate environmental and human rights risks central to members’ sustainable supply chain goals, ASD has established a centralized grievance management system to help members address these concerns. A dedicated ASD team monitors grievances, and ASD’s tailored tools empower members to resolve them effectively to ensure supplier accountability, minimize redundancies of individual approaches, and make space for ASD and its members to better focus on tackling root causes.
Another critical component of responding to immediate member needs is support in navigating and preparing for emerging regulatory landscapes. ASD has equipped members with transparency, due diligence, and risk mitigation tools to support their internal processes for compliance with regulations like the EU Deforestation Regulation (EUDR), enabling ASD to focus on deeper sector engagement; e.g., with smallholder farmers particularly impacted by regulatory shifts.
Raise Ambition for Long-Term Market Transformation
Collaborative market engagement and consistent, growing ambition are key levers to securing enduring systems change. In collaborations, setting a common foundation and working through prioritized shared challenges are important steps to tackling root causes of supply chain risks. As members refine their processes for immediate risks, greater resources can be dedicated to systemic transformation.
ASD goes beyond compliance to drive real-world progress at the heart of members’ supply chains. By pooling resources, ASD members support initiatives like ASD Respect in Palm and the Kaleka Mosaik Initiative, which aims to improve social outcomes and restore local ecosystems for both plantation workers and smallholder communities in Central Kalimantan, Indonesia. Through the ASD Impact Fund collective funding model, all members—regardless of their available resources—are empowered to make meaningful change in key supply chain landscapes and transform the palm derivatives market on the ground.
How Collaboration Makes the Difference
ASD’s success is a testament to the power of collaboration. By pooling financial and human resources and aligning individual corporate responsibility efforts, members have achieved more collectively than they could individually. Not only does this approach make supply chain engagement more efficient, it also creates a unified voice for the derivatives sector within the broader sustainable commodities ecosystem.
As the palm derivatives industry faces ever-evolving challenges, including emerging regulations, declining sourcing ecosystems, and ongoing human rights violations, ASD’s work underscores the importance of collaboration to address systemic issues. We invite new members and stakeholders to co-build solutions for a sustainable future.
Join the Movement
Explore ASD’s work further in its 2025 Annual Update on Progress. To learn more about joining ASD or collaborating on projects, contact the ASD Secretariat at ASD@bsr.org.
This article was originally published at the BSR website "Sustainability Insights" and is written by Ricki Berkenfeld, Associate Director, Consumer Sector and Transformation, and Alexandra Kolev, Associate, Collaboration, at BSR.
