Unilever tests blockchain technology in tracing palm oil origins to individual suppliers

The pilot, operated by Unilever and Green Token by SAP, helped to ensure that only sustainable sources for palm oil were used

Photo courtesy Unilever

Raw materials like palm oil are often mixed with physically identical raw materials from verified sustainable and nonverified sources after the “first mile” of the supply chain, causing the origin information to be either hidden or lost.

In a successful proof of concept in Indonesia, Unilever applied GreenToken, a blockchain technology, to source more than 188,000 tons of palm oil fruit. The solution enabled Golden Agri-Resources and other suppliers from whom Unilever sources to create tokens that mirror the material flow of the palm oil throughout the supply chain and capture the unique attributes linked to the oil’s origin.

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

“Technology has played an important role in our efforts to enhance visibility and transparency in our own palm oil supply chains,” says Anita Neville, chief sustainability and communications officer, Golden Agri-Resources. “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.”

The GreenToken solution helped Unilever track, verify and report in near real time the origins and journey that palm oil takes through its long and complex supply chain.

“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 Days Ingram, chief procurement officer, Unilever. “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 work with GreenToken enhances Unilever’s ongoing and industry-leading efforts to gain full visibility of its supply chain.