Unilever has pledged to use only palm oil certified as sustainable by 2015, while also supporting calls for a moratorium on further deforestation for palm oil in Indonesia.
In ensuring Unilever's supplies come from sustainable sources, the multinational producer of food, beverages, cleaning agents and personal care products hopes to take a leading role in establishing a certified supply chain for palm oil production.
"Suppliers need to move to meet the criteria, by getting certified both the palm oil from their own plantations and the palm oil they buy from elsewhere," said Patrick Cescau, Unilever CEO.
"We also intend to support the call for an immediate moratorium on any further deforestation for palm oil in Indonesia."
The announcement was made yesterday at the Prince of Wales' May Day Climate Change Summit in London.
It follows protests across Europe where Greenpeace activists demonstrated against the destructive effect Unilever's use of palm oil has on the environment, and its damning recent report called "How Unilever palm oil suppliers are burning up Borneo".
Palm oil in the food industry
Palm oil is a form of vegetable oil obtained from the fruit of the oil palm tree. As well as being used an ingredient, companies have also started choosing the oil as a biofuel, considering it a greener alternative to conventional petrol and diesel.
However, environmental campaigners have argued it has the opposite effect, leading to deforestation, which destroys habitats for animals such as the orang-utan as well as increasing carbon emissions.
Every year, 1.8bn tonnes of greenhouse gas (GHG) emissions are released by the degradation and burning of Indonesia's peatlands, said Greenpeace. This is 4 per cent of global GHG emissions, and comes from 0.1 per cent of the land on earth.
In November, Greenpeace produced a report saying major food companies, including Unilever, Nestle and Cargill, were contributing to increased carbon emissions through their use of palm oil, and such production could "trigger a climate bomb".
The report said the palm oil from companies engaged in forest and peatland destruction is then laundered through the entire supply chain, ending up with the well-known companies.
In a recent follow-up report, the environmental charity presented further evidence of the expansion of the palm oil sector in Indonesia into remaining rainforests, orang-utan habitats and peatlands.
Furthermore, it linked the majority of the largest producers in Indonesia to Unilever, which uses 1.3 Mt of palm oil derivative each year, equal to about 3 per cent of global production.
Unilever has now promised to ensure its sources are sustainable, to help protect the environment.
No one was available to comment on whether this move is related to recent Greenpeace actions, but the company did say: "We are committed to doing this because we believe it is the right thing to do for the people who use our products, for the environment and communities in and around which palm oil is grown, and for out business and our brands."
Greenpeace has welcomed Unilever's decision to commit to sustainable palm oil productions, but says that challenges remain.
John Sauven, Greenpeace UK director, said: "Unilever's commitment to sourcing sustainable palm oil will be meaningless unless its suppliers stop trashing Indonesia's rainforests - this is why the moratorium is so important."
Roundtable on Sustainable Palm Oil
Greenpeace added that Unilever must use its position as chair of the Roundtable on Sustainable Palm Oil (RSPO) to encourage other member companies to follow suit.
The RSPO is an international multi-stakeholder organisation set up six years ago to promote the growth and use of sustainable palm oil through cooperation within the supply chain and open dialogue between its stakeholders.
Unilever has said it will "continue to play a leadership role on the RSPO and drive it as a vehicle for change, ensuring that it applies effective sanctions on suppliers who persist in unlawful deforestation practices".