Individual Research Report on Sustainability BUS2SBY SP2

This report investigates the sustainability challenges associated with palm oil production, focusing on deforestation in tropical rainforests and its environmental consequences. It examines the role of palm oil in the toiletries, fast-moving consumer goods, and cosmetic industries, highlighting the destructive production processes in Indonesia and Malaysia. The report delves into the adverse effects of deforestation, biodiversity loss, pollution, soil erosion, and climate change. It analyzes the goals of campaigns like Greenpeace, using a power map to illustrate stakeholder relationships. The report also offers strategic recommendations, including market segmentation, for companies like ALDI to address these sustainability issues. The report includes references to various academic sources and organizational reports to support its findings and conclusions.

Running Head: SUSTAINABILITY
SUSTAINABILITY
Name of the Student
Name of the University
Author Note

1TITLE: SUSTAINABILITY
Table of Contents
Executive Summary...............................................................................................................1

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Introduction................................................................................................................................3
Strategy..................................................................................................................................3
Applied Marketing Theories: Strategic Approach.................................................................5
Market Segmentation.............................................................................................................5
Recommendations for ALDI..................................................................................................8
Conclusion..................................................................................................................................9
References............................................................................................................................10

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Background of the Topic
Palm Oil is one of the most essential component in the toiletries, fast moving
consumer goods and cosmetic industry. Today most of the associated products contains palm
oil as the base ingredient (Afriyanti, Kroeze & Saad, 2016). This is because palm oil has very
few side effects and as the oil is extracted through mass production, almost every brand in the
shelf of the supermarket contains palm oil. But the production process involved it very
destructive in nature. The main palm oil producing and exporting country is Indonesia and
Malaysia. More than Eighty Five Percent of the total palm oil produced in the world comes
from Malaysia and Indonesia. But the problem is the areas where the plantation exists is
located in the tropical areas which contains rich levels of biodiversity (Greenpeace Southeast
Asia. ,2019). These are mainly tropical rainforest which is a major source of global oxygen.
Tropical rainforest is an essential part of the global ecosystem as it minimises the level of
carbon dioxide in the air. It provides an ecosystem which helps in cycling the nutrients,
infusion and purification of fresh water, formation of soil and stabilising the environmental
factors. But the problem the tropical rainforests are continuously being replaced by the palm
trees (Katz-Kimchi & Manosevitch, 2015). The ancient rainforest which supports the
ecosystem to a great extent cannot be just replaced by the palm trees which lacks the
capability to support the ecosystem to that extent.
The problems associated are as follows:
a) Deforestation
i) Cutting down the trees and reducing tropical forests to create space for palm
oil plantation is trading of with the conventional ways of biodiversity and
putting the environment under massive risks. The rainforests are continuously

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being replaced by infrastructures such as agricultural strands, production mills,
roads and residences of the workers.
ii) Within a span of fifteen years between 1990 and 2005, the oil industry in
Indonesia has expanded by sixty per cent. The adverse effects of the process is
that it has cleared down a major portion of the virgin forests (Greenpeace
Southeast Asia. ,2019). The estimated area to be cleared in more than fifty
lakh football pitches.
b) Loss of Biodiversity
i) The process meanwhile has created major loss in the number of natural habitat
of plants and animals which were only found in the specified areas. Some of
the extinct animals include Sumatran Rhino and Bornean Orangutan
(SPOTT.org. ,2019).
ii) As a result of increased plantation, the core areas of the forest are being
revealed and an expository window for the poachers to hunt down exotic
animals.
c) Pollution
i) Extensive use of fertilizers and pesticides have deteriorated the quality of the
soil and polluting the ground water.
ii) The effluents released from the mills and refineries in the area are entering the
fresh waters and affecting the quality and aquatic life (Pearse, 2016).
d) Soil Erosion
i) This has mainly occurred due to clearing of the steep floors of the forest as
palm trees can also be cultivated on the sloping areas.

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ii) As the plantation of palm trees requires high levels of irrigation, the flow of
water through the cultivating areas is fastening the process of soil erosion.
e) Climate Change
i) The effluents as earlier mentioned are released into the water bodies which
due to some chemical reaction releases methane, carbon dioxide and hydrogen
sulphide as a result of greenhouse effect.
ii) As a result of clearing the areas, frequent forest fires occur frequently and
creates more problem and reduces forests to a greater extent.
Goals and Objectives of the Campaign
The main aim of the campaign is to stop the process of deforestation of the tropical
rainforest and their conversion into industrial plantation of palm oil. On the other hand, the
current focus of the campaign is against the data secrecy of the government under which the
government is maintaining a level of plantation but is reveling to the world only a part of it.
On the other hand, the government is also planning to clear out more than fifty hectares of
tropical rainforest which is equivalent to the size of a small country such as Spain (Beck,
2014). Companies such as Nestle and Mondalez also came into the limelight as they are
prime importers of Palm Oil from the concerned area. The other side of the problem is very
critical as the process is employing a large proportion of the population in the agricultural
sector and the hugely contributing to the Gross Domestic Product.
Power Map
The power map is a diagrammatic representation of the elements associated with the topic of
discussion. The element in the center is the initiator and the associated elements in the
relation. The power map for the Greenpeace movement is as follows:

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Figure 1.1: Power Map of Greenpeace Movement
Explanation: From the above diagram we can infer that the Greenpeace Movement is the
focal point of the topic under discussion (Rootes & Nulman, 2014). The main elements that
are directly associated with the Greenpeace Movement are the tourism sector, government,
the industry and the local people.
Industry being the most affected sector, the Movement has restricted the rate of
increase of palm tree cultivation in the concerned area. Agriculture being the most important

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sector is affected followed by the Fast Moving Consumer Good sector which uses palm oil as
an important ingredient. In addition, the cosmetics sector also uses palm oil as a base as it is
economical and has reduced side effects.
The government being an important stakeholder is facing massive pressure from
various environmental organizations which is affecting the employment because the side
effect of the movement has resulted in reduction in the rate of plantation further reducing
employment. The reduction in employment shall effect the gross domestic product of the
nation. Lastly, the tourism sector is affected and may influence the hotel sector.

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References
Afriyanti, D., Kroeze, C., & Saad, A. (2016). Indonesia palm oil production without
deforestation and peat conversion by 2050. Science of the Total Environment, 557, 562-570
Beck, P. J. (2014). The International Politics of Antarctica (Routledge Revivals). Routledge.
Greenpeace Southeast Asia. (2019). 50 million hectares of forests destroyed worldwide, as
palm oil sector in Indonesia continues unreformed - Greenpeace Southeast Asia. Retrieved 29
September 2019, from https://www.greenpeace.org/southeastasia/press/2484/50-million-
hectares-of-forests-destroyed-worldwide-as-palm-oil-sector-in-indonesia-continues-
unreformed/
Katz-Kimchi, M., & Manosevitch, I. (2015). Mobilizing Facebook users against Facebook's
energy policy: The case of Greenpeace unfriend coal campaign. Environmental
Communication, 9(2), 248-267.
Pearse, R. (2016). Moving targets: Carbon pricing, energy markets, and social movements in
Australia. Environmental politics, 25(6), 1079-1101.
Rootes, C., & Nulman, E. (2014). The impacts of environmental movements.
SPOTT.org. (2019). Environmental impacts | SPOTT.org. Retrieved 29 September 2019,
from https://www.spott.org/palm-oil-resource-archive/impacts/environmental/