For many ethical consumers, palm oil is a dirty word. Its association with deforestation, the destruction of local communities and forced labour – particularly in Indonesia and Malaysia – makes buying a jar of peanut butter no easy task. Some choose to look for assurances on the label that the palm oil inside has been ethically sourced, while others simply try to avoid buying products made using the commodity.

Palm oil is in more than half of all packaged goods, including makeup, cleaning products and numerous household-favourite foods. And its derivatives are often hidden on product labels under obscure names, such as “ethyl palmitate”. But even if you buy palm oil certified as sustainable, there are criticisms that the current industry standards still allow for rainforest destruction and poor practices.

With public confidence in palm oil fractured, should brands that make a point of sourcing sustainable palm oil even risk trying to engage with their customers on the controversial topic?

This was discussed at a seminar hosted by the Guardian and supported by the Roundtable on Sustainable Palm Oil (RSPO), a sustainability body for the palm oil industry. Both the smaller and multinational businesses represented on the panel, which was chaired by the Guardian’s Laura Paddison, agreed that while public engagement is still important, the responsibility for sourcing sustainable palm oil should fall on businesses, not consumers.

Take the burden off shoppers

Hilary Jones, ethical director at cosmetics company Lush, told the audience of experts at the event: “It’s up to us to make those decisions at company level so that the customer isn’t faced with: ‘Is this the good one or the bad one?’”

Fiona Wheatley, sustainable development manager for Marks & Spencer – which was recently heralded by WWF as one of the British companies “leading the way” on sourcing sustainable palm oil – was also in favour of taking the burden off shoppers.

“We don’t believe there should be a choice between sustainable and non-sustainable palm oil. Sustainability should be viewed in exactly the same way as food safety: a non-negotiable that is embedded into every strand of how we do business.” It’s not just “a lovely little story” to tell customers, she said.

The real purchase power lies further up the chain, said Jones, who pointed out that companies are “far bigger consumers than the person trying to choose a jar of peanut butter”.

If leading companies are now committed to sustainable palm oil, are they doing enough to win the public’s trust on its provenance?

“It’s going to take a significant amount of time to transform an entire sector,” said Jonathan Horrell, director of sustainability at Mondelēz International.

“One of the things that will drive that shift is transparency and much greater levels of traceability right back to the mill,” he said. Despite this, Mondelēz doesn’t share details of its palm oil suppliers, which Horrell said is commercially guarded data.

Slow progress

When it comes to the numerous social issues around palm oil, such as land tenure, political corruption, forced labour and other human rights abuses, Horrell admitted that progress has been slow. “We have seen progress, but it isn’t happening fast enough and I think everyone feels frustrated.”

For Farwiza Farhan, chair of Yayasan HAkA – an Indonesian NGO working to protect Sumatra’s Leuser Ecosystem – time is not something the orangutans, rhinos, tigers and elephants that live there have.

“I see the destruction first-hand that comes from the drive for palm oil plantations; we are losing species so fast,” she said, describing how elephants are poisoned every week and palm growers treat many animals like pests as they illegally clear forests to free up land.

Yet palm oil has brought huge wealth to the region. The industry accounted for $12.3bn (£9.7bn) in exports for Indonesia in 2015, with the average income of palm plantations 10 times higher than that of rice plantations, according to the Zoological Society of London. But for Farhan, the comparative costs to the environment and local communities are not worth it.

“The smallest smallholders, who grow two hectares, don’t usually have their lives super transformed. They need to wait about three to five years for the palm to produce anything like $100 per hectare,” she said. “Companies aren’t paying for the subsequent floods and destruction caused by the deforestation for plantations – that falls to the local communities and the government.”

Jones described destructive scenes on company visits to Indonesian palm oil suppliers. As a consequence, Lush has withdrawn palm oil from its products and invested in biodiversity projects in the region instead. “Our buyers said they didn’t see a single animal or a single human being while driving through a plantation for 10 hours – that can’t be right,” said Jones, citing “shoddy farming on a scale you wouldn’t believe” by the growers, including leaving slashed bags of fertiliser beneath every other palm tree.

“If you don’t feel good about your products, you can’t encourage people to buy more of them,” she said. “I can’t see us returning to palm now we’ve formulated it out. For us it’s about biodiversity; monoculture crops and overconsumption are both problems when we all focus on one ingredient.”

A global tipping point?

But for the bigger companies, such as Marks & Spencer, a boycott is neither possible nor desirable. “We actually get up to 10 times as much palm oil from the same space of land as we would from alternative vegetable oils,” said Wheatley. She suggested the focus should be on getting more from current plantations and reducing their impact on the environment and communities.

The RSPO – with its more than 3,000 members – needs the confidence of its members and their consumers. But there have been examples of RSPO members failing to meet standards.

The IOI Group, for example, had its certification withdrawn last year for failing to protect peat areas and forests. It was reinstated just six months later. The RSPO said it was satisfied that IOI Group was now compliant with its sustainability standards and had set about compensating parties affected by its past actions.

But Marcus Colchester, from the charity Forest Peoples Programme, asked the panel whether brands that still buy from major palm oil producers which have had environmental damage complaints brought against them are complicit in their activities.

“You can’t just go around and exclude everybody, otherwise you end up losing all of your influence,” said Horrell. “It’s an incredibly difficult judgment.” He pointed to a review of RSPO standards as a chance to push the organisation to speed up its complaint procedures and ensure proper consequences for members who fall short.

“Palm oil is not universally bad,” he insisted, but said it was a challenge to measure and show the progress that is actually being made. Despite the ongoing issues, Wheatley predicted there would eventually be a global “tipping point” on sustainable palm oil, but it would ultimately depend on China and India getting on board.

Farhan said perceptions are shifting in Indonesia. “There is an emerging understanding from people – we used to see forest destruction as normal, but no longer. When it comes to better management of our forests and land, our economy can’t afford not to do it.”