Kellogg Company commits to “fully traceable” sourcing of palm oil

Posted by AFN Staff Writers on 19th February 2014
Kellogg has committed to "fully traceable" sourcing of palm oil

Global food manufacturer, the Kellogg Company (Kellogg), has announced a global commitment to work with palm oil suppliers to source “fully traceable palm oil, produced in a manner that’s environmentally responsible, socially beneficial, and economically viable”.

Kellogg said it was working through its supply chain — from suppliers to processors to growers — to ensure that palm oil its uses is sourced from plantations that uphold the Company’s commitment to “protect forests and peat lands, as well as human and community rights”. The Company said that it was  “very small user of palm oil”, but that it had “directly engaged with global palm oil suppliers and stakeholders” since it began “responsibly sourcing” palm oil in 2009. In 2012, Kellogg said it began using mass balance palm oil in Europe, and in 2014, the Company was able to shift its US palm oil use to mass balance supply.

The Company said all of the palm oil it has used since 2011 has been sourced through a combination of Roundtable on Sustainable Palm Oil (RSPO) certified segregated supply, RSPO mass balance mixed-source supply, and the purchase of GreenPalm certificates.

“As a socially responsible company, traceable, transparent sourcing of palm oil is important to us, and we are collaborating with our suppliers to make sure the palm oil we use is not associated with deforestation, climate change or the violation of human rights,” said Diane Holdorf, Kellogg Company Chief Sustainability Officer.

Requirements of palm oil suppliers

To achieve its goals, Kellogg will require all global palm oil suppliers to trace palm oil to plantations that are independently verified as legally compliant; adherent to the Company’s principles for protecting forests, peat lands, and communities; and compliant with all RSPO principles and criteria. Suppliers must comply with the requirement by 31 December 2015, or be working to close any gaps identified in their action plans.

“By partnering closely with our suppliers to meet these expectations, we will work together to address the important topic of deforestation,” Ms Holdorf said. “Every year we make significant progress against this important priority, and as we seek to further advance these goals, we will continue to report annually on our progress,” she said.

In addition, Kellogg said it is:

  • Participating as a member of the RSPO and requiring that 100 per cent of the palm oil it uses comes from suppliers that are also RSPO members operating in compliance with RSPO principles and criteria.

  • Requiring through its Global Supplier Code of Conduct that suppliers commit to “ethical business practices, respecting human rights, and reducing their impact on the environment”.

  • Supporting the Consumer Goods Forum (CGF) pledge to achieve zero net deforestation by 2020.

Support for the move

Kellogg said its commitment was garnering support from external stakeholders such as Green Century Capital Management (Green Century), an investment firm that provides eco-conscientious people opportunities to invest in ways that encourage environmentally responsible corporate behaviour.

Green Century is a long-term Kellogg Company shareholder, and worked closely with Kellogg in updating the commitment.

“Green Century is excited to support Kellogg on this important palm oil journey, which will ensure the Company’s core values are upheld throughout the supply chain and create long-term value for both shareholders and the environment,” said Lucia von Reusner, Shareholder Advocate, Green Century Capital Management. “Kellogg Company’s commitment to directly engage its suppliers positions them as a leader in developing sustainable palm oil,” she said.

Move is a ‘step in the right direction’, says environmental group

The move has been welcomed by environmental activist groups, including the Rainforest Action Network (RAN), which has been among the groups pressuring Kellogg to address the issue. The Kellogg announcement was notable in that it goes beyond the “often-criticised standards” of sustainable palm oil certified by the RSPO, according to RAN.

“Kellogg has taken a step in the right direction, but a statement of intent is not the same as a binding, time-bound responsible palm oil policy,” said Gemma Tillack, RAN Senior Forest Campaigner. “For communities and orangutans in Indonesia, what matters now is that Kellogg puts this commitment into action with thorough and rapid implementation,” she said.

The Kellogg announcement follows the release of strengthened palm oil purchasing policies from other major consumer companies, including Unilever, Nestle and Ferrero, as well as a new ‘No Deforestation, No Peat, No Exploitation’ policy by the world’s largest trader of palm oil, Wilmar International. Wilmar is a supplier and joint venture partner of Kellogg.

Palm oil debate in Australia

In Australia, the political debate about use of palm oil has centred around food labelling. Australian Food News reported in September 2011 that the Australian House of Representatives’ Economic Committee had made a recommendation that a proposed Food Standards Amendment (Truth in Labelling Palm Oil) Bill should not proceed.

Key provisions of the proposed legislation, which was tabled by Independent Senator Nick Xenophon, would have required producers, manufacturers and distributors of food containing palm oil to list palm oil as an ingredient, regardless of the amount of palm oil involved; and for the Australian Consumer Law to be amended so information of the palm oil content, or the use of palm oil in producing a product (not limited to food), would be a relevant consideration for the ACCC to determine whether a person has engaged in misleading conduct.

In November 2011, Australian Food News reported that at World Wildlife Fund (WWF) assessment of palm oil buyers had found that most major Australian food companies had increased their use of sustainable palm oil over the previous year. The WWF found that 66 per cent of the companies had committed to sourcing 100 per cent RSPO-certified palm oil by 2015 or earlier.