Nestlé in society Creating Shared Value and meeting our commitments 2015

Nestlé in society:
Creating Shared Value
Nutrition, health
and wellness
Rural development
Water
Environmental
sustainability
Human rights
and compliance
Our
people
G4-EC7, Procurement practices G4-DMA, FP2, Supplier environmental assessment G4-DMA, G4-EN33, Supplier assessment for labor practices G4-DMA,
G4-LA15, G4-HR10, G4-SO9, G4-SO10
The Nestlé RSG also goes beyond the RSPO standard. The
RSG makes explicit provisions for the protection of peatland
and high-carbon forest, which are critical in combating
deforestation, and for preventing social conflict arising from
potential disputes over land rights and land acquisition.
Traceability in the supply chain
Nestlé is working with its suppliers towards plantation-level
traceability for all our foods and beverages, but in the palm oil
supply chain there has been a lack of available information.
To address this, we use our Traceability Declaration Document
(TDD), which suppliers complete quarterly to declare the
supply chain linked to our foods and beverages. Although
information gaps remain, the TDD allows for unprecedented
transparency and facilitates discussions with suppliers to
address those gaps.
The information obtained is used to determine which mills
and growers are prioritised for assessments, so that we can
better understand their practices and provide ways to
strengthen policies, systems and practices against our RSG.
This is a necessary first step to reach our ultimate goal of
having our entire supply chain RSG compliant.
Although there are many challenges, we remain determined
to collaborate with others to make progress towards our goals.
Together with TFT, we have made major progress in engaging
with leading suppliers – notably Sime Darby, Wilmar
International, Cargill and a collaboration between Golden Agri-
Resources in Indonesia and Oleofats in the Philippines – that
have established traceable supply chains that are also
assessed against the RSG. For example, Florin AG, based in
Switzerland, has established its own Palm Oil Sourcing Policy
that aligns with our own – all the oil it purchases is traceable,
RSPO certified and deforestation-free.
Palm oil supply chain traceability results
420 000 tonnes
90%
47%
Total volume:
420000 tonnes
Percentage of volume
traceable: 90%
(2015 target: 95%) to mill
Percentage of volume
Responsibly Sourced: 47%
(2015 target: 70%)
GreenPalm certificates
We have almost reached our newly stated, more ambitious
target for increased traceability and supplier engagement.
However, we also recognise that until traceability becomes
feasible for all supply chains, including for complex blends of
palm-based derivatives, GreenPalm certificates will have a role
to play in supporting producers of certified sustainable palm oil.
Since 2010, we have used RSPO GreenPalm certificates to
offset our purchases of palm oil and contribute to the
development of best practice in the palm oil industry. This
mechanism has helped us demonstrate our sustainability
commitments to suppliers, plantation owners, customers and
consumer communities. But it was always a temporary
solution while we identified palm oil origins and started to
assess and help remediate the root causes of deforestation
and poor labour conditions.
Following last year’s decision to phase out the use of RSPO
GreenPalm certificates to offset our purchases of palm oil, we
have begun working towards this aim. In January 2015, we
started phasing out the purchase of GreenPalm certificates for
the palm oil that is traceable back to the mill and began
diverting resources to partnership activities to support palm oil
smallholders.
As a first step towards supporting smallholders, Nestlé is
funding Rurality, an initiative of TFT that aims to engage with
smallholders, identify scaleable improvement opportunities
and build a train-the-trainer model that facilitates the sharing
of best practice. As Rurality develops, we will align our Rural
Development Framework with it; TFT is currently identifying
five countries to work with.
Read our latest Progress Report on Responsible
Sourcing of Palm Oil.
Palm oil study tour to Indonesia
In October 2015, Nestlé organised a multi-stakeholder study
tour to Sumatra, Indonesia. The tour included palm oil
suppliers Golden Agri-Resources and Musim Mas, as well as
environmental NGOs, Rainforest Action Network (RAN),
Greenpeace, and the Forest Peoples Programme (FPP). The
visit was organised in conjunction with TFT. Through this study
tour, Nestlé was able to generate dialogue with the NGOs and
supply chain partners concerning the very complex issues
found throughout the palm oil industry. These challenges
include, but are not limited to, smallholder/dealer traceability,
clearing by smallholders, labour practices on plantations,
conflict situations with communities, and encroachment on
protected areas. Through the active exchange with
participating organisations on the tour, Nestlé will look to apply
many of the findings and reflections into its Responsible
Sourcing programme. Nestlé acknowledges that collaboration
with relevant stakeholders is critical, with each playing their
particular role, for the achievement of zero deforestation in the
palm oil industry.
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