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Supply Chain
This Week in Sustainable Palm Oil — Featuring PepsiCo, IKEA & Unilever

On Wednesday, PepsiCo’s newly launched Pepsi True was pulled from after being overwhelmed by negative reviews from rainforest activists calling out Pepsi for its failure to adopt more responsible palm oil policies that will help end deforestation and modern slavery in South East Asia.

The campaign, which comes one month after the celebrated launch of Pepsi True for exclusive sale on Amazon, involved thousands of activists and consumers from corporate watchdog and the Rainforest Action Network, who overwhelmed the product’s page with bad reviews urging the company to adopt better palm oil policies. Within a few hours of the campaign, Pepsi True was removed from the marketplace.

Activists pointed out that, as one of the largest palm oil purchasers in the world, Pepsi’s failure to commit to sustainable palm oil policies continues to fuel deforestation and modern slavery in South East Asia.

This year, many of Pepsi’s direct competitors — including Nestlé, Mars, Kellogg, Unilever, P&G and Ferrero — have pledged to use only conflict-free, sustainable palm oil, and work towards zero-deforestation policies. In May, the food and beverage giant released an updated commitment that several NGOs called a “major improvement” but agreed it fell short of the necessary steps in several areas. More than 223,000 people from around the world have signed a petition by urging PepsiCo to step up its efforts.

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Pepsi True was returned to Amazon on Friday; the product had scored over 3,500 negative reviews as of press time.

Also on Wednesday, at the 12th Round Table of the Roundtable on Sustainable Palm Oil (RSPO) in Kuala Lumpur, Unilever published its sustainable palm oil progress report, highlighting significant steps forward in the traceability of palm oil from known sources:

  • All palm oil directly sourced for its European Foods business will be 100 percent traceable and certified sustainable by the end of 2014
  • Unilever now has visibility of around 1,800 crude palm oil mills, representing roughly two- thirds of all mills in the global palm oil industry
  • 58 percent of its palm oil is now traceable to known mills

The company acknowledges that knowing the origin of palm oil is vital to halting deforestation, which blights communities and the environment.

Pier Luigi Sigismondi, Unilever's Chief Supply Chain Officer, said: “2014 has been a defining year for our goal to create a more transparent palm oil industry. Knowing where it comes from is a critical step in the journey. The challenge is enormous and not easy to achieve but we are determined and can now report good progress. We want to share our learnings with the rest of the industry.”

Unilever says it is firmly committed to smallholder farmers and with its suppliers, is working towards improving livelihoods, incomes and working conditions. The company says engaging with smallholders on palm oil is the next stage of the challenge and is critical to achieving full traceability. Unilever says it is gathering best practices from its global smallholder farmer program with other commodities and applying this knowledge to palm oil.

On Friday, Greenpeace applauded a new sustainable palm oil sourcing policy from IKEA. The Swedish company uses the oil in its candles and in some food products and snacks — its new policy commits to ensuring that all palm oil from rainforest and peatland areas will be removed from the production chain by 2017. All palm oil found in IKEA products will be traceable all the way from the store shelf to the plantation, with care taken to respect the rights of indigenous peoples and workers.

“IKEA's decision to clean up its supply chain for products containing palm oil is good news," said Joao Talocchi, Palm Oil Campaigner for Greenpeace USA. “Commitments over the past year from companies like Procter & Gamble, Colgate-Palmolive and General Mills have brought the palm oil industry to a tipping point. We’re now at the stage where it's unacceptable for companies not to address rainforest destruction with their suppliers."

Greenpeace says IKEA's commitment goes further than the targets set by the palm oil industry's largest certification system, the RSPO, which has been criticized for being too vague and unable to guarantee that the link to rainforest destruction is eliminated. To increase control, Greenpeace encourages IKEA to continue the work to strengthen the definition of the forest that should be protected, and become part of the Palm Oil Innovation Group, whose commitment improves on the RSPO.


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