Responsibly Sourced Palm Oil
We are dedicated to using 100% responsibly-sourced palm oil and 100% RSPO-certified palm oil by 2023.
We use palm oil as an ingredient in a number of Nestlé products. To address sustainability challenges in our palm oil supply chains, we start by understanding where the palm oil comes from and how it is produced. We buy from processing companies that source palm oil in Malaysia, Indonesia, Latin America and West Africa. And we work with expert organizations and the industry to continually improve environmental and social practices.
Our Progress Toward Sustainable Palm Oil Production
No Deforestation & Landscapes (Forest Positive Strategy)
As we continue working towards Nestlé’s global pledge to end deforestation within our palm oil supply chains, we have leveraged global satellite monitoring since 2019 to locate areas of deforestation. This has been accomplished with Starling, a tool co-developed with Airbus and Earthworm Foundation, which utilises satellite images to identify signs of deforestation. Through our findings, we are able to respond to deforestation risks and engage with suppliers to take appropriate measures. These actions are also detailed in our palm oil Transparency Dashboard report.
In tandem, under our Forest Positive strategy, we take a broad approach that goes beyond managing deforestation risks in our own supply chain. To this end, Nestlé is the Co-Funder for the Southern Central Forest Spine (SCFS) Landscape initiative, initiated by the Earthworm Foundation in 2021. The initiative represents a collaborative effort between the Government, companies and civil society organisations, including a three-year partnership between Earthworm and the Malaysia Palm Oil Board, as well as a multi-stakeholder partnership to address Human Elephant Conflict (HEC) in Johor.
Forest and Peat Conservation and Restoration
In 2020, our Kinabatangan Rileaf Project drew to a close with one million trees successfully planted to support forest and peat conservation and restoration. Scaling up our efforts, we extended our journey with Project RELeaf, through which we target to plant three million trees in Malaysia by 2024. This will support the establishment of wildlife corridors to mitigate human animal conflict alongside restoring riparian zones and forest ecosystems. While the pandemic caused delays to planting activities, during the year we took steps to accelerate our progress by partnering with local communities and seedling nurseries to produce nearly one million seedlings and saplings.
In tandem with Project RELeaf, we are also spearheading long-term sustainable conservation and reforestation of forests in our palm oil sourcing regions through the Rimba Collective. Under this initiative, we aim to protect or restore 500,000 hectares of forest to support 32,000 individuals in forest communities across Southeast Asia over a 30 year-period. In 2022, we continued to work with relevant industry players and suppliers to implement the Rimba Collective, which entails a financial model that links costs to procurement volumes. In line with the Nestlé strategy, funding is channelled into a Special Purpose Vehicle as long-term sustainable financing for Forest Positive action.
Supporting Smallholders
Understanding the important role that smallholders play in the palm oil industry, we support them in the implementation of best agricultural practices, which subsequently helps to reduce costs alongside diversifying income to enhance their livelihoods. Through the SCFS Landscape initiative, we have engaged with 187 smallholders to achieve this purpose.
We also engage smallholders through our Rurality project, which addresses HEC in Sabah arising from habitat loss. The project involves community awareness programmes with smallholders alongside conducting patrols, data collection, elephant relocation and establishing wildlife corridors by HEC mitigation committee members comprising representatives from the Sabah Wildlife Department, smallholders, plantations and local NGOs.
Respecting Human Rights
To protect vulnerable communities within the palm oil supply chain, we implemented the 2021- 2025 Labour Rights Action Plan for Palm Oil in April 2021. Based on an established framework, this entails engaging our suppliers and shaping action plans to tackle pertinent issues based on their risk profiles. We also collaborate with our partners to develop corrective measures and mechanisms to monitor progress.
In 2022, we partnered with our suppliers and implementation partners such as Verité, the Earthworm Foundation, and Embode, as part of our work with Winrock International to support the advancement of our Palm Oil suppliers’ due diligence systems. This involved engagements with a total of six suppliers in Malaysia, Indonesia and Nigeria, with mill, refinery and plantation-level assessments conducted to address relevant gaps. Under this initiative, we also conducted training and capacity building programmes and devised improvement plans based on the findings of the assessments.
