July 2010
Deforestation
Nestlé views destruction of tropical rainforests and peatlands as one of the most serious environmental issues facing us today. It is estimated that rainforest destruction contributes to around 20% of carbon dioxide emissions – more than the entire transport sector. The growing use of biofuels is a serious factor in this destruction – which we have vigorously condemned.
At the April Annual General Meeting our Chairman Peter Brabeck-Letmathe reinforced this position and repeated our support for a moratorium on the destruction of rainforests.
Since then, José Lopez, Executive Vice President Nestlé S.A., has announced further actions including a partnership with The Forest Trust (TFT). Together with TFT, Nestlé has established Responsible Sourcing Guidelines and has committed to ensuring that its products do not have a deforestation footprint. This is the first time any company has made such a commitment.
Nestle is committed to communicating regularly on progress, including holding regular meetings with Greenpeace. Since making this announcement, TFT and Nestlé have established a strong action plan to implement Nestlé's commitment. Supplier assessments against the Nestlé Responsible Sourcing Guidelines will start during July 2010. Action plans will be developed with each supplier to ensure traceability and sustainability. This will include technical assistance to ensure full legal compliance of all plantation activities and to identify and protect forests of High Conservation Value, peatlands and high carbon value forests. In addition, technical support will focus on building relationships with indigenous and local communities and implementing programs to ensure they secure their rights in the face of plantation establishment programs.
Building partnerships
In addition, we are intensifying our cooperation with international organisations to build a global movement to support the development, implementation and disclosure of sustainable forestry practices. We have joined a coalition calling for a moratorium on rainforest destruction for palm oil in Indonesia and have become an active member of the Round Table on Sustainable Palm Oil (RSPO). Visit the RSPO website 
Leveraging our expertise
In addition to the technical assistance for suppliers, we are intensifying our work on the ground by leveraging our extensive expertise in Research and Development, particularly in tree science and in agronomy where we give direct assistance and share best practice with local farmers. In Indonesia we are joining efforts with a supplier, Wilmar, in a smallholder project to improve palm oil practices. The positive impact on productivity would in turn mitigate risks of deforestation.
Highlighting impact of biofuel
We are stepping up our vigorous advocacy against the use of food products for biofuels which is a serious factor in the destruction of the rainforests. Read a presentation from Peter Brabeck-Letmathe on the subject of biofuel at the FAO Private Sector Forum in Milan.
Visualise the oil usage for biofuel production (pdf, 462 kb)
Taking action with our suppliers
The supply chain of palm oil is very complex and there are no quick and easy solutions. We have conducted an in depth analysis of our supply chain in order to create transparency and detailed action plans. Read more about the complexity of the palm oil supply chain in the RSPO Supply Chain Systems Overview (pdf, 3.95MB)
As previously announced, we have suspended all purchases from Sinar Mas, which has admitted to mistakes in the area of deforestation. We can also confirm that we have made arrangements with a number of suppliers, including Cargill, to suspend purchasing from Sinar Mas for delivery to our European factories. Read Cargill’s commitment . All suppliers need to comply with our Responsible Sourcing Guidelines.
Auditing the supply chain
Although Nestlé only buys 0.7 per cent of world palm oil production, we are conscious of our responsibility in contributing to effective and sustainable solutions.
The Nestlé Responsible Sourcing Guidelines are a set of critical requirements to guide the Nestlé procurement process and ensure compliance with the Nestlé Supplier Code. In partnership with TFT we will focus on assessing suppliers’ performance with respect to these guidelines and on providing technical support to those who currently do not meet the requirements, but who are committed to achieving sustainability. More information: Nestlé open forum on deforestation
In April, Sinar Mas announced the hiring of two independent auditors (CUC and BSI) to address the allegations made about them by Greenpeace. The audit is currently in process. The result of the audit carried out by Sinar Mas will be an important input into the overall Nestlé Palm Oil Responsible Sourcing Program. However, the re-establishment of the commercial relationship with Sinar Mas is conditional on the completion of the audit program in all their plantations against the Nestlé Responsible Sourcing Guidelines.
In terms of all our sourcing, not just for palm oil, we have been conducting responsible sourcing audits to ensure compliance to our Supplier Code since 2009 through the Supplier Ethical Data Exchange (Sedex) which enables businesses to share ethical data on their supply chains. We have a structured process that prioritises high risk materials and high risk countries. Read more on the Sedex website
Packaging, paper and pulp
We will also be working with TFT to ensure our deforestation commitments are implemented with respect to all the pulp and paper we use, including our packaging made from paper and pulp. We have developed an action plan with TFT which includes the mapping of our total supply chain and seeking suppliers who can guarantee that their packaging does not contain paper pulp from rainforest destruction. Regarding APP, we buy no products from them and the mapping exercise will help identfy any suppliers who do so.
Sustainable palm oil
With regards to our pledge to achieve sustainable palm oil by 2015, we are making progress on certified palm oil and palm oil certificates even more rapidly, with 18% of our purchases covered in 2010, and we expect to reach 50% by the end of 2011.
Read more on palm oil in the Creating Shared Value section of this website.
Next steps
We will be making regular updates about our commitments, progress and actions towards making a moratorium on the destruction of tropical rainforests and peatlands a reality.
Related links
Chairman response to deforestation:
Video (02:45mins)
Letter to Greenpeace (pdf, 633 kb)