Our pulp and paper supply chain
We buy packaging paper and boxes directly from printers and packaging manufacturers worldwide. In 2019, 55% of the total pulp and paper we purchased was from recycled materials. Recycling in the pulp and paper industry is well established, but food safety requirements, quality and physical properties prevent us from using 100% recycled materials. We do not map and assess the upstream supply for recycled material in the same way that we do for virgin pulp and paper, as recycled material is not considered as adding to deforestation.
Based on country of harvest data collected in 2019 as part of our supply chain mapping, the top 13 supplying countries in order of volume are: USA, Chile, Sweden, Brazil, Russia, Finland, France, Latvia, Norway, Poland, Estonia, Austria and Canada.
Our approach to sourcing pulp and paper sustainably
We aim to source only pulp and paper that meet our ‘deforestation-free’ commitment for our supply chains or at the very least come from suppliers making measurable progress toward meeting it. Our category-specific requirements for pulp and paper, developed in conjunction with our partner Earthworm Foundation, require:
- Adherence to local and national regulations and laws.
- Protection of high-carbon-stock forests.
- Protection of high-conservation-value sites.
- No development on peat, regardless of depth.
- Respecting the process of free, prior and informed consent.
Our Responsible Sourcing Standard (pdf, 2.4Mb) reinforces our specific commitments on deforestation and forest stewardship, rural development and water stewardship.
We also use certifications such as Forest Stewardship Council (FSC) and Programme for Endorsement of Forest Certification (PEFC) as tools to demonstrate compliance.
Growing demand for fiber
Most pulp is produced in North America, Europe, China and Japan, using fiber sourced from these countries/regions and from further afield. Large investments are now being made in South America, Africa, Asia and Russia, attracted by lower production costs, shorter crop rotations in the tropics and in some cases the availability of natural forest fiber in temperate and boreal regions.
Expansion is planned through new capacity or areas where new plantations are being developed. In these cases, the fiber does not enter our supply chain, as it takes years to install capacity and establish these plantations. However, we are seeking to be more proactive to better understand where and how this expansion is happening. Where we have existing links through our ongoing responsible sourcing work, we are looking at how best to ensure that the requirements of our Responsible Sourcing Standard (pdf, 2.4Mb) are met prior to any increase in capacity or establishment of new plantations.
To hold our suppliers and ourselves accountable as well as driving industry-wide transparency, we have published the list of our direct suppliers (pdf, 0.3Mb) and the list of related pulp mills in our upstream supply chain. This will help us to continue to focus our resources on tackling the most relevant challenges in our supply chains to drive responsible forest management. We have seen that others have followed suit, which is encouraging. However, more efforts are needed, especially in some geographies, to make transparency the industry norm.
Deforestation and degradation
In 2010, we made a ‘deforestation-free’ commitment for our supply chains, stating that all of our products, globally, will not be associated with deforestation by 2020. Since 2010, we have been using a combination of tools, including supply chain mapping, certification, on-the-ground verification and, more recently, Starling satellite monitoring, to ensure that the pulp and paper we buy is not linked to deforestation. As of March 2020, 93% of the pulp and paper we buy was verified deforestation-free (pdf, 200 Kb). We will continue to work with our partners and suppliers to close the gap.
Many of the concerns that gave rise to our no-deforestation commitments also motivate us to address forest degradation or the loss of key forest attributes, such as biodiversity or carbon storage. Indeed, degradation can lead to fragmentation and ultimately deforestation.
Sometimes, it can be easy to identify deforestation that breaches our policy. For example, converting rainforests to tree plantations clearly violates our specific requirement to protect high-conservation-value (HCV) forest and peatlands.
However, other forests from which we source carry inherently low risks of deforestation or significant degradation. These include long-established plantations and other areas where there is a high level of governance from national, environmental and social organizations.
Between these extremes, there is a wide and varied range of degradation. At the severe end of this spectrum, forests may verge on deforestation even if there is no unambiguous breach of policies, raising challenges to the principle of ‘responsible’ production.
Innovating for improvement
We need to make progress faster to improve traceability. Innovations – particularly in digital technologies – are a key part of this. In 2018, we started using SupplyShift, a cloud-based platform to help us collect and analyze data to map our supply chain for our corrugated and solid board suppliers globally. We are still trialing this technology to see how it can help us gain the data we need to guide and drive our supplier engagement and purchasing decisions to meet our responsible sourcing commitments.
We are also partnering with Airbus and Earthworm Foundation to use Starling, a satellite-based service that will help us determine where forest loss in our supply chain is resulting in deforestation and degradation of HCV forests. In order to develop base maps of forest cover, we trialed this technology in four locations in 2019: Northwest Russia, Southeast USA, British Columbia in Canada and Sumatra in Indonesia. We will monitor forest cover change in these locations in 2020. We are also exploring how the technology can be used to map forest biomass and productivity, which could support resource use planning decisions and potentially monitor carbon trends.
Our recent Climate Pledge to commit to net-zero emissions by 2050 will also push us to seek new innovations to inset our emissions through restoration and conservation activities at the forest source with our pulp and paper suppliers.
The use of recovered fiber is an important component of some of our packaging products, making up 55% of the scope of our work on pulp and paper. While the reuse of waste packaging helps to reduce the demands on virgin fiber and therefore reduce pressure on forests, which is positive, we are also aware that there could be other social challenges given the informality of the waste collection sector in some of our recovered fiber supply chains. We are therefore seeking a better understanding of these issues, starting in India and Brazil, and where and how we can play a positive role in improving practices. This is an area where our work overlaps with our work on plastics and where we are increasingly seeking cross-ingredient interventions.
Protecting forest landscapes in Russia
The heavily forested Arkhangelsk Oblast in Russia is a key sourcing area for Nestlé. Given the presence of intact forest landscapes (IFLs), an HCV category, we have been engaging with our suppliers in the region for the last five years to understand their forestry operations and our exposure to fiber from IFLs.
Our initial visits in 2016 with Earthworm Foundation indicated that the extensive forest model in Russia was contributing to putting these IFLs under pressure as forestry companies sought new, unexploited areas to log. A subsequent Greenpeace report, Eyes on the Taiga, highlighted the case of a particular IFL – the Dvinsky – that has been threatened by logging operations in the region, and Nestlé’s links to it.
Since then, we have sought to remain engaged with our suppliers and use our influence to improve practices. We are exploring how to balance the competing needs in the region – from the production aspects of the forest sector to the protection of IFLs and support of rural communities dependent upon these landscapes.
An example of this was a Starling satellite technology pilot we initiated with our supplier to monitor the 300 000-hectare voluntary moratorium area of the remaining IFL core, established in April 2018, with the aim to help demonstrate that the supplier was respecting its moratorium commitments. We expanded this pilot to map forest cover attributes within a larger area in Arkhangelsk Oblast in 2019 and will aim to monitor change over 15 million hectares in 2020.
This has helped us to remain engaged with industry and other stakeholders in the region and supports our ambitions to further collaborate in 2020 toward a healthy and productive forest landscape. Our engagement is now more critical than ever, given that there was a breach in the new Dvina-Pinega Reserve in 2019. We are already working with our suppliers and other stakeholders to ensure that this does not happen again, supporting suppliers to meet our responsible sourcing expectations.
Collaborating for greater impact
While we fully recognize our responsibility to tackle issues in our pulp and paper supply chain, we do not always have the leverage alone to be able to drive and scale up change. To this end, we have actively sought opportunities to collaborate with like-minded companies on issues and landscapes. In 2019, we partnered with Earthworm Foundation members Mars, Inc. and 3M on activities in Southeast USA, Canada, Brazil and Russia as well as exploring opportunities with NGOs such as WWF.
This approach is already bringing value and benefits. We will continue to actively seek and grow these opportunities in 2020.
Protecting children and workers
Increasing awareness of land rights in Brazil
Social conflicts around land use and land rights are frequent in Brazil and throughout Latin America. The origin of these conflicts is connected to the historical occupation of the territory, the fragile land governance system in place and how companies acquired land for their forest plantations.
The Free, Prior and Informed Consent (FPIC) Initiative aims to establish a set of practices in the private sector to offer consistent protection of community rights, prevent and solve social conflicts, and create shared values between forestry companies and neighboring communities, some of which are traditional communities.
Assessments of virgin wood fiber suppliers in Brazil identified a need to train their employees in better understanding FPIC and its applications. In 2019, our partner Earthworm Foundation ran a four-day training program, FPIC: from Theory to Practice. The program attracted 27 attendees from six companies, representing around 30% of the planted forest area in Brazil, as well as an Argentinian company.
Two of the companies represented were further coached on implementing FPIC pilot projects, which seek to reach consent from indigenous and rural settlement groups to use forest plantations next to their land. Two of these projects will be documented in case studies to share lessons learned and inspire transformation with a larger group of companies and stakeholders.
Strengthening farmers’ resilience in Vietnam
Run in partnership with Earthworm Foundation, the Rurality program works through supply chains to strengthen the resilience of farming communities. By supporting famers and buyers to build stronger links, Rurality helps improve livelihoods and social conditions for the farmers and their communities.
One such project works with smallholder acacia farmers supplying a chip mill in Nestlé’s pulp and paper supply chain in Bình Thuận Province, Vietnam. In 2018, Earthworm Foundation conducted an initial diagnostic exercise to understand the supply chain, conditions on the ground and opportunities to improve smallholder resilience.
The project identified a number of challenges, including poor-quality seedlings and agricultural practices leading to low productivity, a lack of awareness of both pest and disease control and health and safety, limited options for income diversification and declining soil fertility due to poor land management.
To date, the project has achieved the following:
- 183 farmers (including 17 women) have benefited from training and coaching.
- Plant quality has improved, with Rurality supporting the purchase and planting of 44 000 higher-quality acacia seedlings (equivalent to 19 hectares) in 2019.
- 124 smallholders have received classroom and field-based training, delivered in partnership with the Forest Science Institute of South Vietnam and the Plant Protection Department of Bình Thuận Province, on pest and disease management, the role of seedlings and best management practices for acacia.