Ferrero Commits to Source Palm Oil through ‘Palm Oil Charter’

Ferrero Group introduced its new Palm Oil Charter, in which the company outlines its ongoing mission to achieve a palm oil industry that is beneficial for both people and nature.

Originally announced in 2013, the first Palm Oil Charter acted as a driver for the group’s development of its responsible palm oil supply chain; a public commitment that took into consideration the company’s key values and its broader sustainability strategy. Presently, Ferrero further reinforces its commitments and progress through an updated Charter, which has been elevated on the basis of the company’s ongoing learning journey and insights generated by close partnership with stakeholders at every level, from suppliers to NGOs through to academic partners.

The new Charter has been developed with Earthworm Foundation; a non-profit organization aimed on positively enhancing the value chains.

As a baseline, the company procures sustainable palm oil that is 100% RSPO (Roundtable on Sustainable Palm Oil) Certified Segregated and traceable back to plantations: a target initially reached in 2015, becoming one of the first global companies to do so.

The company’s strategy towards responsible sourcing of palm oil goes beyond this high certification standard through active membership in POIG (Palm Oil Innovation Group) and HCSA (High Carbon Stock Approach), two of the utmost value endorsement initiatives presently available for the industry. As part of this approach, the new Charter outlines further actions, tackling three strategic areas recognized as critical in an intricate industry where environmental and social issues are oftentimes deeply rooted, complex, and interconnected:

Human Rights & Social Practices: The company believes in the significance of building a more equitable and inclusive palm oil value chain, requiring our suppliers to take necessary measures to avoid any form of exploitation, indecent living or working conditions. The company is going beyond these essential rights by aiding smallholders build resilience in the face of environmental and economic volatility – as well as ameliorated working conditions – through the association with local governments, NGOs and scientists. The company also knows the importance that indigenous communities are fully engaged whenever agricultural land expansion may occur.

Environmental Protection & Sustainability: The company is dedicated to having a palm oil value chain that not only respects the environment but also becomes a optimistic driver to regenerate biodiversity, soils, and water systems. Among the initiatives in this focus area, the company is committed to a “no-deforestation” supply chain which includes no planting on peat, no using fire to clear land, and ensuring the protection of forests and natural habitats. Furthermore, the company utilizes the Starling Satellite Monitoring System to recognize potential deforestation in the approx. one million hectares of our supply chain.

Supplier transparency: The company addressed the above issues by fostering a fully transparent, shared responsibility approach across the value chain, as well as mandated all suppliers to stick to the group’s criteria. The company does this by sharing the list of mills from which we procure our palm oil every six months. The company goes beyond with actions such as publishing an action plan and a annual progress report measured against the goals highlighted in the Charter, as well as offering an “Integrity Helpline” to confidentially indicate any potential grievances or cases of non-compliance.

Also, following recent acquisitions, the company has welcomed new products into the elaborated family and is presently working to merge them into the supply chain by bringing them up to the company’s overall responsible palm oil sourcing benchmarks.

Marco Gonçalves, Ferrero’s chief procurement and Hazelnut Company officer stated- “At Ferrero, we take a continuous improvement approach to our value chain and understand the environmental and societal challenges tied to the palm oil industry; this is why we proudly reaffirm our commitments to responsible palm oil sourcing through our new Charter. We look forward to continue our learning journey and go beyond high certification standards with concrete actions that contribute to a more sustainable industry.”

Bastien Sachet, Earthworm Foundation, CEO informed- “We welcome this updated charter for three reasons: Firstly, because it builds on a successful implementation of previous commitments and therefore it associates words to action. Secondly, Ferrero is demonstrating its commitment to driving environmental and social excellence linked to strong core values and long-term change. Finally, this Charter will inspire other companies to raise their own bar, as collective leverage and action remains critical to scale impact beyond one company’s supply chain.”

In addition, the company welcomes the European Commission’s upcoming proposals on Mandatory Due Diligence and new legislation to alleviate the risk of deforestation and forest degradation related with products distributed throughout the European Union.

Francesco Tramontin, vice president, Ferrero Group Public Policy Center and EU Institutional Affairs mentioned – “Our new Palm Oil Charter is an example of Ferrero’s commitment and actions towards responsible palm oil sourcing. But sector-wide change is needed. In this spirit, we believe that proper EU rules applicable to all relevant companies – coupled with the right cooperation framework with producing countries – can be a game-changer in driving palm oil supply chain systemic transformation, as well as preventing negative environmental and human rights impacts.”