Nestlé nixes unsustainable suppliers

May 26, 2010
by Purchasingb2b Staff

Food giant Nestlé has announced that it will stop sourcing products that contribute to the destruction of rainforests and peatlands in Indonesia.

Earlier this month, Nestlé agreed to stop buying palm oil from suppliers whose activities are linked to destruction of forests in the developing world, including Sinar Mas, whose expanding plantations in Indonesia have pushed endangered orangutans to the point of extinction, according to environmental watchdog Greenpeace.

Under its new policy, Nestlé has committed to identify and exclude companies from that own or manage high-risk plantations or farms linked to deforestation. It will come up with a set of critical requirements that will guide its procurement process and ensure compliance.

Nestlé reports that, while the palm oil supply chain is very complex and not easily changed, it has conducted an in-depth analysis of its sourcing practices to create transparent and detailed action plans.

It has partnered with Geneva-based non-profit The Forest Trust (TFT) to help achieve these goals in its supply chains in Southeast Asia.

"The partnership [with TFT] starts with palm oil, and Nestlé is studying its supply chains to determine a similarly ambitious target for the pulp and paper it uses,” the company said in a statement.

The reason for change

Global demand for palm oil and paper have been increasing in recent years. As a result, Indonesia has one of the fastest rates of forest destruction on the planet and has become the world’s third-largest greenhouse gas emitter (after China and the US).

These developments comprised much of the reason Nestlé decided to change its sourcing patterns.

“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 percent of carbon dioxide emissions—more than the entire transport sector,” the company stated.

“We are intensifying our co-operation with international organizations 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).”

Greenpeace—which has lobbied Nestlé to change its sourcing practices for some time—praised the company’s decision to source ethically.

“Since the beginning of our campaign, hundreds of thousands of people have contacted Nestle to say that they will not buy products linked to rainforest destruction,” said Greenpeace’s Rolf Skar.