PepsiCo makes progress toward sustainability goal

by Matt Hamer
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PepsiCo Palm Oil sustainability action plan
PepsiCo announced progress on its palm oil goals in its annual "Palm Oil Action Plan Progress Report."
 

PURCHASE, N.Y. — PepsiCo, Inc. announced progress in its goal to use 100% sustainable oil by the year 2020. In its annual “Palm Oil Action Plan Progress Report,” the company outlined efforts to strengthen its supply chain, including steps taken to promote human rights, responsible land use and supplier transparency.

According to the report, PepsiCo can now trace 89% of the palm oil it expects to use during 2017 to the mill level, which is up from 65% in 2015. The company also has taken steps to extend traceability to the plantation level, aiming for 100% traceability by 2020.

“PepsiCo takes environmental and social issues within the palm oil industry very seriously, and we are making significant investments to improve every aspect of our palm oil supply chain,” said Rob Meyers, sustainability director, PepsiCo. “We have made important progress, achieving substantially greater visibility into our suppliers’ activities and moving closer to our goal of sustainably sourcing 100% of our palm oil by 2020. PepsiCo is committed to doing much more, and we believe that the steps we are taking to promote higher standards among palm suppliers will place us at the forefront of our industry.”

In addition to increased traceability, PepsiCo also introduced a scorecard it can use with its palm oil suppliers to improve their performance in the areas of human rights, peat loss and land use policies. The company also formalized its grievance system for dealing with allegations of inappropriate supplier conduct. Reports of non-compliance with PepsiCo’s standards can now be investigated and support provided to ensure issues are addressed, with consequences for suppliers if they fail to take sufficient corrective measures.

PepsiCo’s goal of 100% sustainable palm oil by 2020 was outlined in its 2015 Palm Oil Action Plan developed using the Roundtable for Sustainable Palm Oil (R.S.P.O.) standard. The action plan seeks to address significant concerns about the environmental and human rights impacts associated with palm oil production. Last year, the plan was evaluated by the World Wildlife Fund in a ranking of global consumer goods companies, earning the highest available score.

Darrel Webber, R.S.P.O.
Darrel Webber, c.e.o. of the R.S.P.O. 

“We are pleased to see the progress that PepsiCo has made on the implementation of their Palm Oil Action Plan, and the level of transparency demonstrated in this report," said Darrel Webber, chief executive officer of the R.S.P.O. “The progress made on the ground in the plantations and at the mills relies heavily on the commitment of our membership, sometimes on the other side of the world, increasing their purchasing of certified sustainable palm oil for the products that they make or sell. It is paramount that all actors avoid short-termism while setting time-bound commitments and working to implement those commitments with urgency.”

Currently, 16% of the palm oil PepsiCo buys is R.S.P.O. physically certified sustainable. The company hopes for that figure to rise to 30% by the end of 2017 with the eventual goal of 100% by 2020. Ninety-eight per cent of the palm oil that PepsiCo currently uses comes from R.S.P.O. member suppliers.

PepsiCo also has made investments in the improvement of practices in key palm oil sourcing regions. The company now sponsors the National Interpretation of the R.S.P.O. Principles and Criteria in Mexico, and supports a program that provides training on High Conservation Value and High Carbon Stock assessments. 

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