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PepsiCo is changing its global policy on sourcing sustainable palm oil in an effort to help lift production standards across the broader palm oil sector. It will cover its entire supply chain, including direct suppliers and production sources.

The company says its updated Global Policy on Sustainable Palm Oil will see it commit to: no deforestation; no development on peat; and no exploitation of the rights of indigenous people, workers or local communities. It aims to trace 100 per cent of its palm oil mills and plantations, as well as source 100 per cent physically certified Roundtable on Sustainable Palm Oil (RSPO) sustainable palm oil, by the end of 2020.

The policy will apply to all of PepsiCo’s operations, subsidiaries, joint ventures, brand and products worldwide, where the company says, “it also serves as an expectation of our business partners, at the group level, that directly product palm oil”.

In PepsiCo’s 2018 Palm Oil Progress Report, the company said it achieved 52 per cent RSPO certified sustainable palm oil, and 97 per cent traceability to mill by the end of 2018, up from 94 per cent in 2017 and 65 per cent in 2016.

The announcement also follows the release of the WWF Palm Oil Buyers Scorecard 2020, which ranked Ferrero in the top spot as having the most sustainable palm oil supply chain in the industry.

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A number of manufacturers, however, continue to be linked to fire hotspots around the world after purchasing from palm oil producer groups based in such areas. In particular, countries such as Indonesia and Malaysia are among the highest pam oil producers in the world, holding the global market share of 51.7 per cent and 32.7 per cent, respectively. 

In November, Greenpeace said companies such as Unilever, Mondelez and Nestle “have created a facade of sustainability,” where the “reality is that they source from the very worst offenders across the board”. Greenpeace also found commitments to end deforestation by 2020 were “likely impossible” to be achieved.

It said: “None of the 350 most influential companies with forest-relevant operations are on track to achieve their supply-chain commitments by 2020,” and “only eight per cent of companies have zero-deforestation commitments that cover all their supply chains and operations”.

Australian-based non-profit organisation The Orangutan Alliance is a registered charity offering a Palm Oil Free certification program.

Orangutan Alliance chairperson Maria Abadilla told Food & Drink Business that changing consumer sentiment and pressure is creating a demand for companies to change their sourcing programs.

“One of the gaps on this issue is the development of further alternatives that are affordable, functional, fully traceable and does not require more land for production or impact endangered species and the environment,” said Abadilla.

“We are seeing new developments such as alternatives created by Revive Eco from coffee waste, others from yeast fermentation and even one from C16 Biosciences that will change the landscape in alternatives.”

“Beyond policy statements, the industry needs to get behind acceleration of investment and development of alternatives that do not require land for production. But even more importantly, action in support reforestation projects as well as conservation that will reverse the environmental impact we have experienced from non-sustainable palm oil production.”

Orangutan Alliance provides palm free certification for products, manufacturers and retailers internationally. Profits from their program supports conservation, reforestation and projects that have been impacted by non-sustainable palm oil production.

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