PepsiCo announces progress towards sustainable palm oil supply chain target

By Tom Wadlow
Global food and drink manufacturer PepsiCo has released an update on its sustainable palm oil programme, which targets 100% sustainable sourcing by 2...

Global food and drink manufacturer PepsiCo has released an update on its sustainable palm oil programme, which targets 100% sustainable sourcing by 2020.

In its annual Palm Oil Action Plan Progress Report, PepsiCo said that 89% of the palm oil it expects to use during 2017 has been traced to the mill level, up from 65% in 2015.

It says it has also taken steps to extend traceability beyond the mill to plantation level across its entire palm oil supply chain, which it aims to achieve by 2020.

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As part of the report, the company unveiled new initiatives designed to improve practices in the palm oil sector. Alongside advanced traceability protocols, this includes the introduction of a scorecard that will enable the company to work with certain direct suppliers of palm oil to improve their performance in areas such as human rights, deforestation, peat loss and land use policies.

PepsiCo has also tightened up its protocols regarding supplier conduct, which allow it to more thoroughly investigate claims of foul play.

Rob Meyers, Sustainability Director at PepsiCo, said: “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.

"We have made important progress, achieving substantially greater visibility into our suppliers' activities and moving closer to our goal of sustainably sourcing 100 percent 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."

Other highlights from the update include:

  • Currently, 16% of the palm oil that PepsiCo buys is RSPO (Roundtable for Sustainable Palm Oil) physically certified sustainable. The company expects that figure to rise to 30% by the end of 2017, and it aims to maintain a similar rate of progress to meet its 100% goal by 2020.
  • 98% of the palm oil that PepsiCo currently uses comes from suppliers who are RSPO members.
  • PepsiCo has begun to invest in the improvement of practices in key sourcing regions. For example, it is sponsoring the National Interpretation of the RSPO Principles and Criteria in Mexico and supporting a program that will provide training on High Conservation Value (HCV) and High Carbon Stock (HCS) assessments.

PepsiCo products are consumed one billion times a day in more than 200 countries and territories around the world. Last year the company generated approximately $63bn in net revenue, and is home to 22 $1bn brands.

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