FMCG giants forge ahead with forest risk reporting, but face calls to cut ties with palm oil suppliers

Image: Stock photo of workers in the palm oil supply chain

The Forum has today (22 September) published its second annual report tracking the progress of the Coalition, which was launched at Climate Week NYC in 2020. Its aim is to convene FMCG giants in working towards deforestation-free supply chains this decade and to ultimately target a net-positive impact on forests.

Members of the Coalition include Mars, PepsiCo, Procter & Gamble (P&G), Nestle, Colgate-Palmolive, Reckitt, Unilever, Essity, Danone, Sodexo, Tesco, Sainsbury’s, Walmart and Reckitt.

The report charts an uptick in the reporting of forest-related risks and impacts, with a 6% increase in collective disclosure rates year-on-year. All members are now reporting on at least 62% of the metrics outlined in the Coalition’s framework, which was developed with input from Proforest, CDP, AFI and WWF.

Metrics include the percentage of commodity supply from high-risk or high-priority deforestation regions and engagement with suppliers.

The report also highlights successes in collaboration, stating that the Coalition works with more than 200 stakeholder organisations from civil society, across the supply chain, production landscapes and governments.

All in all, the CGF’s managing director Wai-Chan Chan believes, the Coalition has “made great progress”.

Chan said: “We hope this report will inspire continued dialogue and accelerated action around the global challenge of deforestation, recognising both the positive steps our industry is taking as well as the road to forest positive that still lays before us.”

Friends of the Earth US challenge

The publication of the report comes just two days after the Consumer Goods Forum was sent a letter by Friends of the Earth US, imploring its members to immediately cease sourcing palm oil from Astra Agro Lestari (AAL), which produces the commodity in Indonesia.

Indonesia and Malaysia account for around 85% of the global palm oil supply. As demand for the commodity has risen so rapidly, land has been cleared and land use changed to make way for production. FMCG brands, along with animal feed producers and biofuel producers, are among the commodity’s primary buyers.

Friends of the Earth US, in partnership with Indonesian environmental advocacy group WALHI, published a report in March accusing AAL of illegal land-grabbing and deforestation. This is in spite of a zero deforestation commitment made back in 2015. Similar accusations have been levelled at AAL by Mighty Earth and Chain Reaction.

Now, the two NGOs are arguing that international frameworks like the OECD Guidelines for Multinational Enterprises, mandate that these consumer companies should step in to address instances where suppliers breach international deforestation and human rights principles.

WALHI’s head of campaigns Hadi Jatmiko said that if FMCG brands do not cut ties with AAL within three months, people will doubtless “infer that their commitments are really a sham” – especially given that the sector failed to meet deforestation goals with a 2020 deadline, set in 2010.

The letter calls on companies to not only end supplier contracts with those accused of deforestation, like AAL, but to provide redress to the impacted communities in line with the UN’s Guiding Principles on Business and Human Rights.

edie has contacted AAL for a comment.