29-07-2016

Ferrero’s fifth palm oil progress report

Ferrero has always given the utmost importance to offering consumers products of the highest quality, freshness and food safety.

What’s more, our products contain carefully selected raw materials that respect both people and planet.
This is why in 2013 we launched the Ferrero Charter listing the key single topics to be managed, in order to secure a responsible palm oil supply chain.
In line with our consumers’ and employees’ values and expectations, this step was then followed by the certification of 100% of the palm oil contained in our products worldwide. This was achieved in January 2015 according to the RSPO Segregated supply chain.
However our engagement did not stop here.
Aware of the responsibility that comes with having leading global Brands, we are committed to leveraging this position to transform and innovate the palm oil industry.
Within this context, Ferrero’s membership with the POIG in November 2015 represented a natural step to carry out our commitments and actions on a credible and innovative platform. We, at Ferrero, share the POIG’s vision to “break the link between palm oil and deforestation, and human, land and labour rights violations.”(www.poig.org). In line with this vision we support the HCS Approach and the "Free and Fair Labor in Palm Oil Production: Principles and Implementation Guidance". Endorsed respectively in April 2015 and April 2016, both of these toolkits provide practical guidance for our suppliers in addressing our ‘no deforestation-no exploitation’ Charter requirements.
Since 2013, the partnership with TFT allows us to turn our commitments into grounded actions, such as conducting field visits in the plantations we source from.
Key to this progress is the continuous dialogue and engagement of our suppliers throughout the journey.
In December 2015 Ferrero achieved 99.5% traceability to the plantations, with TFT’s support.
Specifically, we recorded 63 mills and 301 plantations.
It has proved to be an extremely powerful tool because it enables us to determine the status of our action plan. In fact, by identifying the specific plantations we can monitor how our suppliers are implementing our requests and then engage them in improvement actions when gaps are detected.

However, this traceability achievement was threatened by the recent developments that have compelled Ferrero to largely revise its supply chain.
Ferrero indeed requires its suppliers to act consistently in a sustainable manner.
Even if unrelated to its supply chain, Ferrero considers it unacceptable if any supplier faces documented complaints, in contradiction with the values reflected in our Palm Oil Charter.
Suppliers unprepared to engage or address compliance issues will be cut out of Ferrero’s supply chain. They have to provide evidence of change through concrete actions to be reconsidered.
Ferrero has been managing this since early 2016, resulting in the suspension of its suppliers accounting for nearly 50% of its total palm oil volumes.
This meant that Ferrero has had to drastically modify its sourcing strategy to continue to ensure 100% RSPO certified Segregated palm oil, supplying more from existing, reliable suppliers and from new ones.

As the procurement situation gradually regains consistency, we will be updating the latest figures on traceability as soon as possible.
The new full list of plantations we source from will allow us to continue in verifying the suppliers’ compliance with our Charter requirements.

For more information:
Q&A Palm Oil
Q&A Palm Oil in Ferrero products