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13 Jun 2024
5 min read

Our Work for Sustainable Palm Oil in Malaysia

At Ferrero, we’re proud to lead the way in sustainably and responsibly sourcing palm oil, a key ingredient used across our product range.

Over 40 countries produce palm oil, with Malaysia and Indonesia accounting for around 85% of global production. As one of our key regions for sourcing palm oil, we’ve instilled a number of sustainable practices across Malaysia, through local sustainability projects, partnerships, and research. From working to ensure the palm oil we use is deforestation free, through to supporting the improvement of working conditions at palm oil mills, we’re continuing to drive progress in this area. Here are some projects that have made an impact so far: 

Protecting wildlife

In 2020, we contributed to setting up TRAILS, an innovative and interdisciplinary research and development program based in Malaysia. The project aims to create landscapes where people and wildlife can coexist. It connects academics, NGOs, and private and public stakeholders so they can find integrated approaches to reforesting wildlife corridors – one of the key components in preserving biodiversity and climate resilience in fragmented plantation landscapes – while also tackling rural poverty. 

One aim is to involve local communities in preserving orangutan habitats within landscapes dominated by oil palm plantations. Another important project activity is to help local communities establish nurseries to produce tree seedlings for reforestation and oil palm systems. 

Responsible labour practices  

Since 2021, Ferrero has been working with Earthworm Foundation, a not-for-profit organisation focused on creating better supply chain conditions for people and nature, for supporting the adoption of responsible labour practices within Ferrero’s palm oil supply chain in Peninsular Malaysia. the implementation of this project we engaged two mills and two estates of one of our key third-party suppliers through two programmes. 

The first programme focused on supporting the adoption of labour practices to ensure fair, safe and decent working conditions for workers. The second programme focused on building the capacity to adopt and implement ethical recruitment practices.  

By the end of 2023, over 190 migrant workers were directly engaged. More than 4,000 workers, direct and subcontracted, have benefited from the project, and we are continuously assessing ways to scale it to benefit more stakeholders along our value chain, providing support where necessary.  

Promoting nature-based and biodiversity-friendly production practices 

When palm oil is not produced sustainably, harvesting methods can have a negative impact on biodiversity protection. 

Since 2021, we have been part of a pilot project led by the Sustainable Agriculture Network (SAN), a global collaborative impact network focused on helping farmers and rural communities thrive. In 2022, alongside SAN, we conducted research in palm oil smallholdings in Malaysia to better understand how native plant diversity can be an effective nature-based solution for suppressing insect pests. 

The research is part of a programme which encourages palm oil producers to adopt enhanced biodiversity conservation practices, establish habitats for beneficial insects, and reduce the usage of synthetic pesticides.  

The results identified the best-in-class native plant species to be propagated in the next stage of the project, and showed some of the plants which naturally grow under the oil palm canopy could be beneficial for insect populations. Each piece of research will inform the next phase of the programme, contributing to a growing body of knowledge on the benefits of agricultural biodiversity for producers, nature and society. 

Continued commitment across Malaysia 

With all of the above projects, as with our other work across Malaysia, our input is ongoing – and already next stages of progress are well on their way. The country’s palm oil production is vital to our business and through strategic partnerships and investment, we’re committed to improving the conditions under which it is produced and sourced. We’re currently ranked 2nd out of 285 global companies on the WWF’s Palm Oil Buyers Scorecard, and we’re dedicated to maintaining these high standards for a sustainable future.  

To know more about our latest sustainability report click here.

Ferrero began its journey in the small town of Alba in Piedmont, Italy, in 1946. Today, it is one of the world’s largest sweet-packaged food companies, with over 35 iconic brands sold in more than 170 countries. The Ferrero Group brings joy to people around the world with much-loved treats and snacks, including Nutella®, Kinder®, Tic Tac® and Ferrero Rocher®. More than 47,000 employees are passionate about helping people celebrate life's special moments. The Ferrero Group’s family culture, now in its third generation, is based on dedication to quality and excellence, heritage, and a commitment to the planet and communities in which we operate.