Originally announced in 2013, the first Palm Oil Charter served as a driver for Ferrero’s development of its responsible palm oil supply chain, a public commitment that took into consideration the company’s core values and its broader sustainability strategy.
Ferrero further strengthens its commitments and progress through an updated charter, which has been elevated based on the company’s learning and insights generated by close collaboration with stakeholders at every level, from suppliers to NGOs and academic partners. The new charter has been developed with Earthworm Foundation, a non-profit organization focused on positively improving value chains.
As a baseline, Ferrero sources sustainable palm oil that is 100 percent Roundtable on Sustainable Palm Oil (RSPO) Certified Segregated and traceable back to plantations, a goal initially reached in 2015. Ferrero’s approach toward responsible sourcing of palm oil goes beyond this high certification standard through active membership in the Palm Oil Innovation Group (POIG) and High Carbon Stock Approach (HCSA), two of the highest value endorsement initiatives currently available for the industry.
As part of this approach, the new charter outlines further actions, tackling three strategic areas identified as critical in an industry where environmental and social issues are deeply rooted, comple, and interconnected:
1) Human Rights & Social Practices: Ferrero believes in building a more equitable and inclusive palm oil value chain, requiring suppliers to take appropriate measures to prevent any form of exploitation, indecent living or working conditions. The company is going beyond these essential rights by helping smallholders build resilience in the face of environmental and economic volatility – as well as improved working conditions – through the collaboration with local governments, NGOs and scientists. Ferrero also understands the importance of indigenous communities being fully engaged whenever agricultural land expansion may occur.
2) Environmental Protection & Sustainability: Ferrero is dedicated to having a palm oil value chain that not only respects the environment, but also becomes a positive driver to regenerate biodiversity, soils and water systems. Among the initiatives in this focus area, Ferrero commits to a “no-deforestation” supply chain which includes no planting on peat, no using fire to clear land, and ensuring the protection of forests and natural habitats. Going beyond this, Ferrero uses the Starling Satellite Monitoring System to identify potential deforestation in the roughly one million hectares of our supply chain.
3) Supplier transparency: Ferrero addresses the above issues by fostering a fully transparent, shared responsibility approach across the value chain, as well as requiring all suppliers to adhere to the company’s standards. Ferrero does this by sharing the list of mills from which it sources palm oil every six months; the latest lists related to the second half of 2020 can be found here. Ferrero goes beyond with actions such as publishing an action plan and a yearly progress report measured against the goals outlined in the charter, as well as offering an “Integrity Helpline” to confidentially signal any potential grievances or instances of non-compliance.
Moreover, following recent acquisitions, Ferrero has welcomed new products into its extended family and is currently working to integrate them into the supply chain by bringing them up to the company’s overall responsible palm oil sourcing standards.
“At Ferrero, we take a continuous improvement approach to our value chain and understand the environmental and societal challenges tied to the palm oil industry. This is why we proudly reaffirm our commitments to responsible palm oil sourcing through our new charter,” says Marco Gonçalves, Ferrero's chief procurement and hazelnut company officer. “We look forward to continuing our learning journey and going beyond high certification standards with concrete actions that contribute to a more sustainable industry.”
Earthworm Foundation CEO Bastien Sachet said the group welcomes Ferrero’s updated charter for three reasons.
“Firstly, because it builds on a successful implementation of previous commitments and therefore it associates words to action,” he says. “Secondly, Ferrero is demonstrating its commitment to driving environmental and social excellence linked to strong core values and long-term change. Finally, this charter will inspire other companies to raise their own bar, as collective leverage and action remains critical to scale impact beyond one company’s supply chain.”
Within this framework and looking towards the future, Ferrero welcomes the European Commission’s upcoming proposals on Mandatory Due Diligence and new legislation to minimize the risk of deforestation and forest degradation linked to products distributed throughout the European Union.
Ferrero believes that effective EU legislation is urgently needed to tackle these issues and establish a level playing field for more sustainable ingredients. In fact, through a public statement signed by more than 40 companies, on May 25, 2021, Ferrero extended support for an effective EU law that will address EU-driven global deforestation.
“Our new Palm Oil Charter is an example of Ferrero’s commitment and actions towards responsible palm oil sourcing,” said Francesco Tramontin, v.p., Ferrero Group Public Policy Center and EU Institutional Affairs. “But sector-wide change is needed. In this spirit, we believe that proper EU rules applicable to all relevant companies – coupled with the right cooperation framework with producing countries – can be a game-changer in driving palm oil supply chain systemic transformation, as well as preventing negative environmental and human rights impacts.”