Ferrero’s new Charter, which was developed with Earthworm Foundation, a non-profit organisation focused on positively improving value chains.
As a baseline, Ferrero sources sustainable palm oil that is 100% RSPO (Roundtable on Sustainable Palm Oil) Certified Segregated and traceable back to plantations: a goal initially reached in 2015, becoming one of the first global companies to do so. Ferrero’s approach towards responsible sourcing of palm oil goes beyond this high certification standard through active membership in POIG (Palm Oil Innovation Group) and HCSA (High Carbon Stock Approach), 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 intricate industry where environmental and social issues are oftentimes deeply rooted, complex, and interconnected:
1) Human Rights & Social Practices: In addition to requiring suppliers to take appropriate measures to prevent any form of exploitation, indecent living or working conditions, the firm is helping smallholders build resilience in the face of environmental and economic volatility through collaboration with local governments, NGOs and scientists.
2) Environmental Protection & Sustainability: Ferrero claims to be 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, the firm 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, it uses the Starling Satellite Monitoring System to identify potential deforestation in the roughly one million hectares of our supply chain.
3) Supplier transparency: Ferrero claims to foster a fully transparent, shared responsibility approach across the value chain, as well as requiring all suppliers to adhere to the Group’s standards. This is done by sharing the list of mills from which the firm sources its palm oil every six months. The company also publishes 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 the Group’s 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.
Marco Gonçalves, Ferrero’s chief procurement & hazelnut company officer said, “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. We look forward to continue our learning journey and go beyond high certification standards with concrete actions that contribute to a more sustainable industry.”
Bastien Sachet, Earthworm Foundation CEO added: “We welcome this updated charter for three reasons: Firstly, because it builds on a successful implementation of previous commitments and therefore it associates words to action. 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 minimise 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 25th 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. 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,” said Francesco Tramontin, vice-president, Ferrero Group Public Policy Center and EU Institutional Affairs.
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