Kellogg’s commits to ‘environmentally appropriate’ palm oil
March 13, 2014
US multinational food producer Kellogg Co has agreed to buy palm oil only from suppliers who can prove they do not damage rain forests, reports Bloomberg.
US multinational food producer Kellogg Co has agreed to buy palm oil only from suppliers who can prove they do not damage rain forests, reports Bloomberg. Starting in 2016, palm oil will be sourced through supply chains that are deemed “environmentally appropriate”, states a new policy posted on the Battle Creek, Michigan-based company’s website. Suppliers must trace the oil to plantations that are independently verified as legally compliant, Kellogg’s chief sustainability officer Diane Holdorf said in an e-mail.
“Kellogg’s aggressive timeline for eliminating deforestation from its supply chain raises the bar for the entire industry and represents a tipping point in developing a responsible palm oil supply chain,” Lucia von Reusner, an activist for Boston-based Green Century Capital Management Inc, which filed a shareholder proposal asking for policy changes, said in an interview reported by Bloomberg.
Kellogg's produces cereal and convenience foods, including cookies, crackers, toaster pastries, cereal bars, fruit-flavoured snacks, frozen waffles and vegetarian foods. In May 2012, it acquired the Pringles potato crisp business from Procter & Gamble.
Along with Pringles, some of its other iconic brands include Pop Tarts and breakfast cereals Corn Flakes and Rice Krispies. Von Reusner ramped up pressure on Kellogg’s last August when she asked chief executive officer John Bryant what he planned to do about allegations that its partner, Singapore’s Wilmar International Ltd, had contributed to the destruction of rainforests, the Bloomberg report said. Green Century, which owns less than one percent of Kellogg stock, followed up with a shareholder resolution in November that it has since withdrawn.
“We take the whole area of sustainability of palm oil very seriously,” Bryant said in an interview in August, after von Reusner’s questions. “We buy sustainably sourced palm oil, and where it’s not available we buy the green certificates to cover it.”
Lobbying by Green Century and Kellogg prompted Wilmar to adopt a similar policy in December prohibiting palm oil development in carbon rich rainforests and peatlands, von Reusner said.
“We are pleased to see the progress Wilmar is also making in this area,” Holdorf said.
Green Century Capital said it was founded by non-profit environmental advocacy groups to invest in socially responsible companies, and profits help fund the groups’ priorities.
Green Century Capital holds Kellogg as part of a passive index fund, von Reusner said.