Improving the Status of Agricultural Biodiversity
through Private Sector Sustainable Sourcing
CONCEPT PRESENTATION - Danie...
Presentation Outline:
1.

Concept Background & Parameters

2.

Examples of Sustainable Sourcing Strategies

3.

Specific S...
Concept
Background &
Parameters
Sustainable Sourcing?
“…describes a sourcing exercise which goes beyond economic
considerations and takes into account env...
Private Sector?
Private sector is an extremely broad term in the food and
agriculture industry

Includes many different ac...
Example: Pepsi Sourcing in Context
India
“PepsiCo India contracts directly with 24,000 potato farmers. Most
of them have s...
Why Pursue Sustainable Sourcing in The Private Sector ?
1.

If the end goal is sustainable food systems…

2.

This will re...
Examples of
Sustainable
Sourcing
Strategies
Sustainable Sourcing: Research Questions
•

Q1: What strategies? (how did the company conceived its
sustainable sourcing a...
Companies Selected for the Sample…
Unilever
•

•
•
•

•

Q1:Sustainable sourcing program as part of the “Sustainable
Living Plan” – uses its internal Sustain...
Sourcing Technologies : The EIGER Tool Example
•

EIGER Tool - Exploiting Information on Global Environmental Risks – Agri...
Nestle
•

Q1: Specific Responsible Sourcing Guidelines/Action Plans

•

Q2: Priorities: timber, paper, palm oil, soya, coc...
Did you know about...
•

Industry collaborations and organizations enabling
efficient management of sustainable sourcing, ...
Danone
•

Q1: Respect Program – to “protect fundamental principles of
sustainable development” through their supply chain
...
Mars
•

•
•
•

•

Q1: Programme conceived around external certifications and
scientific research partners - focus on purch...
PepsiCo
•

Q1: Internal programme: Sustainable Farming Initiative (SFI)

•

Q2: SFI: potato, citrus, oats, rice, and corn
...
Specific Sourcing Comparison: Palm Oil
•

Unilever: “Sustainable Agriculture Programme”, 100% certified
traceable sources ...
Analysis and
Mapping of Current
Trends
General Trends : Sustainable Sourcing
•

Q1: Sustainable sourcing strategies are individualized, made specific to ingredie...
Mapping
COMPANY

PROGRAMME

PARTNERS/PLATF. CLASSIFICATION*

POSITIONING

UNILEVER

Sustainable Agriculture
Programme

SED...
Trends: Palm Oil
•

All selected companies members of Round Table on
Sustainable Palm Oil (RSPO)

•

Extent of strategy/po...
Mapping – Palm Oil
COMPANY

STRATEGY

GOAL

IMPLEMENTATION

STATUS

UNILEVER
(3% of world consumption)

Actions as part of...
Analysis
•

Lack of coherency across the industry about what are the metrics for sustainably
sourced agricultural products...
Agricultural
Biodiversity in
Sustainable
Sourcing?
ABD in Sustainable Sourcing?
•

Recap: the sustainable sourcing concept has been established
to increase responsibility an...
Existing Status of ABD in Sourcing?
1.

The management of ABD currently has a very low status in
private sector sustainabl...
Question….

Is there a case for making the
management of ABD a must in the
sustainable sourcing programmes of the
private ...
Point 1: ABD is Declining – Responsibility?
•

FAO (2004) notes that the
principle two causes of the loss of
ABD is:

1.

...
Point 2: ABD is Declining – Risk Management?
•

Climate change will mean less
predictable seasons and greater
risks for th...
Point 3: ABD is Being Promoted - Rewards ?
•

On the global development agenda, it is becoming increasingly
recognized tha...
Recommendations
& Future
Challenges
Entry Points for Improving ABD in Sourcing
1.

Inclusion of ABD indicators in the group
platforms like SAI and technologie...
Limitations and Challenges
•

Effectiveness of these industry initiatives on
sourcing/round tables (marketing versus real
...
Conclusions: The Three R’s
•

The sustainable sourcing concept is a big opportunity to
improve the status of ABD – many en...
Innovative Ideas?
For example:
An Agricultural Biodiversity Sustainable Sourcing Programme?
Action for Agricultural Biodiv...
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Improving the status of agricultural biodiversity through private sector sustainable sourcing

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Presentation given in November 2013 as part of a series of internal seminars given by the Nutrition and Marketing Diversity team at Bioversity International.

View the video of this presentation: http://youtu.be/pN5JMWQoHyM

For more information about Bioversity International research on diet diversity for food and nutrition, please visit our website: http://www.bioversityinternational.org/research-portfolio/diet-diversity/

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  • Image: http://www.bakeryandsnacks.com/Regulation-Safety/Kellogg-defends-JV-with-Wilmar-after-illegal-palm-oil-accusations
  • The presentation will start by defining the content parameters and justifying the topic.Next, some general summaries will be given which show examples of how sustainable sourcing strategies/policies can vary from company to company. Additionally, to provide a more specific point of comparison across the companies, the sourcing of palm oil will be presented.From this, the presentation will then map out the key trends around sustainable sourcing. The presentation will then turn to address the issue of declining agricultural biodiversity and why it should be of greater interest in the sustainable sourcing activities of the private sector. Based on the earlier analysis of trends, the presentation will conclude with some recommendations for how to improve the status of ABD in the food and agriculture industry.
  • Sustainable sourcing is not just about environmental considerations. Sustainable sourcing must consider all aspects of social and economic sustainability too – human rights, labor rights, working conditions, training and education, impacts on local communities and economies etc. However, for this project, only the environmental aspects of sustainable sourcing will be examined because it is in this area of a companies sourcing where issues of agricultural biodiversity should be considered when a company assesses the environmental practices of its suppliers in the value chain. Image 1 source: http://www.foodnavigator-usa.com/var/plain_site/storage/images/publications/food-beverage-nutrition/foodnavigator-usa.com/market/sourcing-affordable-segregated-sustainable-palm-oil-remains-extremely-difficult-in-the-us-says-cargill/6602367-1-eng-GB/Sourcing-affordable-segregated-sustainable-palm-oil-remains-extremely-difficult-in-the-US-says-Cargill_medium_vga.jpgImage 2: http://www.foodnavigator.com/var/plain_site/storage/images/publications/food-beverage-nutrition/foodnavigator.com/financial-industry/don-t-pass-the-buck-on-sustainable-sourcing-urges-expert/8286411-3-eng-GB/Don-t-pass-the-buck-on-sustainable-sourcing-urges-expert_strict_xxl.jpgImage 3: http://www.earthtimes.org/newsimage/mars-beats-year-certified-sustainable-cocoa-goals_1612.jpgDefinition source: http://sustainability.mycgforum.com/the-glossary/direct-access.html?sobi2Task=sobi2Details&catid=5&sobi2Id=9
  • Why target multinational food and beverage manufacturers and retailers? Corporate Social Responsibility has emerged because of several factors (strategic/value-based/pressure). One of the key factors motivating the private sector to be more responsible with how it does business is pressure from consumer demand. In theory, all actors should be responsible and accountable for their actions and in the value chain. However, because of the ‘upstream’ position of some actors, the leverage of CSR from consumer pressures may be less effective. Therefore, pressure from consumer demand is most strongly felt at the downstream stages.For example, how many consumers know who the traders, farmers and input providers are in the value chain where they buy their food from?
  • Source: http://www.pepsico.com/Purpose/Environmental-Sustainability/Responsible-SourcingImage: http://media2.intoday.in/btmt/images/stories/potato-reuters_505_092513021246.jpg
  • Why examine sustainable sourcing of multinational food and beverage companies? If we can improve the ‘sustainability’ of sourcing by multinational food and beverage companies this will be an important piece to solving the broader sustainable food system puzzle – i.e. along with changing consumer patterns of behavior. However, from Bioversity International’s perspective, sustainable food systems must include the sustainability of agricultural biodiversity. Therefore, pursuing sustainable sourcing that includes ABD programmes/requirements is one option we have to improving the status of ABD in the food industry.
  • In order to structure the review of the selected multinational food and beverage companies’ sustainable sourcing strategies, the following five questions were asked. Q1: What strategies? By strategy, this refers to how did the company conceived of its sustainable sourcing activities – did the company develop its sourcing guidelines internally or has it followed the industry or external references for sustainability?Q2: Which ingredients? There are perhaps hundreds of different agricultural ingredients that a multinational food company sources. This question looks to identify which ingredients get sustainable sourcing requirements applied and which don’t‘. Q3: What targets? This question is to find out what targets the company wants to achieve with its sustainable sourcing activities. Q4: How to be implemented? How is the company managing the sustainable sourcing activities? What is its verification system? Internal assessment or external bodies.Q5: What business reasons given? This questions looks to established the publically provided reasons or motivations behind the companies’ sustainable sourcing.
  • Q1: What strategies? Internally conceived as part of the wider Sustainable Living PlanQ2: Which ingredients?Ingredients prioritized to focus on 10 biggest in terms of the volume they buyQ3: What targets?By 2020 we will source 100% of our agricultural raw materials sustainably “Our aim is to ensure continued access to our key agricultural raw materials and communicate the value of sustainable sourcing to consumers and influence their buying habits.”Q4: How to be implemented?“Our sustainable sourcing programme relies on compliance with the Unilever Sustainable Agriculture Code, either through self-assessment and verification against the Code or through external certification standards that we recognise as equivalent to the Code, such as those of Rainforest Alliance or the RSPO.This Code applies to all our suppliers of agricultural raw materials, the farmers producing them and contractors working on farms. Suppliers must comply with the Code’s Scheme Rules, which detail external certification standards and self-verification methods. We published these Rules in 2012. Implementation Guides help farmers put our Code into practice. SAC supported by guidelines for farmers to implement codes and to clarify requirements: http://www.growingforthefuture.com/unileverimpguid/”EIGER tool - Exploiting Information on Global Environmental Risks – Agriculturewhich provides maps giving detailed information about agricultural raw materials, biodiversity, water, GDP and population.EIGER helps us to identify new supply chains and new supply routes to ensure a secure supply of raw materials over the long term. It identifies opportunities and risks posed by global environmental and social trends that we need to consider when making sourcing decisions.These include:New sourcing countries: where do crops grow best, now and in the future?Water vulnerability: which areas suffer water scarcity or will do so in the future? What is the irrigation water demand for our crops?Biodiversity impacts: are existing or new sites and supply chains close to or inside biodiversity conservation areas?Q5: What business reasons given? Sustainable sourcing helps us to manage a core business risk by ensuring security of supply for the long term.Given the scale of our footprint, sustainable agricultural sourcing is therefore a strategic priority for our business and brands.By sharing information about where products come from, we are also meeting emerging consumer needs. Lipton tea and Magnum ice cream’s Rainforest Alliance certification and the new Knorr soup labelling on sustainably grown tomatoes are leading the way.
  • Reference: http://www.unilever.com/aboutus/supplier/sustainablesourcing/tools/
  • Q1: What strategies?Responsible sourcing guidelines based around themes (i.e. RSG on deforestation) or key ingredients and guidelines established in partnerships (i.e. guidelines on sustainable palm oil in partnership with The Forest Trust) Q2: Which ingredients?Timber/paper, Palm Oil and Soya as the top 3 prioritiesIn 2010, we identified the first 12 priority categories to be covered by our Responsible Sourcing Traceability Programme, which seeks to ensure we can identify risk and assure responsible sourcing across key product areas back to the farm or feedstock. In 2010, we officially launched the Nescafé Plan and the Nestlé Cocoa Plan and we put in place Action Plans for palm oil and paper and board. In 2011, we launched Action Plans for soya, hazelnuts and natural vanilla. In 2012, we launched an Action Plan on soya and developed Responsible Sourcing Guidelines for fish and seafood, dairy, meat, poultry and eggs.Q3: What targets?Q4: How to be implemented?We recognise that to achieve ‘no deforestation’ we must work with all agents in the supply chain, from plantation owners, processors and suppliers all the way to the consumer. In 2009, we joined the Roundtable on Sustainable Palm Oil (RSPO). In 2010, we partnered with The Forest Trust (TFT) and established Responsible Sourcing Guidelines (RSGs) for Palm Oil (pdf, 188 Kb). In 2013, we achieved our commitment to purchasing 100% RSPO certified sustainable palm oil.Independent means of verifications and assessment against the principles of the RSG (i.e FSC, RSPO, auditing). Q5: What business reasons given? “This means consumers can trust the way our ingredients and materials are sourced before manufacturing begins”
  • ABOUT SEDEX:Sedex is a not for profit membership organisation dedicated to driving improvements in ethical and responsible business practices in global supply chains.As the largest collaborative platform for sharing ethical supply chain data, Sedex is an innovative and effective supply chain management solution, helping you to reduce risk, protect your company reputation and improve supply chain practices.Reference:http://www.sedexglobal.com/about-sedexABOUT SAI:The Sustainable Agriculture Initiative (SAI) Platform is the main food industry initiative supporting the development of sustainable agriculture worldwide.Image: http://www.pepsico.com/Purpose/Environmental-Sustainability/Responsible-Sourcing
  • Lack of publically available information about sustainable sourcing on websiteQ1: What strategies?Sustainable sourcing as apart of sustainable development but strategy appears to be one of follower of others in the industry/ follows SAI platoQ2: Which ingredients?Limited ingredients discussed in SS policies (only controversial ones that require public statements) – but may also be reflective of the different between product ranges. They do try to minimize their responsibility about palm oil by saying that “Danone is a relatively modest user of palm oil with 24.000 tons (less than 0,05% of worldwide production)” Q3: What targets?Danone has engaged in a strategy to “eliminate deforestation impacts from its supply-chain” as well as “reforestation program” by 2020The only main target it sets is regards to Palm Oil sourcing - (despite it’s claim its a “relatively modest user”)Q4: How to be implemented?Danone seems to be following the lead of others in the industry through the SAI platform and roundtables – implementing and managing sustainable sourcing requirements through these initiatives rather than managing it independentlyQ5: What business reasons given? Consumer demand
  • Q1: What strategies?While certification programs do not eliminate all the social and environmental problems prevalent in many supply chains, they strive to verify that raw materials are sourced in a way that benefits producers, their communities, the environment and the industry. We are working with our certification partners to make farmer productivity and profit more central to their standards and processes, and because they are able to reach larger numbers of farmers than we can alone. Our sourcing strategies involve additional elements such as scientific research and farmer training programs that, in partnership with others, will develop even better solutions. Our Vision for Change program for cocoa farmers in Côte d’Ivoire is one example.“the large volume we buy means we can use our purchasing power to push for more sustainable production methods. These include cocoa and rice.”Q2: Which ingredients?Priorities: cacao, Palm Oil, Rice, Tea, FishQ3: What targets?100 % of several key raw materials using more sustainable approachesQ4: How to be implemented?Our method of sourcing more sustainably differs depending on the raw material. To identify, measure and prioritize our supply chain impacts and determine the best method of sourcing, we are starting to apply the same rigorous, structured approach that we have used in our direct operations. We use expert knowledge, stakeholder feedback and techniques such as lifecycle analysis to identify where and how we can make the biggest difference. We focus our efforts on these areas, and support more general work on the sustainability of agricultural systems to help drive change where we have less influence.This process has helped us to identify ingredients where the large volume we buy means we can use our purchasing power to push for more sustainable production methods. These include cocoa and rice.We have set targets to source 100 percent of several key raw materials using more sustainable approaches, most often through independent certification programs such as the Rainforest Alliance, UTZ Certified, Fairtrade International and the Roundtable on Sustainable Palm Oil. We purchase large quantities of grains, sugars, dairy products and meats but do not yet have formal strategies for these ingredients. We are developing strategies internally, and working with partners, including The Sustainability Consortium, to identify sustainability hotspots among agricultural commodities.Q5: What business reasons given? “As a result, Mars will secure safe, reliable, sustainable supplies of high-quality raw materials, and suppliers will boost their incomes through increased yields and quality.As one of the world’s leading food companies, we recognize the need to demonstrate exemplary sourcing practices and commit to the protection of forests and biodiversity, minimizing the carbon footprint of our supply chain, and to respecting human and labor rights and boosting the availability and traceability of responsible supplies”
  • Q1: What strategies?In 2012, we launched our Sustainable Farming Initiative (SFI). The SFI is a comprehensive program with application to potato, citrus, oats, rice and corn crops and to growers of all sizes in developed, developing and emerging markets. It enables PepsiCo to measure the environmental and local economic impacts associated with our agricultural supply chain.Q2: Which ingredients?Prioritized ingredients are as listed above (only palm oil mentioned separately) Q3: What targets?No specific targets mentioned – but mentions that “We're working across our agricultural supply chain to ensure our practices are efficient and sustainable. Because agriculture is one of the biggest parts of our environmental footprint, we continually strive to improve our agricultural processes”Q4: How to be implemented?Third-party certifications (Rain Forest Alliance, GAP) and management through AIM-PROGRESS initiative, SEDEX and SAI(AIM initiative is a platform for companies to create detailed work plans and implement together as a group)Q5: What business reasons given? “As a leading food and beverage company, agriculture is central to our business. Because of the critical importance of growing crops to PepsiCo, we are working to incorporate in our operations the best thinking, practices and technology to support sustainable agriculture. In addition to increasing the resiliency of our supply chain, we are pursuing opportunities—often through stakeholder partnerships across the public, private, NGO, nonprofit and academic sectors—to reduce on-farm water use and GHG emissions as well as to improve to farmer livelihoods.
  • -11% of palm oil produced is sustainable(half of that is being bought)Unilever:-3% of world Palm Oil consumption-We will purchase all palm oil from certified sustainable sources by 2015.-We will purchase all palm oil sustainably from certified, traceable sources by 2020-Sustainable Agriculture Programme-Founding member of RSPOGreenPalm certification system The GreenPalm system enables RSPO -certified palm oil producers to register a quantity of their output with GreenPalm. Growers are awarded a GreenPalm certificate for each tonne of palm oil which has been sustainably produced and can sell the certificates via the GreenPalm trading system. This enables buyers to claim that they have supported the sustainable production of palm oil. The palm oil itself is sold, processed and purchased in the usual, non-segregated way.Traceable supplies > segregated supplies > sourcing from RSPO certified suppliers+palm oil kernel processing plant four areas: active membership of the RSPO, public commitment to source RSPO-certified sustainable palm oil, disclosure of volume of palm oil used/bought, and disclosure of how much of the palm oil they use is certified or is supporting sustainable production.NESTLE:-Palm Oil as part of “no deforestation commitment” (along with paper/cupboard and soya)-No deforestation commitment means their products are not to be associated with deforestation-Requires them to map their supply chain and assess suppliers against Responsible Sourcing Guidelines-In 2009 joined the RSPO-In 2010 partner with the Forest Trust to establish Guidelines for Responsible Sourcing of Palm Oil -In 2013, achieved goal of achieved commitment to purchasing 100% RSPO certified sustainable palm oilOur Guidelines ask our suppliers to source oil from plantations that:Are legally compliant Respect the “free, prior and informed consent” of local and indigenous communities Respect high conservation values (HCVs). Protect peat lands Protect high carbon stock forests, and Respect all other RSPO principles and criteria. By making explicit provisions for the protection of peat lands and high carbon stock forests that provide valuable carbon storage, we go beyond the Roundtable on Sustainable Palm Oil (RSPO) requirements to give more emphasis to the issue of deforestation, which is a leading cause of the loss of biodiversity and increased CO2 emissions. So far we are the only major food company to have taken such a step.Use RSPO as a means of verifications for most of their RSG Palm Oil requirements-Work with suppliers to build traceabilityDANONE:Danone will substitute palm oil with alternatives where appropriateDanone commits to purchase 100% of its palm oil needs from segregated CSPO (certified sustainable palm oil) sources by the end of 2014. To reach this target, Danone has set up a clear internal plan with milestones.Today, Danone is a member of the Roundtable on Sustainable Palm Oil (RSPO) and already sources 100% of its palm oil from suppliers who are RSPO members.MARSMember of the RSPOWe only source Palm Oil from RSPOMars Incorporated is committed to working towards 100% traceable sources of palm oil that are free of deforestation, expansion on carbon-rich peatlands, the violation of human and labor rights.PEPSI:PepsiCo is a member of the Roundtable on Sustainable Palm Oil (RSPO), which was founded in 2004 to increase the supply of sustainable palm oil products. Through the RSPO, we have committed to purchase exclusively 100 percent certified sustainable palm oil for our products by 2015
  • Q1: What strategies?Sustainability strategies are established because of three fundamental reasons:Strategic reasonsValue-based reasonsPressure Sustainable sourcing strategies are diverse, specific to ingredients and prioritized according to business interests.Strategies range from companies conceiving entire internal Sustainable Agriculture Programs with Sustainable Agriculture Codes and guidelines (Unilever) to companies issuing one paragraph policy statements on agricultural sourcing issues (Danone) Leaders (Unilever/Nestle) are making up their own strategies – others tend to follow industry initiatives or roundtablesThe leaders seem to be including Sustainable Sourcing as an integrated part of their wider corporate sustainability strategy (Unilever “Sustainable Living Plan” and Nestle “Creating Shared Value” – the others in the industry tend to present sustainable sourcing commitments as a result of pressure/consumer concerns.Q2: Which ingredients?Ingredients considered/prioritized for sustainable sourcing are those that companies buy in highest volumes – “top 3” or “top 3” or those that are in the consumer spotlight (i.e. Palm Oil or cacao). But for example, all use sugar, some have sustainable sourcing of sugar, some don’t mentioned it at all. Q3: What targets?Targets are ambitious – often claiming that within some years all the ingredients they source will be from sustainable agriculture. Such targets raise questions about what they define as sustainable agriculture. What are the metrics of this sustainable agriculture future? Q4: How to be implemented?Partnerships with certification bodies, platform and roundtablesQ5: What business reasons given?Consumer demand and security of supply seems to be the primary reasons why the selected companies are implementing sustainable sourcing strategies
  • *Classification = (reason for sustainable sourcing/management mechanism)Global Agricultural Practice (GAP) Sustainable Agriculture Certification (SAg Certification) – University of Maine: http://umaine.edu/sag/
  • -11% of palm oil produced is sustainable(half of that is being bought)Unilever:-3% of world Palm Oil consumption-We will purchase all palm oil from certified sustainable sources by 2015.-We will purchase all palm oil sustainably from certified, traceable sources by 2020-Sustainable Agriculture Programme-Founding member of RSPOGreenPalm certification system The GreenPalm system enables RSPO -certified palm oil producers to register a quantity of their output with GreenPalm. Growers are awarded a GreenPalm certificate for each tonne of palm oil which has been sustainably produced and can sell the certificates via the GreenPalm trading system. This enables buyers to claim that they have supported the sustainable production of palm oil. The palm oil itself is sold, processed and purchased in the usual, non-segregated way.Traceable supplies > segregated supplies > sourcing from RSPO certified suppliers+palm oil kernel processing plant four areas: active membership of the RSPO, public commitment to source RSPO-certified sustainable palm oil, disclosure of volume of palm oil used/bought, and disclosure of how much of the palm oil they use is certified or is supporting sustainable production.NESTLE:-Palm Oil as part of “no deforestation commitment” (along with paper/cupboard and soya)-No deforestation commitment means their products are not to be associated with deforestation-Requires them to map their supply chain and assess suppliers against Responsible Sourcing Guidelines-In 2009 joined the RSPO-In 2010 partner with the Forest Trust to establish Guidelines for Responsible Sourcing of Palm Oil -In 2013, achieved goal of achieved commitment to purchasing 100% RSPO certified sustainable palm oilOur Guidelines ask our suppliers to source oil from plantations that:Are legally compliant Respect the “free, prior and informed consent” of local and indigenous communities Respect high conservation values (HCVs). Protect peat lands Protect high carbon stock forests, and Respect all other RSPO principles and criteria. By making explicit provisions for the protection of peat lands and high carbon stock forests that provide valuable carbon storage, we go beyond the Roundtable on Sustainable Palm Oil (RSPO) requirements to give more emphasis to the issue of deforestation, which is a leading cause of the loss of biodiversity and increased CO2 emissions. So far we are the only major food company to have taken such a step.Use RSPO as a means of verifications for most of their RSG Palm Oil requirements-Work with suppliers to build traceabilityDANONE:Danone will substitute palm oil with alternatives where appropriateDanone commits to purchase 100% of its palm oil needs from segregated CSPO (certified sustainable palm oil) sources by the end of 2014. To reach this target, Danone has set up a clear internal plan with milestones.Today, Danone is a member of the Roundtable on Sustainable Palm Oil (RSPO) and already sources 100% of its palm oil from suppliers who are RSPO members.MARSMember of the RSPOWe only source Palm Oil from RSPOMars Incorporated is committed to working towards 100% traceable sources of palm oil that are free of deforestation, expansion on carbon-rich peatlands, the violation of human and labor rights.PEPSI:PepsiCo is a member of the Roundtable on Sustainable Palm Oil (RSPO), which was founded in 2004 to increase the supply of sustainable palm oil products. Through the RSPO, we have committed to purchase exclusively 100 percent certified sustainable palm oil for our products by 2015
  • SOME DEFITIONS:The Round Table on Sustainable Palm Oil (RSPO) RSPO certification options includeIn the 'Segregated' system, palm oil from certified mills is kept apart from conventional palm oil. Up until final refinery, all movements of certified oil are reported to UTZ Certified. Oil can be traced back to certified plantations. After refinery, third-party certification ensures the integrity of the chain. End users may label segregated oil 'RSPO-certified sustainable palm oil'.In the 'Mass Balance' system, palm oil from certified mills is mixed with conventional palm oil during transport and storage. Up until final refinery, movements of mixed oil are administratively monitored by UTZ Certified. Companies cannot sell more sustainable palm oil than they have purchased. Mass Balance oil can be labeled with the RSPO trademark and the tag 'Mixed', with a claim that says it 'contributed to the production of certified sustainable palm oil'.In the 'Book & Claim' system, palm oil from certified mills is handled together with conventional palm oil. In the chain, no movements or transactions are monitored. Producers sell GreenPalm certificates to end users directly; redeeming GreenPalm certificates gives end users the right to claim equivalent volumes of oil as having 'contributed to the production of RSPO-certified sustainable palm oil'.
  • -Biodiversity in sustainable sourcing of the reviewed private sector multinationals is almost always just considered in the sense of protecting biodiversity outside the farm-Some engagement with the topic:PEPSI:Biodiversity________________________________________We work to lessen the risks of biodiversity loss by maintaining healthy and balanced ecosystems. As a result, PepsiCo is engaging in industry- and farm-based initiatives to highlight the importance of ecosystem services. For example, as a member of the Sustainable Agriculture initiative platform, PepsiCo is working jointly to define the scope and suitable metrics to measure and improve biodiversity in arable crops to a recognized global standard. One example: in the U.S., we have improved waterfowl and wildlife habitat by placing select Gold Dust potato fields under a flood/fallow program. Biodiversity is also a key indicator for the Sustainable Agriculture (SAg) certification program.UNILEVER:I.e. Code on Biodiversity: “Crop and animal genetic diversity.Farms should be able to demonstrate the use of crop and animal varieties derived from a wide genetic base in order to reduce risks of pests and disease outbreaks, improve profitability and reduce the need for CPPs.”SAC: http://www.unilever.com/images/sd_Unilever_Sustainable_Agriculture_Code_2010_tcm13-216557.pdfUNILEVER Biodiversity Action PlanThe Unilever Sustainable Agriculture Code requires our suppliers or farmers to prepare a Biodiveristy Action Plan (BAP). We have prepared guidance that should be useful to all those who are preparing BAPs as it provides a standard, structured approach. However, to comply with the Code, it is not necessary to use this format. In many cases it will be easier for suppliers and farmers to prepare a BAP that aligns with local or national BAPs or formats used by local naturalists, nature reserves or consultants.MARS:Mars also supports efforts to increase yields of key crops such as cocoa through improved breeding and production techniques, reducing the need to clear forest for agricultural expansion. These efforts will not only reduce pressure on remaining natural forests, but also increase smallholder farmers’ incomes and improve livelihoods.
  • FAO:(http://www.fao.org/docrep/007/y5609e/y5609e02.htm)
  • Image: Emile’s Presentation
  • Improving the status of agricultural biodiversity through private sector sustainable sourcing

    1. 1. Improving the Status of Agricultural Biodiversity through Private Sector Sustainable Sourcing CONCEPT PRESENTATION - Daniel Salter, Nov. 2013
    2. 2. Presentation Outline: 1. Concept Background & Parameters 2. Examples of Sustainable Sourcing Strategies 3. Specific Sourcing Comparison : Palm Oil 4. Analysis and Mapping of Current Trends 5. Agricultural Biodiversity in Sustainable Sourcing? 6. Recommendations and Future Challenges
    3. 3. Concept Background & Parameters
    4. 4. Sustainable Sourcing? “…describes a sourcing exercise which goes beyond economic considerations and takes into account environmental, social and ethical factors as well.” (The Consumer Goods Forum, 2013) PROJECT SCOPE 1: Environmental factors of sourcing OBJECTIVE: To assess the current trends of sustainable sourcing in order to identify possible entry points to improve the status of agricultural biodiversity within these private sector sourcing strategies
    5. 5. Private Sector? Private sector is an extremely broad term in the food and agriculture industry Includes many different actors along the value chain… For example: R&D INPUTS FARMERS TRADERS MANUFACTURERS RETAIILERS PROJECT SCOPE 2: Multinational manufacturers and retailers with sourcing activities from developing countries JUSTIFICATION: These actors are consumer facing, increasing demand for accountability in value chains, potential leverage point for improving the status of agricultural biodiversity
    6. 6. Example: Pepsi Sourcing in Context India “PepsiCo India contracts directly with 24,000 potato farmers. Most of them have small holdings farms with less than three acres of land.” (Pepsico.com)
    7. 7. Why Pursue Sustainable Sourcing in The Private Sector ? 1. If the end goal is sustainable food systems… 2. This will require the private sector to play a critical role… 3. Sustainable sourcing strategies are one way of integrating sustainability requirements into private sector value chains.. 4. This integration should promote more sustainable patterns of production… 5. Creating more sustainable patterns of productions are half of the challenge for sustainable food systems* (*combined with promoting more sustainable patterns of consumption based activities)
    8. 8. Examples of Sustainable Sourcing Strategies
    9. 9. Sustainable Sourcing: Research Questions • Q1: What strategies? (how did the company conceived its sustainable sourcing activities, internal programme, external reference or initiative) • Q2: Which ingredients? (which ingredients are considered important to be assessed for sustainability? which aren‟t? why?) • Q3: What targets? (what is the current vision for the future of sustainable sourcing and sustainable agriculture?) • Q4: How to be implemented? (what management systems, processes are being employed?) • Q5: What business reasons given? (why does the company publicize its motivation for sustainable sourcing?)
    10. 10. Companies Selected for the Sample…
    11. 11. Unilever • • • • • Q1:Sustainable sourcing program as part of the “Sustainable Living Plan” – uses its internal Sustainable Agriculture Code to determine sustainability Q2: Top Priorities: palm oil, paper, soy, oils, tea, fruit, vegetables, cocoa, sugar Q3: Target: “By 2020 we will source 100% of our agricultural raw materials sustainably” Q4: SS programme which relies on compliance of suppliers to the code (self-assessments or external standards). EIGER tool* to determine long term sourcing decisions Q5: “Manage a core business risk..”, “emerging consumer needs”
    12. 12. Sourcing Technologies : The EIGER Tool Example • EIGER Tool - Exploiting Information on Global Environmental Risks – Agriculture • Provides maps giving detailed information about agricultural raw materials, biodiversity, water, GDP and population. • EIGER used by Unilever to identify new supply chains and make sourcing decisions such as: • New sourcing countries: where do crops grow best, now and in the future? • Water vulnerability: which areas suffer water scarcity or will do so in the future? What is the irrigation water demand for our crops? • Biodiversity impacts: are existing or new sites and supply chains close to or inside biodiversity conservation areas? • This is an example of the type of technologies starting to be developed that companies are using to make sourcing decisions against sustainability factors…
    13. 13. Nestle • Q1: Specific Responsible Sourcing Guidelines/Action Plans • Q2: Priorities: timber, paper, palm oil, soya, cocoa, coffee • Q3: “Our aim in responsible sourcing is to ensure that vendors work according to the same principles and values that we do ourselves” (specific goals i.e. 100% Soy RTRS). • Q4: Three Tiered Approach (T1-SEDEX, T2 - Traceability Program, T3 - Farmer Connect Program) Independent assessment by external standards • Q5: “This means consumers can trust the way our ingredients and materials are sourced before manufacturing begins”
    14. 14. Did you know about... • Industry collaborations and organizations enabling efficient management of sustainable sourcing, such as: • SEDEX • Sustainable Agriculture Initiative (SAI Platform) SAI: “Progress includes the development of Principles and Practices for sustainable agriculture in these areas and an industry aligned Farmer Self Assessment to help farmers assess and improve their sustainable agriculture practices”
    15. 15. Danone • Q1: Respect Program – to “protect fundamental principles of sustainable development” through their supply chain • Q2: Policies statements on paper and palm oil/program on sustainable milk • Q3: Lack of targets provided (only Palm Oil targets through RSPO commitments) • Q4: Follows platform/standards - partner in Sustainable Agriculture Initiative (SAI), member of RSPO • Q5: “Danone‟s priority is to respect consumers‟ choices”
    16. 16. Mars • • • • • Q1: Programme conceived around external certifications and scientific research partners - focus on purchasing power areas where it can have the most impact Q2: Priorities: cacao, palm oil, rice, tea, fish Q3: “100 % of several key raw materials using more sustainable approaches” Q4: Certification partner assessments and its ”structured approach” to assessment (UTZ, Fair Trade, Rain Forest A. RSPO, SEDEX) Q5: “secure safe, reliable, sustainable supplies of high-quality raw materials”, ”the need to demonstrate exemplary sourcing practices”, the need to boost supplier incomes
    17. 17. PepsiCo • Q1: Internal programme: Sustainable Farming Initiative (SFI) • Q2: SFI: potato, citrus, oats, rice, and corn • Q3: “..ensuring our practices are sustainable and efficient” • Q4: Third-party certifications - Global Good Agricultural Practice (GAP) – Supplier Management Program and AIMPROGRESS initiative, SEDEX platform, SAI • Q5: “resiliency of our supply”, opportunities for partnerships, also promotes inclusion in Dow Jones Sustainability Index because of sustainable sourcing practices
    18. 18. Specific Sourcing Comparison: Palm Oil • Unilever: “Sustainable Agriculture Programme”, 100% certified traceable sources by 2020, currently GreenPalm certification system (support SPO in non-segregated system), construction of their own palm oil processing plant • Nestle: “No deforestation commitment”, suppliers need to meet Nestle‟s internal guidelines which go beyond RSPO • Danone: Substitute where appropriate, 100% segregated CSPO by 2014, clear internal plan to reach target, RSPO member, already sources 100% of its palm oil from RSPO members • Mars: Only source from RSPO, working towards 100% traceable • Pepsico: Committed to sourcing 100% SPO by 2015
    19. 19. Analysis and Mapping of Current Trends
    20. 20. General Trends : Sustainable Sourcing • Q1: Sustainable sourcing strategies are individualized, made specific to ingredients and prioritized according to business interests • Q2: Ingredients considered/prioritized for sustainable sourcing are those that companies buy in highest volumes – “top 3” or “top 10” or those that are in the consumer spotlight (i.e. palm oil or cacao) • Q3: Targets are ambitious – often claiming that within a few years all the ingredients they source will be from sustainable agriculture. Such targets raise questions about what they define as sustainable agriculture. What are the metrics for this sustainable agriculture future? • Q4: Implementation/verifications mostly managed through external partners, platforms (most ambitious using internal assessment procedures i.e. Unilever). • Q5: Consumer demand and security of supply are the primary business reasons why the selected companies are implementing sustainable sourcing strategies (i.e. not scientific research or legal regulations)
    21. 21. Mapping COMPANY PROGRAMME PARTNERS/PLATF. CLASSIFICATION* POSITIONING UNILEVER Sustainable Agriculture Programme SEDEX AIM-PROGRESS GAP Certification SAg Certification (Uni. Maine) Consumer Goods Forum STRATEGIC/INTERNAL LEADER NESTLE Creating Shared Value UTZ Fair Trade SEDEX Consumer Goods Forum The Forest Trust SAI STRATEGIC/INTERNAL LEADER DANONE Respect Programme SAI PRESSURE/EXTERNAL FOLLOWER PEPSI Sustainable Farming Initiative SEDEX UTZ Rain Forest Alliance STRATEGIC/INTERNAL FOLLOWER MARS People, Planet, Performance GAP Certification SEDEX AIM-PROGRESS SAI PRESSURE/EXTERNAL FOLLOWER Table source
    22. 22. Trends: Palm Oil • All selected companies members of Round Table on Sustainable Palm Oil (RSPO) • Extent of strategy/policy information about what the company is doing with Palm oil depends on quantity consumed (level of involvement, greater the risk, more detailed strategy and management published) • Compared to other ingredients, RSPO has created greater standardization of sustainability requirements, targets and verification systems used for certifications
    23. 23. Mapping – Palm Oil COMPANY STRATEGY GOAL IMPLEMENTATION STATUS UNILEVER (3% of world consumption) Actions as part of the Sustainable Agriculture Programme + RSPO 2020: 100% certified segregated sources RSPO certifications + processing plant 2013: 100% through RSPO (3% seg and 97 % nonsegr) NESTLE (0.7% world consumption) Partnership with the Forest Trust to establish specific requirements for RSG + RSPO 2015: 100% certified segregated sources RSPO certification (except for peat land source which require independent assessment) + accept small holders with actions plans to become certified 2013: 100% through RSPO options (16% seg. 84% non-segr) DANONE (0.05% world consumption) Substitute palm oil with alternatives where appropriate + RSPO 2015: 100% certified segregated sources “clear internal plan and milestones” N/A (2011 goal was 100% RSPO options) PEPSI Convert to other oils + certification through RSPO 2015: 100% certified sustainable palm oil RSPO guidelines and assessment Some Mass Balance purchase of certified PO MARS Join + support RSPO Working towards 100% traceable sources of palm oil RSPO mass-balance system 2013: 50% sourced through RSPO Table source
    24. 24. Analysis • Lack of coherency across the industry about what are the metrics for sustainably sourced agricultural products – companies typically develop their own metrics and definitions.. • This acts like a „double edge sword‟ with some companies developing very comprehensive metrics for sustainable agriculture (i.e. Unilever), while others seem to present more basic standards to meet certification needs (i.e. Mars) • This results in different companies, applying different sustainability standards to different ingredients in different regions • However, in the case of palm oil, The Round Table has been an effective industrywide instrument to standardized sourcing activities to promote multi-sector consensus of sustainability requirements and practical solutions • Sustainable sourcing is becoming increasing important for risk management (changing consumer preferences, supply security, investor opportunities) • Group initiatives (i.e. Round Tables) and technologies (i.e. EIGER) are competitive points for companies and effective ways to bring the industry together on issues
    25. 25. Agricultural Biodiversity in Sustainable Sourcing?
    26. 26. ABD in Sustainable Sourcing? • Recap: the sustainable sourcing concept has been established to increase responsibility and accountability for sustainability issues, including natural resource management: • Natural resources that are currently high status: • Water resources • Soil/land resources • Energy resources/GHG…. • Pollution (pesticides)
    27. 27. Existing Status of ABD in Sourcing? 1. The management of ABD currently has a very low status in private sector sustainable sourcing 2. Protecting biodiversity perceived as only an off farm issue 3. However, some small cases of engagement with ABD: i.e. Unilever Sustainable Agriculture Code (p.22): - But, ABD requirements still recommended as only a Should not a Must
    28. 28. Question…. Is there a case for making the management of ABD a must in the sustainable sourcing programmes of the private sector?
    29. 29. Point 1: ABD is Declining – Responsibility? • FAO (2004) notes that the principle two causes of the loss of ABD is: 1. “The rapid expansion of industrial and Green Revolution agriculture 2. Globalizations of the food system and marketing” • Therefore, with the increasing sophistication of the sustainable sourcing concept, is it not time for the industry to take responsibility of this declining resource too?
    30. 30. Point 2: ABD is Declining – Risk Management? • Climate change will mean less predictable seasons and greater risks for the food and agriculture industry • One critical resource the industry will have to adapt to climate change is ABD resources • Protecting ABD, is a form of risk management because it means increasing options for agriculture production in the future If this is the pattern, is the industry setting itself up for fail?
    31. 31. Point 3: ABD is Being Promoted - Rewards ? • On the global development agenda, it is becoming increasingly recognized that greater ABD is important for a range of closely related sustainable development issues (food security, better health + nutrition, agriculture resiliency, ecosystem services etc.) • This need for greater ABD in the food system, should represent an opportunity to companies • Therefore, companies that contribute to this need should increasingly expect to be rewarded in terms of: • Political/policy incentives and consumer support…But.. • Such incentives need to be created - incentives that connect the current development dialogue with future business practices
    32. 32. Recommendations & Future Challenges
    33. 33. Entry Points for Improving ABD in Sourcing 1. Inclusion of ABD indicators in the group platforms like SAI and technologies and sourcing tools like EIGER 2. Proposal of ABD Action Plans within sourcing requirements by companies? (i.e. like the Biodiversity Action Plans required for sourcing with Unilever) 3. Create a round table on Sustainable Management of Agricultural Biodiversity? (What organization would possibly be suited to convened such a round table?) 4. Creating partnerships between scientific researchers and private sector sustainable sourcing standard setting departments/groups 5. Greater advocacy of the issue to the industry and into the consumer domain
    34. 34. Limitations and Challenges • Effectiveness of these industry initiatives on sourcing/round tables (marketing versus real impact/benefits?) – i.e. RSPO widely supported but still only 11% of palm oil is sustainable and only half of that is actually being purchased* • Conflict of interests between development goals? Achieving sustainable agriculture only to make nutritionally poor products? • Sustainable sourcing issues typically a consumer/market led process: is the relationship between agricultural biodiversityecosystems services-resiliency etc. too complex to gather mainstream status?
    35. 35. Conclusions: The Three R’s • The sustainable sourcing concept is a big opportunity to improve the status of ABD – many entry points, with potentially large impacts • BUT advocacy to include ABD in sourcing programmes is needed to take ABD outside of the scientific domain • Multi-sector dialogue and collaboration is needed to design sourcing programmes and supporting incentives that promote ABD • The critical three R‟s to leverage for creating dialogue and solutions are: Responsibility, Risk Management and Rewards • Focusing being open to innovation ideas….
    36. 36. Innovative Ideas? For example: An Agricultural Biodiversity Sustainable Sourcing Programme? Action for Agricultural Biodiversity (A4-AB) How do you think such a programme could work?

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