We are concerned about the palm oil supply chain and its impact on the environment, workers, and communities. Palm oil expansion has contributed to deforestation and climate change, as well as other negative impacts on biodiversity, endangered species, and the broader environment.
And despite being a highly productive crop that can offer a path out of poverty, unsustainable palm oil production practices can also threaten the rights of rural communities and indigenous peoples.
In 2010, we made a commitment to source 100% of our palm oil from responsible and sustainable sources. This goal was achieved in 2015 through the purchase of RSPO certified volumes and we have continued to maintain that performance year on year.
Since 2014, we have evolved our sustainable palm sourcing activities reflecting the need to enhance our response to the complex sustainability challenges facing the sector. This began with our first statement on sustainable palm sourcing (2014) and was followed by the introduction of an annual supplier engagement process designed to evaluate the progress of our direct palm suppliers in meeting the principles set out in our policy.
In this update to our Statement on Responsible Palm Oil Sourcing we wanted to take this opportunity to highlight to our stakeholders recent progress areas as we seek to deliver on our commitments. Highlights include:
- Updated Palm Oil Policy and Statement (2018)
- Consumer Goods Forum Forest Positive Coalition of Action
- Ongoing supplier engagement
- Status of RSPO certified volumes and traceability
- Enhanced supply chain transparency
- Internal Grievance Process & public tracker
- Smallholder program in Aceh Singkil region
1. Palm Oil Policy (2018)
Our 2018 updated statement on Palm Oil Sourcing strengthened the principles we expect of direct suppliers and ensured that they are in line with industry best-practice. Specific revisions to our policy and clarified expectations of our supply base include:
- Application of the integrated High Carbon Stock Approach (HCS)
- No burning for new plantations or replanting
- Progressive reductions of greenhouse gas emissions
- Compliance with the General Mills Supplier Code of Conduct and Policy on Human Rights
- Measures to ensure inclusion of smallholders in the supply chain
As of December 2020, 97% of our supplier volumes were covered by a public No deforestation, No peat and No exploitation (NDPE) policy aligned with our sourcing expectations.
Critically, General Mills is now more actively engaging its suppliers in direct review of their palm oil production and sourcing practices, more detail of which can be found in section 3.
2. Consumer Goods Forum (CGF) Forest Positive Coalition of Action
General Mills is a founding member of the CGF Forest Positive Coalition of Action, formally launched in September 2020, which requires member companies to collaboratively work towards a forest positive future, and proactively work with suppliers to mainstream deforestation free production across their business. Click here to view more on the Forest Positive Coalition of Action.
As part of our effort to advance progress here, General Mills has also joined the No-deforestation, No-peat and No-exploitation Implementation Reporting Framework (NDPE-IRF) active working group – a reporting tool designed to help companies understand and track progress in delivering NDPE commitments, including deforestation-free supply chains. We will publicly report progress in our palm volumes using the NDPE IRF tool in Q2 2021.
3. Supplier Engagement
General Mills’ most important mechanism to drive sustainability performance, and compliance with our policy commitments, is through engagement with our direct suppliers.
In 2017, with support from Proforest, General Mills began actively engaging its direct suppliers in review of their level of alignment with, and progress in implementing, our sustainable sourcing principles. The aim is to build an accurate picture of how our suppliers are performing and where there may be gaps or opportunities for improvement across our key sourcing principles. This information is then fed into our annual supplier review process.
We recently completed our 2020 supplier engagement process and scorecarding process. Key areas assessed include implementation progress, upstream supplier monitoring and verification, grievance management, transparency and reporting. We conduct this process annually and are working with our sourcing team to integrate with global supplier performance management standards.
Highlighted KPIs from our 2020 supplier scorecard include:
- 89% of our suppliers (by volume) have in place a timebound implementation plan for delivery of their NDPE policy commitments
- 78% of our volumes (by volume) have in place a Human Rights Due Diligence system
- 93% of our suppliers (by volume) have in place a comprehensive grievance mechanism and process
- 7 out of our 8 suppliers have in place deforestation monitoring systems, representing 89% of our palm volumes
Policy expectations – transparency and deforestation monitoring
General Mills’ expectations of its suppliers evolve over time in line with developments in our common understanding of what is needed to drive change in global palm oil supply chains. We periodically communicate these expectations to our direct suppliers as part of our engagement process.
- Mill lists: As noted below, we made public our global supplier mill list in 2018 and are pleased to see that 6/8 of our direct suppliers (representing 86% of our volumes) have done the same. Where they haven’t, or where we bring on new direct suppliers in the future, we will ensure that publicly available mill lists are a precondition of business with General Mills. Click HERE to view the complete list.
- Deforestation monitoring: General Mills asks our direct suppliers to cover all oil palm concessions in our supply base with deforestation monitoring systems and/or commitments to jointly develop those systems, and to similarly demand that all upstream suppliers make deforestation monitoring a requirement of trade. This is aligned with one of the workstreams of the CGF Coalition of Action. As of end 2020, 7/8 of our direct suppliers (representing 89% of our volumes) had confirmed deforestation monitoring systems in place.
4. Status of RSPO Certified Volumes and traceability
Our commitment to source 100% of our palm oil from responsible and sustainable sources was achieved in 2015 through the purchase of RSPO certified volumes. We have continued to maintain that performance year on year, including a purchasing shift toward mass balance and segregated oil and away from certificates.
Our aggregated purchasing volumes for 2019 are provided below. Mass balance and segregated volumes accounted for 98 percent of our 2019 purchases, and 99 percent of our palm oil volume was categorized as traceable to the extraction mill.
5. Enhanced Supply Chain Transparency
We agree that supply chain transparency across the sector is a necessary requirement for effective monitoring, and in 2018 we made public our global supplier mill list and will continue to update this on an annual basis.
We are pleased to see that the majority of our direct suppliers have done the same and, where they haven’t, we will continue to encourage them to do so. In addition, we declare our list of direct palm oil suppliers, updated annually, as part of our commitment to supply chain transparency.
General Mills global direct palm oil suppliers
(as of January, 2021)
Bunge Loders Croklaan
6. General Mills Grievance Process
In 2018, we received an increasing number of producer related grievances with alleged cases of non-compliance against our policy. To ensure the effective handling of these cases, we have introduced an internal grievance management system which reflects best-practice in handling grievances. Click HERE to view our public Palm Oil Grievance Tracker.
As a brand owner and manufacturer which is often many times removed from the producer, we expect our direct suppliers to robustly manage their own supply chains to ensure palm volumes supplied to General Mills meet or exceed our standards. In cases where there is verified non-compliance with our policy, or where there is continued failure to remediate verified non-compliances in a timely manner, we take steps to remove those producers from our supply chain.
In 2018, we demonstrated this in action when we instructed our suppliers to remove Indofoods and Salim Group companies from our supply chain following persistent and concerning social and environmental allegations, in addition to the previous confirmation that palm oil from REPSA is no longer in our supply chain as a result of divestment decisions previously made in line with our policy by relevant direct suppliers.
Supplier Performance Update
October 2020 – FGV Holdings Berhad
In light of US Customs and Border Patrol issuing a Withhold Release Order on palm oil from FGV Holdings, we are instructing our suppliers to remove palm originating from this company, from our supply chain. In response to the on-going grievance against this company (see grievance tracker), we had already engaged our direct suppliers to understand supply chain implications and potential pathways to remove this supplier, while maintaining 100% sustainable palm oil sourcing via RSPO certification.
January 2021 - Sime Darby Plantation Berhad
In light of US Customs and Border Patrol issuing a Withhold Release Order on palm oil from Sime Darby Plantation Berhad and its subsidiaries, joint ventures, and affiliated entities, we are instructing our suppliers to remove palm originating from this company from our supply chain. In addition, we ask for supplier plans to enter this case into grievance systems and to closely monitor moving forward, while maintaining 100% sustainable palm oil sourcing via RSPO certification.
7. Smallholder program in Aceh Singkil region
General Mills is collaborating with Musim Mas Group to launch a program designed to integrate independent smallholders from villages neighboring the Leuser Ecosystem in Aceh Singkil, Sumatra, Indonesia, into the sustainable palm oil supply chain to reduce deforestation by improving livelihoods.
We recognize the opportunity for industry investment at origin in partnership with key upstream suppliers to support smallholders in addressing environmental, social and economic challenges, and we are now putting this practice in the Aceh Singkil region. We are pleased to partner with Musim Mas to invest in a smallholder hub program focused on improving the economic security of smallholders and assisting smallholders on their journey towards sustainable production, through collaboration with local government. Investment from General Mills will support the hiring of village extension officers who will provide good agricultural practice, financial literacy and NDPE training and resources to smallholders. The first year of the program will aim to train 20 village and extension officers who will provide support to over 500 smallholders in high-priority villages.