Investor Presentaiton
Ferrero Group
Sustainability Report 2022
Palm oil
Introduction
Our sustainability
progress
Our reporting
F
Palm oil has been used for human
nutrition for thousands of years and
provides a livelihood for millions of
people. Over 40 countries produce
palm oil, with Malaysia and
Indonesia together accounting for
around 85% of global production 13.
Palm oil plays a key role in our products,
enhancing the taste and texture of the other
ingredients throughout the product's shelf life.
It has an excellent yield compared with other
vegetable oils, and is an important contributor
to the livelihoods of farmers. In 2021/2214, we
sourced around 230,000 metric tonnes of palm
oil. This amount is around 0.3% of the world's
total palm oil production of about 77 million
tonnes 15. In 2015, we became one of the first
global companies to source 100% RSPO-
certified segregated palm oil. The segregation
model ensures sustainable palm oil is kept
separately from non-sustainable palm oil all
the way along the supply chain from the
plantations and farms.
A challenging context
Palm oil production has been associated with
negative impacts on biodiversity, as if not
sourced sustainably it contributes significantly
to changes in land use, and the use of
chemicals in tropical forests and other
species-rich habitats. Tropical natural forests
hold large stores of carbon and function as
biodiversity habitats; when these forests are
cleared, known as deforestation, the carbon is
released and the biodiversity is lost. It is often
difficult to trace palm oil to its source, bringing
challenges in tackling the social issues linked
to sourcing palm oil. Often, the land rights of
indigenous communities are not recognised,
and land clearance by palm oil companies can
displace rural farmers. Labour rights is another
issue, as workers often live in poor conditions
without access to basic facilities.
Our distinctive sourcing approach
Our palm oil sourcing and sustainability
approach is based on a few key principles,
including:
• Sourcing 100% RSPO-certified palm oil as
segregated 16 for Ferrero products, from a
limited number of reliable suppliers,
enabling us to trace our palm oil back to
plantation level, while working together
with our suppliers to implement
improvements and solutions.
• Building on this high level of traceability to
plantation level, monitoring our full palm
oil supply chain for deforestation with the
Starling satellite technology (covering over
1.3 million hectares of land).
• A Palm Oil Charter and a Supplier Code
with standards and requirements, which
are also based on Palm Oil Innovation
Group (POIG) requirements and
verification indicators and High Carbon
Stock Approach (HCSA).
Disclosing our palm oil supply chain, both
for our historical and acquired products.
Our Palm Oil Charter, updated in 2021, outlines
our ambition to achieve a palm oil industry that
is good for both people and nature by going
beyond high certification standards.
Through our Charter, we aim to be a driving
force behind a palm oil industry where
production creates value for all: where
smallholders and farming communities thrive;
where workers in mills, refineries and
plantations have rights that are unequivocally
respected; and where environmental values
are protected and enhanced through
sustainable agricultural practices.
Palm Oil Charter
Human rights and
social practices
Ferrero committed to
improved working
conditions across its
value chain
Workers with fair
recruitment, working
and living conditions
01
Environmental
The Charter is based on three pillars that apply
to all our palm oil suppliers, the three themes
being common to other Ferrero raw materials
and commodities.
13. Palm Oil Production » European Palm Oil Alliance
14. July 2021 to June 2022.
15. Palm Oil 2022 World Production: 77,429 (1000 MT)
(Updated 02/2023) Palm Oil Explorer (usda.gov)
16. RSPO Certified Palm Oil from different certified sources
that is kept separate from ordinary palm oil throughout
the supply chain.
02
protection/sustainability
Ferrero actively
monitoring and verifying
that its value chain is
deforestation-free
Satellite verification to
ensure zero deforestation
in our value chain
FERRERO
Supplier transparency
Ferrero achieving a fully
transparent value chain
Full traceability to
plantations, publication
of mills and estates list,
time bound Action Plan
and Progress reports
The three pillars are founded on a DUE DILIGENCE PROCESS which covers all Ferrero suppliers.
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