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Nestlé to blacklist palm oil suppliers not following sourcing rules

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Nestlé to blacklist palm oil suppliers not following sourcing rules

Nestlé SA plans to blacklist palm oil suppliers that do not follow its responsible sourcing guidelines aimed at preventing deforestation, the Financial Times reported Oct. 8, citing Benjamin Ware, the Swiss food giant's global head of responsible sourcing.

Starting in March 2019, Nestlé will put out a complete list of companies in its supply chain that specifies whether or not they are in compliance with the company's sourcing rules, according to the report. Noncompliant suppliers will be removed, which Ware told the newspaper was a move likely to "make a lot of enemies."

The food company already cut ties with 10 palm oil suppliers earlier this year, including South Korea's Posco Daewoo Corp., the U.K.'s Noble Group Ltd. and Indonesia's Korindo Group PT. Nestlé said on its website that the companies were blacklisted for failing to effectively manage deforestation risks or for missing specified deadlines on action plans for responsible palm oil sourcing.

In July, Nestlé submitted its own action plan to achieve sustainable palm oil by 2023, which allowed the company to be reinstated to the Roundtable on Sustainable Palm Oil, a not-for-profit group with members including food and beverage companies such as PepsiCo Inc., Kraft Heinz Co. and The J.M. Smucker Co.

The Swiss company also recently revealed that it will use satellite monitoring to check on operations of its worldwide supply chains for palm oil, a versatile vegetable oil used in an array of food and other consumer goods products.