Mars delivers deforestation-free palm oil supply chain

07 Oct 2020 --- Mars has revealed that its Palm Positive Plan has delivered a deforestation-free palm oil supply chain. This is hailed as a “significant milestone” in the confectionery giant’s strategy to tackle deforestation and advance respect for human rights. The move comes as consumers increasingly demand that global businesses take bold and firm action to build a better, more equitable society and to address the systemic vulnerabilities and inequalities exposed by the COVID-19 pandemic.

The announcement is a result of Mars’ ambitious Palm Positive Plan launched last September. The company believes a transformational approach will be critical in helping to tackle global environmental and social challenges.

Under Palm Positive, Mars has radically reduced the number of mills it sources from, awarding longer-term contracts only to suppliers who can commit to its environmental, social and ethical expectations.

Through its supply chain simplification, Mars is taking its mill count from 1,500 to fewer than 100 by 2021 and is on the path to further halve that in 2022.

“Supply chains – the engines behind global business – are broken. The pandemic has made this even clearer, highlighting the systemic vulnerabilities impacting supply chain communities and health of our planet as well as the urgent need for business to transform buying and supply strategies and practices. Business as usual will not drive the transformational change that's needed,” says Grant Reid, Mars CEO.

“Business can, and must, be powerful change agents for social and environmental change in order to have resilient, reliable supply chains and a more equitable and sustainable world,” he adds.

This announcement also closely follows the US Custom and Border Protection (CBP) banning all palm oil and palm oil products manufactured by Malaysian producer FGV Holdings Berhad. The restrictions came into force last following a year-long investigation that revealed indicators of forced labor and abuse. 

Creating transparent supply chains
Barry Parkin, chief procurement and sustainability officer at Mars, believes the transformation of the company’s palm supply chain can be a blueprint and catalyst for sector-wide changes.

“For years, businesses have grappled with complex and opaque palm supply chains. It is now clear that this has not been enough to guarantee no deforestation or human rights issues. By radically simplifying our palm supply chain, partnering with a smaller cohort of suppliers and rigorously applying the three M's of Mapping, Management and Monitoring we can eliminate deforestation and advance respect for human rights,” he says. 

"We have reached a significant milestone – but in order to extend this impact beyond our own supply, we are asking our suppliers that they apply these principles to all the palm oil that they source, not just the material they supply to us. Through this action, and if adopted by others, we can reach a tipping point to drive systemic change across the entire palm industry,” he continues.

Mars uses satellite mapping to monitor land-use with third-party validation through its partnership with Earth Equalizer/Aidenvironment and this enables Mars to take evidence-based action to simplify and select the suppliers and mills it sources from.

One example is in its supply chain to its Asia-Pacific businesses, where Mars is now sourcing from UniFuji – a partnership between United Plantations and Fuji Oil - which has reduced operations from 780 mills to just one. 

This has been achieved through a 1:1:1 model – which means that palm is grown on one plantation, processed through one mill and one refinery before reaching Mars.

Mars and UniFuji source in ways that are both good for people and the environment and has become the model upon which Mars has built its simplified supply chain, region by region, around the world. 

Simplified supply chain and increased collaboration
This simplified supply chain has allowed for long-term engagement on human rights between Mars and its suppliers. In 2017, Mars engaged with its global human rights partner Verité and supplier Wilmar to explore how businesses across the palm oil supply chain can better understand, address and prevent human rights risks. 

The resulting case study of its collective findings was just published, and through this collaboration, Mars is supporting the creation of an open-source set of resources to aid companies to manage human rights issues in extended palm oil supply chains.

Tesco more than doubled delivery capacity to 1.5 million slots a week during the first half of the year, including serving 674,000 customers.The business is also working to support smallholder farmers in frontier landscapes through active membership and funding of Earthworm Foundation’s Landscape Programme in Aceh to help form community-based conservation plans, build smallholder capabilities and provide alternative livelihoods. 

In 2018, Mars co-created the Coalition for Sustainable Livelihoods with Conservation International and other organizations. 

The Palm Positive Plan also builds on Mars’ work with the Consumer Goods Forum to drive its theory of change, focusing on driving systemic change through supply chain management and expanding influence beyond its own supply. It comes as part of the business’ US$1 billion Sustainable in a Generation Plan. Within this, Mars is working to stop deforestation and degradation in five raw materials identified as having the greatest risks for driving deforestation: beef, cocoa, palm oil, pulp and paper, and soy. 

“I applaud the progress Mars has made in achieving zero deforestation in its palm supply chain. It is a testament to the hard work and dedication of the company over the last ten years and we need to see more companies embrace the logic of the three M model – map, manage, monitor – that they have laid out,” adds Justin Adams, Executive Director of the Tropical Forest Alliance.

“But Mars’ success today also highlights the limits of individual leadership. We can only stop deforestation by working collectively in key production landscapes and across the entire sector. I am encouraged by their commitment to collective action both in landscapes and to the work of the Forest Positive Coalition under the Consumer Goods Forum.”

Edited by Gaynor Selby