Dive Brief:
- PepsiCo released its Palm Oil Action Plan Progress Report last week in response to two separate, independent reports from the past year. The reports concern labor violations associated with palm oil plantations that PepsiCo’s joint venture partner Indofood owns and operates.
- In the progress report, PepsiCo outlined "a new commitment to intervene on suppliers found to be violating its policy in Indonesia, which is the frontline of palm oil expansion and human and labor rights violations in palm oil production," according to a news release from Rainforest Action Network.
- Corporate watchdog group SumOfUs issued a statement saying PepsiCo "can, and must do better." Katherine Tu, senior campaigner for SumOfUs, said in a statement that the company's progress report, "still fails to address the fundamental problems of rainforest destruction and the fact that workers across Southeast Asia, including children, are trapped in modern slavery in the production of palm oil."
Dive Insight:
Palm oil has been at the center of manufacturers' sustainability efforts in recent years, including Mars, General Mills, Post, Danone and Kellogg. Palm oil-related deforestation has led to extensive forest loss, which scientists argue contributes to global warming, destroys natural habitat, leaves endangered species without homes and depletes natural resources for communities that need them.
However, many of these companies have been acting proactively as more concerns arose regarding palm oil sourcing and its impact on the environment and local communities. Many of these companies made their palm oil commitments over the past few years, but PepsiCo is relatively late to the game.
PepsiCo appears to be more reactive to negative reports about its palm oil sourcing rather than proactive, and looks like it is responding to consumer sentiments about sustainability. This shows why many companies choose to get ahead of sustainability issues, rather than wait until an issue arises that could compromise the company's reputation — and sales.