PepsiCo is a laggard company because its revised palm oil commitment lacks an ambitious deadline for cutting Conflict Palm Oil and it fails to apply at a company group level to all companies associated with its palm oil sourcing and product manufacturing, including its Joint Venture Partner (JVP) Indofood, which manufactures PepsiCo branded products in Indonesia. It is a matter of urgency that PepsiCo requires Indofood to halt the destruction of rainforests, peatlands and the abuse of human rights in order to continue its business partnership with the company.
Current Palm Oil Commitment (June 2018):
Has a commitment to source 100% physically RSPO-certified palm oil by 2020.
Has a commitment to source palm oil that is traceable to the plantation by 2020.
Requires that direct palm oil sources go beyond the inadequate standards of the Roundtable on Sustainable Palm Oil (RSPO) and end the destruction of rainforests, peatlands and abuse of human and labor rights, but does not require company-wide compliance of suppliers and business partners including its Joint Venture Partner Indofood.
Commits to proactively assess risk of non-compliance and take action including through its public grievance mechanism.
Commits to not allow forest or peatland conversion following a cutoff date of December 31, 2015, but outlines some exceptions.
Commits to provide effective remedy where PepsiCo has caused or contributed to adverse human rights impacts, in line with the UN Guiding Principles on Business and Human Rights.
Commits to implement a program of action with annual progress reporting and regular disclosures.
Weaknesses in Palm Oil Commitment:
Does not apply at a company group level to companies associated with its palm oil sourcing and product manufacturing, including its Joint Venture Partner (JVP) Indofood.
No assertive deadline for eliminating Conflict Palm Oil from all branded products and global operations.
No requirement for compliance across suppliers’ entire operations.
No requirement for independent verification of supplier compliance with responsible palm oil production practices, including no destruction of rainforests, peatlands or abuse of human and labor rights.
No published procedures to eliminate Conflict Palm Oil suppliers.
Public time-bound implementation plan lacks clear, time-bound performance-based milestones for achieving independently verified supply chains.
No requirement for public transparency from palm oil growers, refiners, and traders.
Ongoing sourcing from unknown plantations, high risk regions and high risk supplier Indofood.
Company products at extreme risk of contamination with Conflict Palm Oil.