Mars delivers on deforestation-free palm oil supply

The parent company of brands like M&M’s and Milky Way has achieved a significant milestone in its efforts to eliminate deforestation.

Through its Palm Positive Plan, which was launched in September 2019, Mars, Incorporated has dramatically reduced the number of mills it sources its palm oil from, by awarding longer term contracts to suppliers who commit to its environmental, social and ethical expectations.

Through this, Mars will take its mill count from 1,500 to fewer than 100 by 2021, and is on track to further halve that in 2022.

Mars uses satellite mapping to monitor land use with third-party validation and this enables Mars to take evidence-based action to 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.

Creating more transparent supply chains

Palm oil is used in more than half of the world’s packaged goods, across both food and personal care items – but its production is having catastrophic environmental and social impacts across Southeast Asia, Latin America and Africa. The development of plantations has come at the expense of lowland rainforests – some of the most species-rich areas on earth.

Mars says that, when produced sustainably, palm oil can deliver value through the entire supply chain.

“But the old way of doing things – buying the lowest cost commodities – just won’t do if we are to address and ultimately fix a broken supply chain.”

Through its Palm Positive Plan, Mars has committed to making, “long-lasting change for the environment, workers, smallholder farmers and economies where pal oil is sourced”.

Grant Reid, CEO at Mars, Incorporated, says that a transformational approach will be critical to driving change.

“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.

“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,” said Reid.

Driving sector-wide change

In September, Mondelēz, the parent company to Cadbury introduced a tighter range of regulations to enhance transparency across its palm oil supply chain, with the goal of eliminating deforestation.

Before that, Darrell Lea also announced that it would remove palm oil from all of its products, with all products in supermarkets anticipated to be palm oil free by November.

Barry Parkin, Chief Procurement and Sustainability Officer at Mars, believes the radical transformation of its 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. 

“The journey can’t stop here. We at Mars 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 says.

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