{"id":10829,"date":"2016-11-04T02:04:33","date_gmt":"2016-11-04T06:04:33","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/nutellas-ingredients-to-climate-change-success\/"},"modified":"2016-11-04T02:09:05","modified_gmt":"2016-11-04T06:09:05","slug":"ferreros-ingredients-to-climate-change-success","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/ferreros-ingredients-to-climate-change-success\/","title":{"rendered":"Ferrero\u2019s ingredients to climate change success"},"content":{"rendered":"

Opening a jar of controversy<\/strong><\/p>\n

Nutella has long been known as a decadent delight enjoyed around the world. However, the Italian delicacy is inspiring guilt in consumers not only for its effect on the waistline, but its environmental impact.<\/p>\n

In mid-2015, French ecology minister, S\u00e9gol\u00e8ne Royal, ignited an international firestorm when she declared \u201cWe should stop eating Nutella, for example, because it\u2019s made with palm oil\u201d and that it should be made with \u201cother ingredients\u201d. [1] The comment generated an impassioned defense from Italians as well as Nutella\u2019s parent company, Ferrero, which issued a statement explaining the company sources its palm oil responsibly. The controversy concluded with a formal apology from Royal. [2]<\/p>\n

Digging deeper into the impact<\/strong><\/p>\n

Palm oil is the cheapest vegetable oil and is used to create the balanced taste profile and spreadable texture in Nutella. Nearly 85% of the oil is sourced from palm fruit in Indonesia and Malaysia. Demand for palm oil is expected to increase exponentially as global production rose from 14.5 million tons in 1990 to 67.3 million tons in 2013. [3] This explosive demand expedited widespread deforestation to replace forests with palm fruit plantations. [4] Scientists believe that deforestation, especially in tropical areas, contributes approximately 15-17% of global greenhouse gas emissions worldwide. This magnitude exceeds annual carbon emissions from all forms of transportation combined. [5]<\/p>\n

Exhibit:\u00a0Link between palm oil and deforestation [3]<\/em><\/p>\n

\"20161104-nutella-exhibit-v1\"<\/p>\n

Climate change impacted Ferrero by forcing the company to rethink how a key ingredient (palm oil) is sourced. Ferrero needed to assert a minimum standard on its suppliers, ensure that its palm oil is sourced responsibly, partner with other stakeholders (non-profits, communities, and governments) to mitigate the impact of deforestation, and communicate its actions clearly so consumers understood its stance on preventing climate change.<\/p>\n

 <\/p>\n

Spreading the word about actions taken<\/strong><\/p>\n

Ferrero has taken three key steps to address its palm oil production and limit its contribution to climate change. The company publishes a public report to consumers every six months about the progress toward its goals.
\n\u2022 In 2015, the Roundtable on Sustainable Palm Oil (RSPO) certified that 100% of Ferrero\u2019s palm oil is sustainable and segregated, ensuring a separation from non-sustainable palm oil and complete traceability to certified sustainable plantations. This announcement came one year ahead of schedule and concluded a nearly ten-year process. [6]
\n\u2022 In November 2013, Ferrero launched the Ferrero Palm Oil Charter in conjunction with the non-profit, The Forest Trust (TFT). This charter establishes ten standards to be implemented in the palm oil plantations that supply Ferrero. The criteria reflect principles that safeguard human rights in local communities and improve forest protection. The company worked with TFT to trace 99.5% Ferrero\u2019s palm oil supply to their original 63 mills and 301 plantations. With this new insight and traceability, Ferrero and TFT teams visited the most critical mills and plantations to communicate the Charter\u2019s principles, verify documentation, and establish a time-sensitive goal to address any issues. Ferrero will now develop its approach to verify and monitor compliance with agreements adopted in its one-on-one meetings with growers. [7]
\n\u2022 In November 2015, Ferrero joined the Palm Oil Innovation Group (POIG) which supports the RSPO by \u201ccreating innovations in the palm oil industry and the promotion of these innovations\u201d. Partner organization range from consumer players such as Danone to non-profits such as the World Wildlife Fund. [8]<\/p>\n

A taste that leaves many hungry for more<\/strong><\/p>\n

The standard set forth by the RSPO is too weak and there is more work to be done by Ferrero. Scott Poynton, founder of the NGO Forest Trust explains, \u201cTen years ago people sat around a table and came up with the lowest common denominator standard. That\u2019s rubbish.\u201d [9] This view is supported by the fact that industry-leading companies ranging from PepsiCo to Walmart to Starbucks called on the RSPO to increase its standards. Their complaint letter recommended the immediate adoption of standards that will conserve high carbon stock areas, protect peat, and set minimum traceability levels. In addition, they ask RSPO to improve its transparency by reporting on greenhouse gas emissions against reduction targets and improve its auditing capabilities. [10]<\/p>\n

Ferrero should take steps to ensure additional progress is made:
\n\u2022 Sign the letter to the RSPO to join the public call for increased palm oil standards
\n\u2022 Work with members of POIG to test and develop true innovations that will provide equally inexpensive and viable alternatives to palm oil
\n\u2022 Ensure compliance to Palm Oil Charter standards by auditing plantations on a more frequent basis and increasing the stakes or instituting penalties for not meeting the agreed-upon goals
\n\u2022 Provide reports to the public on the percentage of Ferrero\u2019s original source plantations that are complying with agreed upon goals<\/p>\n

By doing so, Ferrero will delight consumers and who will bring sweet success.<\/strong><\/p>\n

 <\/p>\n

Endnotes<\/strong><\/span><\/p>\n

[1] “Stop Eating Nutella and save the Forests, Urges French Ecology Minister.” The Guardian<\/i>. Guardian News and Media, 16 June 2015. Web. 04 Nov. 2016<\/p>\n

[2] Sola, Katie. “Italian Politicians Sent Into Sweet Rage By S\u00e9gol\u00e8ne Royal’s Comments About Nutella.” The Huffington Post<\/i>. TheHuffingtonPost.com, n.d. Web. 04 Nov. 2016.<\/p>\n

[3] http:\/\/www.ucsusa.org\/global_warming\/solutions\/stop-deforestation\/palm-oil-infographic.html<\/p>\n

[4] Kirchgaessner, Stephanie. “Nutella Spat: French Minister Says Sorry over Call to Stop Eating Spread.” The Guardian<\/i>. Guardian News and Media, 17 June 2015. Web. 04 Nov. 2016.<\/p>\n

[5] http:\/\/whatispalmoil.weebly.com\/the-palm-industrys-role-in-deforestation-and-climate-change.html<\/p>\n

[6] https:\/\/www.ferrero.com\/group-news\/ONLY-SUSTAINABLE-TRACEABLE-CERTIFIED-PALM-OIL-FOR-FERRERO<\/p>\n

[7] https:\/\/www.ferrerocsr.com\/news\/Ferrero%E2%80%99s-fourth-palm-oil-progress-report?lang=EN<\/p>\n

[8] http:\/\/poig.org\/<\/p>\n

[9] Mathiesen, Karl. “You’re Really Spoiling Us: Has Ferrero Been Wrongly Accused over Nutella?” The Guardian<\/i>. Guardian News and Media, 19 June 2015. Web. 04 Nov. 2016.<\/p>\n

[10] https:\/\/www.ceres.org\/files\/rspo-letter<\/p>\n

 <\/p>\n

Word count (excluding sources): 794<\/p>\n","protected":false},"excerpt":{"rendered":"

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