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Avon Palm Oil Sourcing 2011

Many of Avon’s most popular brands, including Anew, 1nark.TM and Skin S0 Soft, include products that contain palm oil or isopropyl palmitatc, which is often derived from palm oil. 
 
The environmental and Social impacts of palm oil make it highly controversial. Approximately 85% of palm oil is grown in Indonesia and Malaysia on industrial plantations that have severe impacts on the environment. According to the New York Times, a Study of practices at palm plantations in Malaysia and Indonesia found that rising demand for palm oil led to the clearing of huge tracts of rainforest. It also found that expansion of palm oil plantations often ted to the draining and burning of peatland. (“Once a Dream Fuel, Palm Oil May Be an Ec0­Nightmare.” 
January 31, 2007) 
 
Because of such practices, the production of palm oil is a significant source of greenhouse gas (GHG) emissions. Due to deforestation and the burning of peatlands driven in large part by palm oil production, Indonesia is now the 3rd largest emitter of GHGS in the World. A recent report commissioned by Indonesia’s National Development Planning Agency found that the conversion of peatlands alone accounts for 50 percent of lndonesia’s GHG emissions. (Mongabay.com, “Indonesian Govermnent Report Recommends Moratorium on Peatlands Conversion.” January 
19, 2010) 
 
lndonesia’s efforts to reduce its emissions include a two-year moratorium on forest and peatland conversions set to begin in 2011. (The Jakarta Post, “Forest Conversion Halt to Begin Next Year.” October l9, 2010) ln the meantime, the International Finance Corporation has announced 'a moratorium on new palm cil investments until a comprehensive strategy on palm oil development is in place. 
 
The Roundtable on Sustainable Palm Oil (RSPO) was formed in 2004 in an effort to address the social and environmental concerns associated with palm oil production and promote the growth and use of sustainable palm oil products. A number of leading multinational companies including Mars, Nestle and Unilever have now made public commitments to source only RSPO-certitied palm oil by 2015. 
 
As at popular personal products company with a strong commitment to corporate responsibility, including laudable commitments to protect forests and reduce GHG emissions, Avon could face reputational and supply 'chain risk from sourcing palm oil that is not sustainably produced. As 
 
Avon itself has noted, “In today’s increasingly complex, globalized World, an unwavering commitment to corporate responsibility is more important than ever and represents the hallmark of success in any industry.” 
 
RESOLVED: Shareholders request that the board of directors adopt and implement a comprehensive procurement policy for Sourcing 100% certified sustainable palm oil. 
 
SUPPORTING STATEMENT: We recommend that the policy include: 
 
° Segregation and tracing of RSPO-certified palm oil at all stages of the supply chain; 
° Support for a moratorium on deforestation from palm oil plantation expansion and a prohibition on sourcing from High Conservation Value Forests or peat lands', 
° Clear targets and timetables for implementation.