Colgate-Palmolive Palm Oil 2012
|Subject(s)||Climate Change; Forests; Biodiversity; Palm Oil|
|Resolved Clause Summary||Palm oil sourcing|
|Status||Withdrawn; Company will address|
RESOLVED: Shareholders request that the Board of Directors adopt and implement a comprehensive sustainable palm oil policy that includes:
• a target date for sourcing 100% Certified Sustainable Palm Oil or for purchasing
GreenPalm certificates covering 100% of sourced palm oil,
• plans to verify suppliers’ compliance with the policy,
• supporting a moratorium on palm oil expansion in rainforests and peatlands, and
• commitment to disclose the company’s progress and its RSPO membership
Stockholder Supporting Statement:
According to Colgate-Palmolive’s web site, palm oil is an “important ingredient” for the Company. The web site also states “[o]ur palm oil is purchased as a commodity and the brokers periodically assert that as best can be determined, it is sourced legally and in accordance with that country's environmental standards“(Company web site). However, traceability is now feasible through use of the Roundtable on Sustainable Palm Oil (RSPO) external third party certification system. Colgate-Palmolive’s failure to procure certified palm is a brand risk, to both our Company’s reputation and long-term to the security of supply.
The environmental and social impacts of palm oil make it highly controversial. Approximately 85% of palm oil is grown in Indonesia and Malaysia, much of it on industrial plantations. According to the Union of Concerned Scientists, palm oil plantations are a large source of greenhouse gas emissions (GHGs) because they are often established on land converted from swamp forests (“The Root of the Problem: What’s Driving Palm Oil Today, Ucsusa.org, June 2011).
Due to high levels of continuing deforestation and the burning of peatlands in land clearance, Indonesia is now the 3rd largest emitter of GHGs globally. A 2010 report commissioned by Indonesia’s National Development Planning Agency found that the conversion of peatlands alone accounts for 50% of Indonesia’s GHG emissions but only 1% of GDP. (“Indonesian Government Report Recommends Moratorium on Peatlands Conversion,” Mongabay, January 19, 2010) Agricultural expansion, much of it for palm oil production, is likely to be better managed by using other land types than standing forest.
Palm oil plantations that are not sustainably managed have been shown to destroy habitats of endangered species, such as the orangutan (UNEP-WCMC.org). Consumers have demonstrated concern for orangutan welfare by campaigning against companies that have failed to source sustainable palm oil. Failure to manage the reputational risk of deforestation in supply chains has been disruptive for a number of high profile brands including Mattel and Nestle.
The RSPO was formed in 2004 to address the social and environmental concerns associated with palm oil production and promote sustainable palm oil products. Leading companies have committed to source only certified sustainable palm oil by 2015, including SC Johnson, Wal-Mart, General Mills, McDonalds, Mars, Nestle and Unilever. Although Colgate-Palmolive Company is a member of the RSPO, it has not made such a commitment and has failed to publicly engage key suppliers. We call on the company’s board to address the risks described above.