Panera Bread Co. Sustainability Report 2014
|Company||Panera Bread Company|
|Filer||Franciscan Sisters of Perpetual Adoration|
|Sector||Food and Beverage|
|Subject(s)||Forests; Palm Oil|
|Resolved Clause Summary||Adopt a sustainable palm oil sourcing policy|
Approximately 90% of palm oil is grown in Indonesia and Malaysia. This has led to significant deforestation. Such deforestation and conversion of carbon-rich peatlands contributed to the World Bank ranking Indonesia as the 3rd largest global emitter of greenhouse gases (GHGs). Peatland and forest conversion accounts for more than half of Indonesia’s GHG emissions. Palm oil plantations that are not sustainably developed and managed have devastated habitats of endangered species, such as the orangutan, and cause massive biodiversity loss.
The U.S. Department of Labor lists the palm oil industry as notorious for using child and forced labor. In the Philippines it is estimated almost 25% of palm oil production is linked to child labor. A July, 2013 Bloomberg Businessweek exposé documented detailed evidence of slavery on palm plantations by a company that sells palm oil to some of America’s largest palm oil importers.
To address these social and environmental concerns associated with palm oil production, the Roundtable on Sustainable Palm Oil (RSPO) was formed in 2004. Many companies, including some of our company’s competitors, such as Starbucks have committed to source 100% certified sustainable palm oil (CSPO) by 2015 or sooner. CSPO is readily available. According to the RSPO website, the supply of CSPO exceeds demand by approximately 50%.
Shareholders are concerned that, absent a comprehensive policy and transparent management system for tracing sourced palm oil to legally licensed suppliers verified as not contributing to deforestation or human rights abuses, Panera may be exposed to significant brand and reputational risks related to its supply chain impacts. Major companies such as Nestle and Unilever have pledged to develop such traceable, deforestation-free palm oil supply chains. This raises the bar for all companies, heightening the risk of inaction to those failing to take responsibility for their supply chain impacts.
Resolved: Shareholders request that Panera Bread adopt, implement and monitor a comprehensive sustainable palm oil sourcing policy. This policy should be communicated publicly within six months of the annual meeting.
Supporting Statement: We recommend the palm oil sourcing policy include goals to:
- source 100% CSPO (or derivatives, where feasible) through a certification program at least as rigorous as RSPO’s by 2015;
- trace the supply chain from the grower level (where feasible) to understand potential risks and impacts;
- source all palm oil from plantations which have independent verification they have not contributed to the degradation of peatlands, High Carbon Stock forests or High Conservation Value areas;
- respect and support the United Nations’ Guiding Principles on Business and Human Rights, including no forced or child labor, slavery or human trafficking, and the protection of indigenous rights throughout our palm oil supply chain;
- avoid palm oil from plantations having significant conflicts related to land tenure.