Mars has tasted sweet success with its efforts to improve its internal environmental performance and is now turning its attention to tackling the sustainability challenges presented by its far-reaching global supply chains.
The company announced two major new green policies March 10, outlining a new sourcing charter designed to ensure all its suppliers are providing fully sustainable and traceable palm oil by 2015 — or have plans in place to do so — and setting out a strategy for addressing how its sourcing of beef, pulp and paper, and soy indirectly can contribute to deforestation.
The two plans follow last year's launch of a major clean energy investment program, conceived by executives after the company's bid to cut carbon emissions and its use of fossil fuels began to stall. "We're looking to build out a whole suite of policies across all materials and all issues," Barry Parkin, chief sustainability officer at Mars, told BusinessGreen. "[The deforestation and palm oil policies] are just another step in that effort, which you'll see us filling out over the next few years."
The new policies are set to cover land use, water use and social metrics such as human rights, Parkin revealed. Palm oil and deforestation are being tackled first because the company sees them as two of the most pressing challenges facing the multinational, he added.
Palm oil is a key constituent of a huge range of food products, but the drive for cheaper supplies has come at a cost. It is estimated that around 30,000 square miles of tropical forest have been cleared in the past 20 years to make room for palm oil plantations, spurring land grabs, forest fires and conflicts with indigenous communities, as well as releasing huge amounts of CO2 emissions.
The problem has sparked a major corporate response in recent years, with companies including Marks & Spencer, Kellogg's, Unilever and Walmart among more than 1,000 organizations to have signed up to the Roundtable on Sustainable Palm Oil (RSPO), a certification scheme that commits members to producing and sourcing palm oil products that meet a range of sustainability standards.
Mars is also a member of the group after realizing the scale of the problem "four or five years ago," Parkin said, and as of the end of 2013 the company purchases all of its palm oil from RSPO-certified sources. However, the policy announced March 10 aims to further strengthen the company's commitment to sourcing genuinely sustainable palm oil. "What happened through last year is we realized that wasn't enough and that deforestation was continuing at a rapid pace and we needed to do more," Parkin admitted. "So we looked again at the next step and realized we both needed to strengthen our policy so it covered more criteria than exists in the RSPO code and that we get full traceability so we know exactly where all our material comes from."
Consequently, Mars has developed its own sourcing charter outlining how the palm oil it purchases has to come from legal sources that are not in areas of high conservation value or high carbon stock forests, have not contributed to land cleared by burning and meet ethical business standards.
Mars expects all its suppliers to commit to complying with its new sourcing charter by the end of this year and to have plans in place to ensure their palm oil is fully sustainable and traceable against its standards by the end of 2015.
"That will get us to a very high level of confidence that we have a clean pipeline, but we wanted to go beyond that as well and think about what we could do to drive more change in the industry," Parkin added. "So by requiring our suppliers not only provide us with a clean supply of palm oil but also make similar commitments to the ones we're doing, we're hoping to drive wider change."
Meanwhile, the accompanying deforestation strategy commits Mars to sourcing beef, pulp and paper, and soy from similarly stringently regulated farms, plantations and ranches, with detailed supply chain policies for each commodity to be published by the end of the year. Parkin said the policies "will cover the lion's share of our impact on deforestation," although the company plans to apply the same conditions to all its agricultural raw materials in the longer term.
"I'm not sure it's super-complicated, but it's new territory for us," he admitted. "As we learn [how to embed traceability] in one material, we'll apply that to others. This doesn't mean we'll have the traceability of every material immediately, but on the high risk ones we absolutely will."
The ultimate goal is to ensure the company's operations have zero carbon impact by 2040 — "sustainable within a generation," as Parkin puts it — and further "exciting developments" in terms of clean energy and energy efficiency investment are set to be announced later this year as a further step toward this target.
Parkin said that the efforts of Mars, as well as those from other sustainability leaders such as Unilever, Proctor & Gamble, Nestlé and Ferrero, show "the value chain is really starting to get its act together now" and in many cases overcoming long-standing rivalries to drive the whole food and drink sector forward.
"We're looking to build partnerships with other food companies, as well as down the value chain, to drive this further," he admitted. "These are world issues, not competitive issues, and you have to collaborate to reach the scale needed to make progress. Palm is a great example of that. A year or two ago you might have been pretty despondent about the change that could happen in palm oil, but now I think you'd be a lot more positive. There's a real momentum — with more and more companies making powerful commitments — and alignment about what it's going to take to change the industry."
All of which means you can increasingly eat that chocolate bar without too much guilt — in terms of environmental impact, at least.