Is Staples right to reward Asia Pulp and Paper's forest pledge?
Any business targeted by Greenpeace for supporting deforestation in its supply chain will know the issue is not something to be taken lightly — the global campaign group has a habit of making life very difficult for organizations that refuse to tackle the problem.
When Ken publicly dumped Barbie via a billboard in Piccadilly Circus, Mattel quickly agreed to ditch paper supplier Asia Pulp and Paper (APP) to avoid accusations that it was fuelling deforestation and harming the habitats of sumatran tigers and orangutans. Nestle similarly quit palm oil supplier Sinar Mas after a devastating advert went viral, featuring an office worker chewing an orangutan's finger rather than a Nestle Kit-Kat.
But if the point of a Greenpeace stunt is to hit environmentally irresponsible companies where it hurts and ensure a commercial penalty for their green failures, at what point can those companies who do improve their record after being singled out by the NGO expect to see a commercial reward for their decision to do the right thing? If and when corporations do agree to clean up their act, at what point is it OK for the likes of Mattel and Nestle to start working with them again?
That is the question now facing a number of major consumer-facing companies, one year after APP finally switched off the bulldozers and claimed it was putting a stop to deforestation for good.
APP has admitted to a number of breaches to the moratorium during the past 12 months, but the very fact that it even has admitted the breaches can be seen as a positive move for a company that previously refused to accept it had a problem with deforestation.
In addition to halting logging in virgin forest areas, the Indonesia-based company is putting together plans to conserve the biodiversity and carbon stocks of its 2.6 million hectares of forests and has called on the Indonesian government to do more to tackle deforestation and corruption.
In response, stationary giant Staples has made a bold move in becoming the first high-profile company to start buying products from APP again, following a five-year gap and a visit to APP's concessions in Sumatra last year. BusinessGreen understands that a number of other companies are also reviewing their relationships with a view to potentially re-signing contracts with the pulp and paper giant.
"The decision to re-engage with APP was made after a careful review of APP's sustainability commitments and detailed conversations over many months with a variety of stakeholders," said Mark Buckley, vice president of environmental affairs of Staples. "APP senior leadership clearly understands that a long-term commitment to more sustainable practices is essential for them to succeed as a business."
He added that Staples would be actively monitoring APP's progress by working with green groups and independent observers such as Rainforest Alliance and Greenpeace, as well as having direct discussions with APP and The Forest Trust (TFT), which is helping APP implement its new policies.
But some green groups have accused Staples of jumping back into bed with APP too soon. The Rainforest Action Network (RAN) remains highly critical of APP's checkered past and is calling on consumers to write to Staples' chief executive, Ron Sargent, telling him to hold back.
"Given APP's track record of broken commitments and the fact that APP has yet to finish environmental studies, put forest conservation plans in place or get independent verification that they are actually working, Staples is jumping the gun by renewing business with APP," said Lafcadio Cortesi, Asia director at Rainforest Action Network in a statement. "Our experience suggests that companies are more motivated to undertake robust implementation of commitments if rewarding such implementation comes after, not before, it is carried out and independently verified."
For Greenpeace, the situation is not so black and white. Phil Aikman, forest campaigner at Greenpeace International, told BusinessGreen that Staples' new contract could create more pressure on APP to deliver on its environmental commitments. "Greenpeace's position is that, regardless of timing, if companies re-engage with APP it must be conditional on continued delivery of APP's forest conservation commitments," he said. "Our view is that the extra layer of scrutiny that responsible buyers bring is crucial in ensuring the longer-term delivery of APP's commitments."
Tony Juniper, co-founder of the Robertsbridge Group, also working with APP to implement its new sustainability policies, also believes Staples is right to undergo a tentative return to working with the company. Having worked closely with APP, he believes the company is strongly committed to its zero deforestation goal, although he accepts that some NGOs such as RAN may remain skeptical for some time.
He argued that the question of when it is appropriate for businesses to be rewarded commercially for environmentally responsible action should mark a turning point for the environmental community, which until now mainly has relied on aggressive campaigns to deliver change. "For the last 30 years we've got a lot of progress out of companies for punishing the bad ones, but it's been less easy to find ways of rewarding the good ones," he says. "I think we're now into a new phase — in the construction sector, paper and pulp, oil palm, consumer goods and retail — where there are companies that are trying to do something on this and it seems logical to me that we need to be rewarding the good ones as well as punishing the bad ones in order to accelerate the change."
In fact, he fears that a failure to reward those companies that change their ways potentially could result in a failed campaign and a return to environmentally damaging activity from some industries. "One of the worst things that could happen over the next five years in sustainability is that we get a group of companies who come out and say, 'We understand, we've got ambitious plans and we're going to go ahead and do this.' And then three or four years in, their shareholders say, 'Well, actually we're still being attacked in our market, we're spending a fortune and getting no reward for it,'" he argues. "What do we think the logical conclusion of that would be, especially for publically listed companies?"
Aida Greenbury, APP's managing director of sustainability and stakeholder engagement, welcomed Staples' decision to return as a buyer, following what she described as "extensive due diligence." (Hear more from her in the video below from the 2014 GreenBiz Forum.)
"We believe that extra scrutiny provided by customers will add significant value to our 'zero deforestation' commitments," she said. "It has been a year since the natural forest in our supply chain was protected under our Forest Conservation Policy. We are now undertaking a number of world-class biodiversity and social assessments to create a long-term sustainable plan. This is no small task, and we feel that market recognition has a key role to play in ensuring zero deforestation commitments such as this are supported. Such support will encourage other companies to adopt a similar approach. We have been in continuous dialogue with NGOs since the introduction of our policy and we will continue to consult with them over the coming months and years."
Meanwhile, as APP starts to reap the rewards from its commitment to bring an end to deforestation, another company is discovering how a failure to actively reduce supply chain impacts can have a major reputational impact.
Consumer products giant Proctor and Gamble (P&G) confirmed last week that it has begun a full investigation into its palm oil supply chain, after Greenpeace accused it of buying materials from companies linked to mass deforestation. P&G, which produces a wide range of household brands, such as Head & Shoulders and Pampers, has pledged to use 100 percent sustainably sourced palm oil by 2015 to use in its soaps, cosmetics and food. However, an investigation by Greenpeace found that less than 10 percent of the 462,000 tonnes of palm oil used by P&G in 2013 sustainably was sourced. It accused a number of P&G suppliers of using destructive techniques to clear the Indonesian rainforest, such as slash and burn.
Specifically, Greenpeace accused the BW Plantation Group of being linked to the death and burials of orangutans next to the Tanjung Puting National Park. Richard George, Greenpeace Forest Campaigner, urged P&G to clean up its act by stepping up its commitment to sustainably sourced palm oil. "Until they do, customers who care about forests, wildlife or our shared climate will rightly think twice before buying," he said.
A spokeswoman for P&G told BusinessGreen that it is investigating the claims. "We also agree that deforestation is a significant issue and take any allegation of impropriety by our suppliers very seriously," she said. "We have already begun a full investigation of all claims made in the report."
Like Staples, Mattel and Nestle, we all have to ask ourselves when a company's commitment to tackling the environmental impact of its supply chain is credible enough for us to reward them with our business.