Olam unveils new 'net-positive' supply chain policy

Multinational agri-business Olam has launched a new sustainability strategy which supports a 'net-positive' approach to supply chain and landscape management.

Olam's chief executive Sunny Verghese said the aim for a ‘net-positive’ impact towards the creation and restoration of natural and social capital would enable the company to operate a viable business

Olam's chief executive Sunny Verghese said the aim for a ‘net-positive’ impact towards the creation and restoration of natural and social capital would enable the company to operate a viable business

The Living Landscapes policy aims to “reimagine agriculture by putting back more into food and farming systems than is taken out”. The policy states that land use activities should deliver products while maintaining critical habitats, and also regenerating the natural capital of soil, water and natural ecosystems.

It sets out time-bound commitments for the net-positive framework to be applied in both Olam-controlled operations and its third-party sourcing network of more than four million small and large-scale farmers.

“Agriculture is at a tipping point,” Olam’s co-founder and chief executive Sunny Verghese said. “Unless we address the multiple environmental and social issues affecting our supply chains, our future volumes are at risk. We already have many policies and codes in place but we must now go beyond simply doing less harm, and instead aim for a ‘net-positive’ impact towards the creation and restoration of natural and social capital.

“We recognise that the publication of this policy is only the start of a challenging process where we will need to assess our own operations, influence a vast network of farmers beyond the reach of our direct sourcing, and still operate a viable business.”

Breaking new ground

Unacceptable land use practices for both Olam’s operations and third-party suppliers must be identified and eliminated if present, the policy states.

The firm has taken a strong stance on sustainable supply chain management. More than 65,000 smallholders are now registered on the Olam Farmer Information System to boost transparency in the supplier network.

Olam assisted in the launch of the Global Agri-business Alliance, a coalition of 36 businesses, to tackle environmental and social challenges affecting agricultural supply chains and rural communities worldwide.

The organisation has worked with the World Resources Institute (WRI) to identify high-risk mill and implement time-bound targets relating to palm oil. Olam reduced its palm oil supplier base from 48 in 2015 to 14 in 2016.

Welcoming Olam’s new ‘net-positive’ vision, WRI’s global director of forests Rod Taylor said: “While Olam will respect do-no-harm safeguards on human rights and natural habitats, it breaks new ground with its pledge to set targets for positive change in these landscapes, and track and report progress towards them.”

Agri-challenge

Agriculture faces the challenge of producing food and fibre for 9.5 billion people b 2050 while alleviating poverty, providing decent livelihood areas in rural areas and conserving natural habitats and biodiversity.

Land degradation is undermining the wellbeing of two-fifths of humanity, raising the risks of migration and conflict, according to a recent UN-backed report.

Last month, global agribusinesses were implored to improve the traceability of their soy and soybean supply chains, after a report linked food products sold in European supermarkets with severe deforestation cases in South America.

There are some encouraging supply chain developments in the food sector - global confectionery company Hershey recently committed $500m (£355m) to tackling child labour and links to deforestation in its supply chains.

George Ogleby


Tags

agriculture | supply chain | Corporate Social Responsibility

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CSR & ethics
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