Outcome: Successfully withdrawn subject to the company’s commitment to responsibly source palm oil materials that are free of deforestation and human rights impacts.
Whereas: Palm oil is a commodity that has attracted high profile scrutiny for its role in deforestation and human rights abuses. Palm oil is the leading driver of deforestation in Indonesia and Malaysia, where 85% of palm oil is grown. Deforestation is of global importance, accounting for approximately 15% of greenhouse gas emissions, more than the entire transportation sector. The GHG emissions generated by record breaking forest fires in Indonesia this year exceeded the average daily emissions from all U.S. economic activity and caused at least 19 deaths. Child and forced labor are commonly used in palm oil production, according to the U.S. Department of Labor and recently publicized in the Wall Street Journal.
Church & Dwight (CHD) is committed to sourcing palm oil and derivatives “from suppliers who support the production of sustainable palm oil and are themselves committed to sourcing 100% of the palm oil they supply from RSPO-certified mills by 2016.” The company agreed to report progress on its’ website. However, there has been no update since 2013 and the company has yet to disclose the type of certified sustainable palm oil it is purchasing, or provide independent verification of its’ traceability.
Purchasing from RSPO-certified mills alone does not ensure that CHD’s palm oil has not contributed to deforestation or human rights abuses. The RSPO principles and criteria do not mandate protection of High Carbon Stock (HCS) forests or peatlands, two carbon-rich forest ecosystems that are commonly cleared for palm oil cultivation. WWF, one of the founding organizations of the RSPO recently stated: “…it is, unfortunately, no longer possible for producers or users of palm oil to ensure that they are acting responsibly simply by producing or using Certified Sustainable Palm Oil (CSPO).”
Recognizing the shortcomings of the RSPO, many of CHD’s competitors, including Colgate-Palmolive, Procter & Gamble, L’Oréal, and Reckitt Benckiser, have committed to source palm oil that goes beyond RSPO certification, containing explicit protections for all forest types and assurance of human rights protection. These companies have been recognized as industry leaders by the Union of Concerned Scientists.
Resolved: Shareholders request annual disclosure, at reasonable cost and omitting proprietary information, providing metrics and key performance indicators demonstrating the extent to which CHD is curtailing the actual impact of its palm oil supply chain on deforestation and human rights, beyond merely purchasing palm oil from RSPO certified suppliers.
Supporting Statement: Proponents believe a meaningful response to this proposal could include, among other company responses:
• An enhanced policy committed to “no deforestation, no peat, no exploitation”;
• A commitment to no burning to clear land for palm production;
• Percentage of palm oil traceable to suppliers and verified by credible third parties as not engaged in (1) physical expansion into peatlands, HCV or HCS forests, or (2) human rights abuses such as child or forced labor;
• Free Prior and Informed Consent (FPIC) of local communities;
• A time-bound plan for 100% sourcing consistent with those criteria.