Organization: Sara Lee Corp.

Year: 2010

Description: WHEREAS: Palm oil is found in 50% of all consumer goods including foods and cosmetics.  The demand for palm oil in the United States has tripled in the last 5 years.
 
The production of palm oil is a significant source of greenhouse gas (GHG) emissions due to deforestation, degradation and conversion of peatland, and fires set for establishing plantations.
 
Tropical deforestation is responsible for 15-20% of annual global GHG emissions – more than the emissions from the entire U.S. transportation sector. Due to deforestation, Indonesia is now the 3rd largest emitter of GHGs (FT.com, March 2010).
 
Approximately 85% of palm oil is grown in Indonesia and Malaysia on industrial plantations that have severe impacts on the environment, local communities, and the climate.  98% of palm oil imported into the United States originates in Indonesia and Malaysia.
 
Over 20 million indigenous people and local populations depend directly on forests for their livelihoods.  These tropical rainforests also contain important biodiversity, and provide critical habitat to numerous highly endangered species.
 
Loss of the ecosystem services provided by forests is estimated to cost the global economy $2 - $5 trillion annually.
 
Regulatory initiatives and incentives to combat climate change and reduce GHG emissions have proliferated in recent years.  At the international level, countries are collaborating on policies relating to deforestation.  Indonesia has committed to reduce its emissions by 26% by 2020. 
 
The environmental and social impacts of palm oil make this product highly controversial.  The World Bank and its private lending arm, the International Finance Corporation, have announced a moratorium on new palm oil investments until the Bank develops a comprehensive strategy on palm oil development.
 
The Roundtable on Sustainable Palm Oil (RSPO) was formed in 2004 to promote the growth and use of sustainable oil palm products.  Unilever, Nestle, and Kraft have made public commitments to source only RSPO certified, fully-traceable palm oil by 2015.  They cancelled contracts with Indonesia’s biggest and most controversial palm oil producer Sinar Mas following reports that the company was violating Indonesian law and the Principles and Criteria of the RSPO.  France’s Group Casino pledged to remove palm oil from all its own branded food products, starting this year, and to use only certified sustainable palm oil in non-food products.
 
Many Sara Lee products contain palm oil or palm oil derivatives.  While our company’s sustainability report outlines a commitment to minimizing environmental and community impacts, it makes no mention of palm oil.  As a popular branded food and consumer products company, Sara Lee faces significant brand and reputational risk by sourcing palm oil that is not sustainably produced.
 
RESOLVED: Shareholders request that the board of directors adopt and implement a comprehensive procurement policy for sustainable palm oil by 2012.
 
Supporting Statement: We recommend the policy include sourcing palm oil from producers who comply with NGO certification programs such as RSPO’s or Rainforest Alliance’s, with the ultimate goal being segregating and tracing certified palm oil at all stages of the supply chain.