Organization: International Flavors & Fragrances Inc.

Year: 2015

Description:

Whereas

IFF uses palm oil in a number of its products. As the most widely used vegetable oil on earth, the environmental and social impacts of palm oil production make it highly controversial. An estimated 85% of palm oil is grown in Indonesia and Malaysia, where its production is a leading driver of deforestation. Primarily due to forest and peatland conversion for palm oil production, Indonesia was ranked the 3rd largest emitter of greenhouse gases globally. The palm oil industry, which is expanding rapidly into other countries, is also notorious for using child and forced labor, according to the U.S. Department of Labor.

While efforts to address these issues have been made, companies with palm oil sourcing policies similar to IFF’s have suffered strong public criticism related to deforestation, human rights abuses and orangutan extinction. Although IFF has a goal to source palm oil certified as sustainable by the Roundtable for Sustainable Palm Oil (RSPO), the RSPO is now widely recognized by key organizations, including founding member World Wildlife Fund, as insufficient for enforcing supplier compliance and preventing deforestation.

Many companies are now addressing these concerns. Palm oil purchasers and major suppliers have recently adopted robust and time-bound commitments to eliminate deforestation and human rights abuses from their palm oil supply chain and achieve full traceability. These commitments have been made by a group of over 20 consumer brands such as Procter & Gamble, Johnson & Johnson, L’Oreal, Unilever, Nestle, and palm oil suppliers representing over 75% of palm oil produced, including Cargill, Wilmar, Goldenagri Resources, and IOI Loders Croklaan.

By contrast, while IFF has indicated that it intends to source RSPO certified palm oil by 2015, but has yet to adopt comparable commitments. Therefore, proponents are concerned that IFF may be exposed to brand and reputational risks from supply chain impacts on deforestation and human rights.

Resolved

Shareholders request that IFF report annually at reasonable cost and omitting proprietary information, on key performance indicators demonstrating the extent to which the company is curtailing the impact of its palm oil supply chain on deforestation and human rights.

• Supporting StatementProponents believe a meaningful response to this proposal could include, among other company responses:
• A “no deforestation, no peat clearance, and no exploitation” policy;
• Percentage of palm oil traceable to suppliers and verified by credible third parties as not engaged in (1) physical expansion into peatlands, High Conservation Value or High Carbon stock forests, or (2) human rights abuses such as child or forced labor;
• A time-bound plan for 100% sourcing consistent with those criteria;
• An explicit commitment to strengthen third-party certification programs to prevent development on high carbon stock forests and peatlands; and
• Percent of Palm Oil RSPO certified (including percentage GreenPalm, Mass Balance and/or Segregated).