Supplier Engagement

Supplier engagement is the process we use to make sure our suppliers are operating in compliance with our Policy on Sustainable Palm Oil and Supplier Code of Conduct.

By mapping our palm oil supply chain to understand where the palm oil comes from and identify risk areas using the Global Forest Watch Commodities (GFWC) PALM Risk Tool, we establish a list of high-priority mills for engagement. We have different strategies in place to engage our direct and indirect suppliers.

Direct suppliers

In the markets where we buy directly from mills, we conduct field assessments of mills located in high-risks areas to identify gaps in the mills’ performance, provide support to develop continuous improvement plans to address those gaps and verify compliance. We use the Aggregator/Refiner Transformation (ART) plan, an approach developed by Earthworm (formerly The Forest Trust), and the Proforest supplier engagement approach to ramp up the transformation process of high priority mills. This allows us to review on a wider scale than simply one mill catchment at a time and to focus on change efforts on an aggregator/refiner’s entire supply base.

Mills considered to be located in low- or medium-risk areas complete self-assessments. We review and validate those assessments to determine appropriate next steps, including field visits or specific capacity-building activities. In Latin America, for example, our sustainability engagement program measures supplier progress and provides online training for mills focused on reducing deforestation and protecting human rights.

Mills considered to be located in low- or medium-risk areas complete self-assessments. We review and validate those assessments to determine appropriate next steps, including field visits or specific capacity-building activities. In Latin America, for example, our sustainability engagement program measures supplier progress and provides online training for mills focused on reducing deforestation and protecting human rights.

Indirect suppliers

For mills with whom we do not have a direct commercial relationship, we hold the traders and refineries (who are our direct suppliers) accountable to ensure they have a time-bound NDPE action plan covering their entire supplier base. We assess the traders/refineries to determine the status of their plan and provide support as needed to close gaps and drive change across our supply chain.

Group-level engagement

Many suppliers from which we source palm oil belong to larger producer groups. These groups generally own mills and plantations across different regions and thus may have operations that are not within our supply chain. Considering the breadth of these groups’ operations, they may be engaging in new developments over which we do not have direct visibility that may bring indirect risk to our NDPE commitments. We recognize Cargill’s potential influence on an entire producer group through our business relationships. We consider it our responsibility to engage with our suppliers and support them in advancing toward more sustainable practices across their entire organization, including existing operations and future development of new mills. To that end, we are working with partners to implement sustainability improvement programs at the producer group level.

In Indonesia, for example, we discovered -through discussions with Proforest- that our supplier Musim Mas was formulating its strategy around proactive engagement at the company group level. We are collaborating with Musim Mas, including development of a roadmap for proactive engagement and pilot testing the strategy. Based on what we learned, we are now working with the Consortium of Resource Experts (CORE), including Proforest and Daemeter Consulting, to implement an engagement program for other producer groups. We work through the mills in our supply chain to develop a relationship with decision-makers at the group level. Each group is evaluated to assess their level of understanding and existence of NDPE policies and NDPE principles as well as whether they have an NDPE policy implementation plan. Then engagement programs are structured based on potential risks and NDPE implementation gaps. Each group will ultimately have a group-level roadmap to guide implementation.

Measuring our performance

Initially, our expectation was that we would conduct our own assessments of mills located in high-risk areas and that all mills would have their own NDPE policy, but we learned through implementation that in cases where we are not directly contracting with mills and have less influence, we need to work through our relationships with traders and refiners to drive change. We have adjusted our approach to reflect this reality. We hold our direct suppliers responsible and support them to ensure they are meeting our expectations.

To learn about our progress, see our Palm Sustainability Dashboard, as well as Cargill’s most recent Impact Report.