NSRGY Nestle SA (PK)

   By Maitane Sardon 
 

Nestle (NESN.EB) on Tuesday said it has verified that 77% of the agricultural commodities it uses for its products aren't linked to deforestation activities, as it works toward its goal to curb rainforest destruction caused by large-scale plantations.

The Swiss food-and-drink manufacturer said it is now sourcing more than three quarters of commodities such as palm oil, cocoa and soya from plantations that aren't using nearby virgin forests to expand their farms.

To verify that suppliers aren't destroying forests to make land available, Nestle said it is combining satellite-monitoring services and engagement with all of its suppliers. The company aims to have a deforestation-free supply chain by 2020.

Previously, a lack of technology didn't allow for close monitoring of Nestle's primary agricultural-products suppliers, said Benjamin Ware, global head of responsible sourcing, but the company now uses satellites to monitor the land where suppliers operate. These analyze the heat coming from the soil and show whether land is being burned as well as the type of forest and crop.

"We were blind before, we didn't know where to go and it was very time-consuming, but now we get deforestation alerts and can take action," he said.

If a supplier is found to be destroying rainforest to expand its plantation, Nestle asks it to commit to compensate for the loss. If the supplier agrees, it enters a six-month monitoring plan, he said. If the supplier doesn't agree, Nestle cuts ties with the supplier.

Mr. Ware said the data collected show that challenges remain, especially when dealing with smaller farmers delivering small quantities of palm oil that can't be monitored.

Write to Maitane Sardon at maitane.sardon@dowjones.com

(END) Dow Jones Newswires

April 30, 2019 12:07 ET (16:07 GMT)

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