"Pepsi updates sustainable palm oil policy to close supplier loophole," 12 March 2020

Environmental activists have welcomed...PepsiCo’s move to update its palm oil sustainability policy, following years of pressure over a supply chain tainted by deforestation, peatland conversion, and labour rights violations.

PepsiCo’s new policy of “No Deforestation, No Peat, No Exploitation,” or NDPE, addresses a previous loophole by applying to a wider network of suppliers and business partners. “It applies to all palm and palm kernel oil that we use globally and covers our entire supply chain, from direct suppliers to production sources at the group level, meaning NDPE should be applied across their entire operations and third-party supply chain and not limited solely to the palm oil sold to PepsiCo,” the company says.  

“We commend PepsiCo for adopting a comprehensive policy and leading actions that, if implemented, will drive change in its palm oil supply chain as well as the broader palm oil industry,” said Robin Averbeck, agribusiness campaign director with the Rainforest Action Network (RAN), the U.S.-based advocacy group that worked with PepsiCo to update the policy.

Previously it had committed to no longer buying palm oil from cleared forests or peatlands as of the end of 2015. And in 2018 it updated its policy by setting 2020 as the deadline for the full implementation of its NDPE commitment.

But the sustainability policy had a large loophole: it applied only to PepsiCo’s direct suppliers, and not third-party suppliers, thus allowing the company to maintain business partnerships with suppliers that were actively abusing workers’ rights and destroying tropical rainforests and peatlands.