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Environment Q&A

Perhaps more than any other sector, agriculture faces huge environmental challenges that are interlocked and complex. At a global scale, our operations and those of our suppliers are at risk of climate change, poor soil quality, and water scarcity, which in turn impact on global food security. We explore our achievements and challenges in 3 of our material areas that focus on environmental impacts: land, water and climate change.

Q&A with Dr Christopher Stewart, Head of Corporate Responsibility and Sustainability

Olam is a member of the UN Global Compact. How do you fulfil Principle 7 of taking a precautionary approach to environmental challenges?

As a global agri-business we, and our suppliers, are dependent on the earth’s natural resources. Maintaining sustainable yields and growing our business means that we have to act as responsible stewards of the environment and encourage third-parties to do the same. Our own operations must avoid or mitigate potential negative impacts, therefore all investment cases for any new developments must undergo environmental and social impact assessments and implement the relevant management plans. For our existing operations, we are guided by our Risk Scorecard, as well as a suite of Policies, Codes and Standards. Our Governance structure ensures that we adhere to these principles and that we undertake regular audits and gap assessments.

How did Olam perform against its environment goals in 2016?

Our carbon footprint for our own operations continues to improve. We are also making good progress with our Climate-Smart Agriculture training programmes for smallholders, and we have undertaken ground-breaking work on water stewardship, for example in coffee. We increased the overall tonnage covered under the Olam Supplier Code (OSC). The Code covers social, as well as environmental requirements, and we’re updating it in 2017 to reflect the evolution of our global policies. Managing the impact of our third-party supply chains is a 3-step process: firstly, we need to complete the roll-out of our Supplier Code; then we need to verify that suppliers are upholding the Code; and finally, we must work with suppliers to address any issues that we identify in this process. This can be straightforward when we have direct engagement with the supplier but it is much more challenging when we are procuring through a third-party, as we don’t have the direct link to producers. With a supplier base of more than 4 million smallholder farmers, verifying that each one is upholding the Code is impossible. Our big challenge this year is how to combine risk assessment, partnerships and pre-competitive verification platforms to ensure compliance with the Code, building on the extraordinary development of remote sensing technology and traceability systems.

Which environmental issues were stakeholders particularly interested in?

As an organisation that sources from thousands of farmers in developing countries, many of the issues in our supply chains are social problems, linked to poverty and lack of services, rather than strictly speaking environmental – but clean water, fertile land and climate suitability are essential for these communities to thrive. Climate-Smart farming and Water Stewardship practices are examples of the ways we are responding to these concerns.

As we have moved upstream, stakeholders are increasingly asking us to demonstrate a much broader form of responsibility, taking on community development and large-scale conservation issues within the landscapes where our plantations are sited. Social contracts that recognise community land rights are the key platform for our continuous engagement plans, upheld by robust grievance procedures. Eliminating deforestation from palm and rubber supply chains was raised by the NGO Mighty Earth in 2016 (see the Land section of this report), whilst deforestation is increasingly recognised as a major issue in the cocoa sector. Building on our existing upstream policies, in 2017 we have developed a Global Forest Policy to eliminate unsustainable practices across all our supply chains.

We have tried to ensure that the majority of the points raised by stakeholders have been addressed in this report.

Read more on sustainability progress in our GRI Report and Olam Livelihood Charter