Investors Welcome Panera Bread's Commitment to Sustainable Palm Oil
FOR IMMEDIATE RELEASE
INVESTORS WELCOME PANERA BREAD'S COMMITMENT TO SUSTAINABLE PALM OIL
As a result of shareholder engagement, new food policy includes company's commitment to reduce the environmental and social impacts of its palm oil sourcing.
New York, Monday, June 30, 2014 - Today, shareholders of the Panera Bread Company and members of the Interfaith Center on Corporate Responsibility (ICCR), commend the company for developing a comprehensive Food Policy which includes a specific commitment to reduce the environmental and social impacts of sourcing palm oil and its derivatives.
While many leading food manufacturers including Kellogg’s, Mondelez, P & G, Unilever, Campbell’s and ADM have formal policies to source only sustainable palm oil, Panera is among the first restaurant chains to make this commitment.
The Food Policy outlines three areas of focus: clean ingredients; transparent menu; and positive impact, stating that they believe their customers deserve to know not only what is in their food, but where it comes from and how companies are impacting the food system. In addition to the policy, Panera has committed to adopt practices to ensure its food containing palm oil ingredients, including derivatives of palm oil, are sourced sustainably. Specifically, this includes sourcing from palm oil plantations with:
- Independent verification that they have not contributed to the degradation of peatlands, high carbon stock forests or high conservations value area;
- Assurance that the plantations do not have significant conflicts related to land tenure;
- Transparency that suppliers are not involved in forced or child labor, slavery or human trafficking, and that they support the protection of indigenous rights throughout the palm oil supply chain
They intend by 2016, consistent with available supply, to sustainably source 100% of palm oil ingredients and derivatives that meets a certification process at least as rigorous as those published by the Roundtable of Sustainable Palm Oil (RSPO). They will provide annual public reporting on progress.
Sr. Sue Ernster of the Franciscan Sisters of Perpetual Adoration, lead filer of a shareholder proposal on palm oil at Panera said, "As a community of Catholic women religious we are concerned about the least of our brothers and sisters and the integrity of creation. When it is not sourced sustainably, palm oil is known to have devastating impacts, including deforestation and forced child labor. We are gratified to see that through our engagement, management is formally recognizing the importance of sourcing sustainable palm oil."
Approximately 90% of palm oil is grown in Indonesia and Malaysia. Unregulated palm oil plantations in these countries are responsible for wide-scale deforestation and the destruction of carbon-rich peatlands, making it a leading cause of greenhouse gas (GHG) emissions. In fact, the World Bank ranks Indonesia as the third largest emitter of GHGs and directly attributes more than half of these emissions to peatland and forest conversion.
Moreover, according to the U.S. Department of Labor, the palm oil industry is notorious for human rights violations including the use of child and forced labor. It is estimated that 25% of the palm oil produced in the Philippines is linked to child labor. In July 2013, Bloomberg uncovered detailed evidence of slavery on palm plantations owned by companies selling to some of America's largest palm oil importers.
Panera Bread’s new ethical sourcing commitment for palm oil was influenced by ongoing dialogue with the Franciscan Sisters and other ICCR members. The investors contended that, in the absence of comprehensive protocols to ensure responsible sourcing, the company was exposed to financial, legal and reputational risks that could materially impact shareholder value. As a result of this engagement and Panera's agreement to develop a sustainable palm oil policy, the Franciscan Sisters withdrew their resolution.
Separately, another ICCR member, Trillium Asset Management, withdrew its shareholder proposal at Panera following a commitment from the company to publish a sustainability report by December 1, 2015. In preparation for the report Panera will conduct a materiality assessment in order to identify and prioritize issues that are material to the company. By issuing a sustainability report, Panera will gain strategic value from existing sustainability efforts and strengthen its ability to identify and manage ESG risks and opportunities.
About the Interfaith Center on Corporate Responsibility (ICCR)
Currently celebrating its 43rd year, ICCR is the pioneer coalition of active shareholders who view the management of their investments as a catalyst for change. Its 300 member organizations with over $100 billion in AUM have an enduring record of corporate engagement that has demonstrated influence on policies promoting justice and sustainability in the world.
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