Oreo Cookie Maker Targeted by Greenpeace to Save Orangutans

(Bloomberg) -- The maker of Oreo cookies has become the latest target by Greenpeace in its campaign to stop the destruction of rainforests for palm oil.

The environmental group accused palm oil suppliers to snack giant Mondelez International Inc., which makes the famous black and white cookie as well as Cadbury chocolate bars, of deforestation and destroying orangutan habitats in Indonesia. In response, Illinois-based Mondelez told Bloomberg News it is actively working with suppliers to ensure palm oil is fully traceable and does not lead to deforestation, and is excluding 12 companies from its supply chain as a result of breaches.

Concerns over palm oil's environmental and social impact have led to increased scrutiny, with farmers accused of illegally using slash-and-burn methods to clear land for plantations, destroying rainforests and animal habitats as well as exacerbating water and air pollution.

That's resulted in governments and producers struggling to improve the perception and marketability of the tropical oil, and has prompted the creation of a sustainability roundtable that monitors the industry. Palm oil futures were little changed on Thursday, after sliding to a 3-year low in the previous session. Mondelez shares dropped 0.7 percent on Wednesday in New York.

Greenpeace Analysis

Almost 25,000 hectares of orangutan habitat and 70,000 hectares of rainforest was destroyed between 2015 and 2017 in Indonesia, according to Greenpeace's analysis of deforestation by 25 palm oil producers that were cross-referenced with supply chain information published by Mondelez and other brands, it said.

Mondelez, which says it accounts for about 0.5 percent of global palm consumption, is committed to “eradicating deforestation” in its palm oil supply and will continue to exclude suppliers that do not meet its principles, it said. At the end of 2017, 96 percent of its palm oil was traceable back to mill and 99 percent was from suppliers with policies aligned to ours, the company said.

“We're asking our direct suppliers to call on their upstream suppliers to map and monitor the plantations where oil is grown so we can drive further traceability,” Mondelez said in an email response to Bloomberg. “We're also excluding 12 companies from our supply chain as a result of breaches.”

--With assistance from James Attwood.

To contact the reporter on this story: Anuradha Raghu in Kuala Lumpur at araghu3@bloomberg.net

To contact the editors responsible for this story: Anna Kitanaka at akitanaka@bloomberg.net, Atul Prakash

©2018 Bloomberg L.P.