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Canada - forestry
This is a filtered view based on 2014 - Forests Risk Assessment.
| Row number | Year | Organization | Country HQ | Forest Risk Commodity | Forest Risk Assessment | Forest Risk Process | Regulatory risks - Risk Present | Regulatory risks - Further Details | Reputational Risks - Risk Present | Reputational Risks - Further Details | Operational Risks - Risk Present | Operational Risks - Further Details | Water 2014 - Number of drivers |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 151 | 2014 | L'Oréal | France | Palm Oil | Yes | L’Oréal is well aware that some agricultural commodities may lead to deforestation and has been implementing specific action plans to avoid contributing to this phenomenon by favouring sustainable sourcing of soya oil, palm oil and wood-fibre based products. As part of its “zero deforestation” commitment by 2020, the Group plans to take this commitment further by closely involving its suppliers in this objective. At the end of 2013, all of L’Oréal’s palm oil purchases were made according to sustainable procedures whose aim is to guarantee preservation of the biodiversity of forests in South East Asia. Since 2010, direct purchases of palm oil (approximately 450 tons in 2013) have been based on total traceability certified by RSPO SG (Roundtable on Sustainable Palm Oil, Segregated Model). Since 2012, another category of ingredients, palm oil derivatives, whose supply channels are very complex, have also been certified as sustainable by the RSPO. This includes, for example, certain surface active agents which provide the detergent and foaming qualities of shampoos. They are compensated for by GreenPalm (RSPO Book & Claim) certificates, the purchase of which enables the marketing of an equivalent volume of palm oil certified as sustainable. The aim in the long term is that all raw materials obtained from palm trees should come directly from plantations certified as sustainable by the RSPO and free from deforestation (see L’Oreal Zero deforestation Commitment attached below). | Non-material risk | No regulatory risk considering that we comply with existing regulations and considering our extremely low consumption of this commodity for very specific uses. | Non-material risk | Since the beginning of 2010, 100% of our palm oil comes from sustainable sources and PSPO certified (Segregated model). Therefore, there is no reputational risk for palm oil. For the palm oil derivatives, whose supply channels are very complex, they have also been certified as sustainable by the RSPO. They are compensated for by GreenPalm (RSPO Book & Claim) certificates, the purchase of which enables the marketing of an equivalent volume of palm oil certified as sustainable. However, L'Oreal is conscious that some agricultural commodities may lead to deforestation and consider that they could represent in the furture a reputational risk. This is why, L’Oreal committed to reach the following targets: • By 2015, 100% palm oil and major palm derivatives should come from known sources. • By 2020 the latest: 100% of palm supply will be free from deforestation. | Non-material risk | No operational risk considering our supply chain control & monitoring process (see below). Concerning the derivatives, we buy small volumes compared to the market size. Therefore, we could be impacted by a suppliers risk and a price risk. In addition, it is hard today to find in the market derivatives sourced via the Segregated model. | |
| 152 | 2013 | Marfrig Alimentos S.A. | Brazil | Timber | Yes or 100% third party certified raw materials already achieved | The Marfrig Group has a process of buying firewood and pallets considering buying from suppliers that comply with national legislation and can prove that the wood comes from sustainable origins. The purchase of paper and cardboard is made only of FSC certified suppliers. This process ensures the company to mitigate the financial, operational and reputational risks, related to the purchase of wood products. With this management process, the Group can ensure that the firewood used in Brazil is almost totally originated form planted forest. The Group have a commitment to bring to absolute zero the residual amount of native wood used in Brazil, despite being from authorized origin. | Non-material risk | Low risk, all wood must follow the legal procedures before being purchased by the Company (DOF - IBAMA, in case of native wood) | Material risk | Marfrig must monitor the situation of its suppliers periodically to guarantee that they continue in compliance with all legal and internal sustainability requirements, so that the purchasing of this commodity does not impact the company’s reputation | Non-material risk | The supply risk exists, however is low for the sources used by the Company, the current market practices in Brazil is that the wood from sustainable sources has a higher price, but it is available. | |
| 153 | 2013 | Marfrig Alimentos S.A. | Brazil | Palm Oil | Yes or 100% third party certified raw materials already achieved | Marfrig Group’s activities in Brazil acquire 100% of the palm oil in accordance with the directives from the Round Table on Sustainable Palm Oil. The company understands that this management level is sufficient to ensure the mitigation of the financial and reputational risks that the company is exposed to. In Brazil the palm oil is purchased exclusively from Agropalma, a Company with several sustainability certifications. | No risk | Brazilian legislation does not cover specific requirements for palm oil production | No risk | Marfrig must monitor the situation of its suppliers periodically to guarantee that they continue in compliance with all legal and internal sustainability requirements, so that the purchasing of this commodity does not impact the company’s reputation | Non-material risk | Supply risk for sustainable source is very low in Brazil | |
| 154 | 2013 | Marfrig Alimentos S.A. | Brazil | Cattle Products | Yes or 100% third party certified raw materials already achieved | Marfrig Group has a standard procedure for the management of the risks coming from the cattle products acquiring, which covers the reputational, financial and operational aspects. The risk management contemplates the geospatial monitoring specially focused on Amazon region, the consult to public information as the IBAMA’s list of embargoed areas, specific documents required from each producers, and the in-loco survey of the farms location. In Brazil, cattle purchase is traced by a sophisticated geo-processing system over the original suppliers. It automatically blocks any purchase from a property that could be associated to deforestation activities in the Amazon. | Material risk | Units that purchase animals from embargoed areas by the IBAMA may be interdicted. | Material risk | Marfrig must monitor the situation of its suppliers periodically to guarantee that they continue in compliance with all legal and internal sustainability requirements, so that the purchasing of this commodity does not impact the company’s reputation | Material risk | If a large number of suppliers are present in the list of embargoed areas from IBAMA, it can affect the Group’s ability to purchase animals. Cattle are an input that cannot be replaced in the company’s activities. | |
| 155 | 2013 | Marfrig Alimentos S.A. | Brazil | Soy | Yes or 100% third party certified raw materials already achieved | The Group has a Committee on Agricultural Commodities, composed by Seara Division’s CEO, CFO, and Directors of Agricultural and Supply Chain, this committee meets monthly to review climate maps, progress on planting reports, global supply and demand framework, price curves and economic scenario. The result of the monthly meetings of this committee corresponds to the strategic planning for commodities purchasing to the short term (three months), medium term (1 year) and long term (10 years). Soy has a risk perception in Brazil, so the Company purchases from suppliers that are signatories to the “ Soy Moratorium” | Material risk | Units that purchase soy from embargoed areas by the IBAMA may be interdicted. | Material risk | Marfrig must monitor the situation of its suppliers periodically to guarantee that they continue in compliance with all legal and internal sustainability requirements, so that the purchasing of this commodity does not impact the company’s reputation | Material risk | If a large number of suppliers are present in the list of embargoed areas from IBAMA, it can affect the Group’s ability to purchase soybean. | |
| 156 | 2013 | Marfrig Alimentos S.A. | Brazil | Biofuels | Yes or 100% third party certified raw materials already achieved | Biofuel consumed by the Company are almost totally included in the official blends of Ethanol with Gasoline and Biodiesel with Diesel, which are controlled by the local governments so out of the reach of risk assessment by the Company. The sugar cane bagasse acquired by the beef division is a by-product from the ethanol production in Brazil, and the Brazilian ethanol is considered as the most sustainable source by DEFRA. | No risk | The main consumption corresponds to national official blends and ethanol by-products | Non-material risk | Marfrig must monitor the situation of its suppliers periodically to guarantee that they continue in compliance with all legal and internal sustainability requirements, so that the purchasing of this commodity does not impact the company’s reputation | No risk | Supply risk for sustainable source is very low in Brazil | |
| 157 | 2013 | Marks and Spencer Group plc | United Kingdom | Soy | Yes or 100% third party certified raw materials already achieved | Our risk assessment process evaluates the potential impact on reputation, security of supply, environmental & social conditions, and productivity. As we specify non-GMO soy for our Food products availability of certified non-GMO materials that meet our sustainability standards is a key risk for M&S. | No risk | Material risk | Most raw materials face significant social, environmental and land use change challenges and therefore attract considerable NGO and media attention and campaigning. We are reliant on the credibility of the sustainability schemes/organisations we work with, and therefore are dependent of scheme acceptance by opinion formers. | Material risk | We use soy for food and for animal feed. An inability to procure sufficient quantities of the right material undermines our operational efficience, product development and competitiveness. | ||
| 158 | 2014 | Marfrig Alimentos S.A. | Brazil | Timber | Yes | The Marfrig Group has a process of buying firewood and pallets considering buying from suppliers that comply with national legislation and can prove that the wood comes from sustainable origins. The purchase of paper and cardboard is made only of FSC certified suppliers. This process ensures the company to mitigate the financial, operational and reputational risks, related to the purchase of wood products. With this management process, the Group can ensure that the firewood used in Brazil is almost totally originated form planted forest. The Group have a commitment to bring to absolute zero the residual amount of native wood used in Brazil. | Non-material risk | Low risk, cause we eliminate the native wood purchase. The reforestation wood comes from legal areas and with all the traceability documents. | Non-material risk | Marfrig must monitor the situation of its suppliers periodically to guarantee that they continue in compliance with all legal and internal sustainability requirements, so that the purchasing of this commodity does not impact the company’s reputation | Non-material risk | The supply risk exists, however is low for the sources used by the Company, the current market practices in Brazil is that the wood from sustainable sources has a higher price, but it is available. | |
| 159 | 2014 | Marfrig Alimentos S.A. | Brazil | Cattle Products | Yes | : Marfrig Group has a standard procedure for the management of the risks coming from the cattle products acquiring, which covers the reputational, financial and operational aspects. The risk management contemplates the geospatial monitoring specially focused on Amazon region, the consult to public information as the IBAMA’s list of embargoed areas, specific documents required from each producers, and the in-loco survey of the farms location. In Brazil, cattle purchase is traced by a sophisticated geo-processing system over the original suppliers. It automatically blocks any purchase from a property that could be associated to deforestation activities in the Amazon. | Material risk | Units that purchase animals from embargoed areas by the IBAMA may be interdicted. | Material risk | The acquisition of irregular cattle, would result in large and serious damage to the reputation of the company, mainly by cattle is one of the main drivers of deforestation in the Amazon Biome and the company has made commitments to zero deforestation in the Amazon Biome. Mainly risks: NGO campaigns and corporate exposés; high levels of media coverage around the issue; government concern in your consumer market, or the country of origin; public boycotts of products; and customer reputation. | Material risk | If a large number of suppliers are present in the list of embargoed areas from IBAMA or Geographic Information System, it can affect the Group’s ability to purchase animals. Cattle are an input that cannot be replaced in the company’s activities. | |
| 160 | 2014 | Marfrig Alimentos S.A. | Brazil | Soy | Yes | the sale of Seara, that used too much soy to feed chickens and pigs, and the decrease of feedlots plants, the group reduced their needs for soybean and exposure to risks of this commodity, besides, the price encourages the use of other protein food substitutes. Still, Marfrig own internal policies query lists of embargoed areas and slave labor, and prioritize suppliers that comply with the soy moratorium or are members of RTRS. | Material risk | Units that purchase soy from embargoed areas by the IBAMA may be interdicted. | No risk | Marfrig must monitor the situation of its suppliers periodically to guarantee that they continue in compliance with all legal and internal sustainability requirements, so that the purchasing of this commodity does not impact the company’s reputation | Material risk | If a large number of suppliers are present in the list of embargoed areas from IBAMA, it can affect the Group’s ability to purchase soybean. | |
| 161 | 2013 | Marks and Spencer Group plc | United Kingdom | Timber | Yes or 100% third party certified raw materials already achieved | Our risk assessment process evaluates regulatory compliance, potential impact on reputation, security of supply, and environmental & social risk (including species, deforestation rates, high conservation values, conflict timber, corruption, illegal harvesting, value chain relationships and transparency, and commercial relationship). | Material risk | EU Timber Regulation | Material risk | Most raw materials face significant social, environmental and land use change challenges and therefore attract considerable NGO and media attention and campaigning. We are reliant on the credibility of the sustainability schemes/organisations we work with, and therefore are dependent of scheme acceptance by opinion formers. | Material risk | We are reliant on timber for a wide range of our in-store product offer, for construction, marketing and consumable materials and packaging. An inability to procure sufficient quantities of the right material undermines our ability to operate. | |
| 162 | 2013 | Marks and Spencer Group plc | United Kingdom | Palm Oil | Yes or 100% third party certified raw materials already achieved | Our risk assessment process evaluates the potential impact on reputation, security of supply, productivity & agricultural practice (eg, use of pesticides), environmental & social conditions, deforestation risk, and availability of certified materials at production level and through the value chain . | No risk | Material risk | Most raw materials face significant social, environmental and land use change challenges and therefore attract considerable NGO and media attention and campaigning. We are reliant on the credibility of the sustainability schemes/organisations we work with, and therefore are dependent of scheme acceptance by opinion formers. | Material risk | We are reliant on palm oil for a wide range of our in-store food and non-food product offer. An inability to procure sufficient quantities of the right material undermines our operational efficience, product development and competitiveness. | ||
| 163 | 2013 | Marks and Spencer Group plc | United Kingdom | Cattle Products | Yes or 100% third party certified raw materials already achieved | Our risk assessment process evaluates the potential impact on reputation, environmental & social conditions, animal welfare factors and chemical use during processing (leather). | No risk | Material risk | Most raw materials face significant social, environmental and land use change challenges and therefore attract considerable NGO and media attention and campaigning. We are reliant on the credibility of the sustainability schemes/organisations we work with, and therefore are dependent of scheme acceptance by opinion formers. | Non-material risk | Very limited risk for beef as the bulk of our beef comes from UK / ROI, however leather is required for a wide range of our fashion offer. | ||
| 164 | 2014 | Marks and Spencer Group plc | United Kingdom | Timber | Yes | Our risk assessment process evaluates materiality, regulatory compliance, potential impact on reputation, security of supply, availability of certification, and environmental & social risk (including species, deforestation rates, high conservation values, conflict timber, corruption, illegal harvesting, value chain relationships and transparency, and commercial relationship). It also considers availability of solutions and their effectiveness. | Material risk | EU Timber Regulation requires M&S to put in place a due diligence system to minimise the risk of importing illegally harvested timber. | Material risk | It is important to M&S that our customers trust us to be effective custodians of their values. Timber faces significant social, environmental and land use change challenges and therefore attracts considerable media attention and NGO campaigning. We are reliant on the credibility of the sustainability schemes/organisations available in the market, and therefore are dependent on scheme acceptance by opinion formers for reputational risk management. | Material risk | We are reliant on timber for a wide range of our in-store product offer, for construction, marketing and consumable materials and packaging. An inability to procure sufficient quantities of the right material undermines our ability to operate. | |
| 165 | 2014 | Marks and Spencer Group plc | United Kingdom | Palm Oil | Yes | Our risk assessment process evaluates materiality, potential impact on reputation, security of supply, productivity & agricultural practice (eg, use of pesticides), environmental & social conditions, deforestation risk, and availability of certified materials at production level and through the value chain. It also considers availability of solutions and their effectiveness. | No risk | There is no regulation applicable to M&S relating to palm oil sourcing or use. | Material risk | It is important to M&S that our customers trust us to be effective custodians of their values. Palm Oil faces significant social, environmental and land use change challenges and therefore attracts considerable media attention and NGO campaigning. We are reliant on the credibility of the sustainability schemes/organisations available in the market, and therefore are dependent on scheme acceptance by opinion formers for reputational risk management. | Material risk | We are reliant on palm oil for a wide range of our in-store food and non-food product offer. An inability to procure sufficient quantities of the right material undermines our operational efficience, product development and competitiveness. | |
| 166 | 2014 | Marks and Spencer Group plc | United Kingdom | Cattle Products | Yes | Our risk assessment process evaluates materiality, availability of certification, potential impact on reputation, environmental & social conditions, animal welfare factors and chemical use during processing (leather). It also considers availability of solutions and their effectiveness. | No risk | There is no regulation applicable to M&S relating to beef or leather sourcing or use. | Material risk | It is important to M&S that our customers trust us to be effective custodians of their values. Beef and leather face significant social, environmental and land use change challenges and therefore attract considerable NGO and media attention and campaigning which could negatively affect our brand. | Non-material risk | Very limited risk for beef as the bulk of our beef comes from UK / ROI, however leather is required for a wide range of our fashion offer. | |
| 167 | 2014 | Marks and Spencer Group plc | United Kingdom | Soy | Yes | Our risk assessment process evaluates materiality, availability of certification, potential impact on reputation, security of supply, environmental & social conditions, and productivity. As we specify non-GMO soy for our Food products, availability of certified non-GMO materials that meet our sustainability standards is a key risk for M&S. It also considers availability of solutions and their effectiveness. | No risk | There is no regulation applicable to M&S relating to soy sourcing or use. | Material risk | It is important to M&S that our customers trust us to be effective custodians of their values. Soy faces significant social, environmental and land use change challenges and therefore attracts considerable media attention and NGO campaigning. We are reliant on the credibility of the sustainability schemes/organisations available in the market, and therefore are dependent on scheme acceptance by opinion formers for reputational risk management. | Material risk | We use soy for food and for animal feed. An inability to procure sufficient quantities of the right material undermines our operational efficience, product development and competitiveness. | |
| 168 | 2013 | McCormick & Company, Incorporated | USA | Soy | Yes or 100% third party certified raw materials already achieved | McCormick has contacted our suppliers and that they have provided a list of the source countries. For countries potentially subject to deforestation risks, they have also provided written statements that the soy did not originate from areas of deforestation in these countries. Soy production does not represent a material risk to McCormick to the best of our knowledge. We will continue to work with our suppliers on this issue. | Non-material risk | Based on our review we do not believe this represents a material risk to the best of our knowledge. We will continue to work with our suppliers on this issue. | Non-material risk | Based on our review we do not believe this represents a material risk to the best of our knowledge. We will continue to work with our suppliers on this issue. | Non-material risk | Based on our review we do not believe this represents a material risk to the best of our knowledge. We will continue to work with our suppliers on this issue. | |
| 169 | 2014 | McCormick & Company, Incorporated | USA | Soy | Yes | McCormick has contacted our suppliers and that they have provided a list of the source countries. For countries potentially subject to deforestation risks (Brazil, Argentina etc.), they have also provided written statements that the soy did not originate from areas of deforestation in these countries. Soy production does not represent a material risk to McCormick to the best of our knowledge. We will continue to work with our suppliers on this issue. | Non-material risk | Based on our review we do not believe this represents a material risk to the best of our knowledge. We will continue to work with our suppliers on this issue. | Non-material risk | Based on our review we do not believe this represents a material risk to the best of our knowledge. We will continue to work with our suppliers on this issue. | Non-material risk | Based on our review we do not believe this represents a material risk to the best of our knowledge. We will continue to work with our suppliers on this issue. | |
| 170 | 2013 | Metsä Board | Finland | Timber | Yes or 100% third party certified raw materials already achieved | Our products come from sustainably managed forests. Together with partners we ensure that when a tree is harvested, new ones get planted. We secure sustainable supply of raw materials for our units and a supply of renewable products for our customers. We have PEFC and FSC based risk assesments and wood tracing systems in place. Risk assesments are up dated at least once per year. Metsä Board is closely following market signals to detect if any drastic changes are expected in customer behaviour and demand. Metsä board assesses risks on different levels – Group, Business Area and production unit, which also cover supplier operations. At the Group and Business Area-levels, risks are assessed twice a year – one assessment for risks related to Business Areas’ strategies and one for risks related to annual planning. Insurance companies perform technical risk surveys at major production units annually focusing on key property damage and business interruption risks. Our risk assessment management covers the whole value chain from securing the availability of wood to being prepared for possible product liability cases. Risk assessments also cover the entire value chain including all five Business Areas. Our focus on risk management is on preventive damage and loss control. One of the most important tasks of risk management is to ensure undisturbed operations and continuous production, which supports the environmental risk management at the same time. An essential part of Metsä Board’s enterprise risk management is the active co-operation with insurance industry. The major hazard risks such as fires, machine breakdowns and environmental damages, are covered by global insurance policies by insurance companies. Key insurance policies are property damage and business interruption policy as well as general third party and product liability insurance. The centralised environmental risk management is also one of the means to mitigate accidental releases by making use of knowledge transfer within the company. | No risk | The EU’s unilateral climate change policies are weakening the global competitiveness of European industries. As long as the major emitting countries are not committed to comparable and equal emission reductions, European companies do not have equal operating conditions in relation to external competitors. Moreover, the EU’s unpredictable climate change and energy polices as well as overlapping environmental policies and targets influence investment conditions. The EU Timber Regulation is a law (EU Regulation No 995/2010) and an important part of FLEGT Action Plan that will apply across all 27 European Union member states from March 3, 2013. The core objective is to prohibit all timber products that have been illegally harvested from being placed on the EU market. It covers a broad range of timber products including round wood, solid wood products, flooring, plywood, pulp and paper. All our product fullfill the requirements of EU Timber Regulation. | No risk | Several paper companies have faced reputational losses due to illegal operations in wood procurement. However, all wood used by Metsä Board is traceable and comes from sustainable managed forests. PEFC and FSC Chain of Custodies requires detailed risk evaluation process and these due diligence system reporst ase publicly available. Forest certification is a voluntary system which supports the well-being of forests and confirms the legal origin of the wood. Forest certification is based on an inspection carried out by an independent third party, and it consists of two parts: forest certification and certification of the chain of custody. Forest certification helps to demonstrate to the buyers of wood and paper products that the decision to purchase supports sustainable forestry. Metsä Group supports forest certification that is suitable for local conditions and inspected by a reliable and independent third party. We also actively promote forest certification initiatives in the whole wood supply region.Metsä Board fulfils the obligations of the European Union Regulation No 995/2010 (EU Timber regulation) and US Lacey Act, which prohibit the placing and trading of illegally harvested timber and timber products on the market. | No risk | Due to the remote location of Finland and the structure of its economy, the need for energy and transportation is higher than the average in Europe. As Finland is completely dependent on maritime transport, any increases in the cost of energy and transportation resulting from climate change and energy policies can considerably weaken the relative competitiveness of its energy intensive industries in relation to the EU and external competitors. Deforestation and illegal loggings are seen as the most important challenges.Only about 9 % of world's forests are certified according to forest certication schemes. Also challenge is to increase total area of certified forests in areas that have low certification rates. Demand for certified products is much bigger that availability in the markets. Although amount of certified raw material in Metsä Group already on very high level, we constantly arfe looking for ways to increase amount of certified raw materials in our supply chain. | |
| 171 | 2014 | Metsä Board | Finland | Timber | Yes | Our products come from sustainably managed forests. Together with partners we ensure that when a tree is harvested, new ones get planted. We secure sustainable supply of raw materials for our units and a supply of renewable products for our customers. We have PEFC and FSC based risk assesments and wood tracing systems in place. Risk assesments are up dated at least once per year. Metsä Board is closely following market signals to detect if any drastic changes are expected in customer behaviour and demand. Metsä board assesses risks on different levels – Group, Business Area and production unit, which also cover supplier operations. At the Group and Business Area-levels, risks are assessed twice a year – one assessment for risks related to Business Areas’ strategies and one for risks related to annual planning. Insurance companies perform technical risk surveys at major production units annually focusing on key property damage and business interruption risks. Our risk assessment management covers the whole value chain from securing the availability of wood to being prepared for possible product liability cases. Risk assessments also cover the entire value chain including all five Business Areas. Our focus on risk management is on preventive damage and loss control. One of the most important tasks of risk management is to ensure undisturbed operations and continuous production, which supports the environmental risk management at the same time. An essential part of Metsä Board’s enterprise risk management is the active co-operation with insurance industry. The major hazard risks such as fires, machine breakdowns and environmental damages, are covered by global insurance policies by insurance companies. Key insurance policies are property damage and business interruption policy as well as general third party and product liability insurance. The centralised environmental risk management is also one of the means to mitigate accidental releases by making use of knowledge transfer within the company. included Sweden, the Baltic countries and Russia. The origin of wood is verified bymeans of the PEFC® and FSC® certified Chain of Custody tracing method managed by the Metsä Group’s wood supply organisation. Metsä Group’s wood supply meets the EU’s Timber Regulation requirement. | No risk | Global over-consumption has led to climate change, polarisation of water resources globally and an unsustainable use of natural resources such as deforestation and water scarcity. Changes in consumption habits to favour renewable and sustainable products also endorse Metsä Group’s mission of promoting bioeconomy and sustainable bio-based products. Wood as a continuously renewable and recyclable raw material offers good growth opportunities for businesses focusing onrenewable packaging solutions, hygiene products and wooden constructions, among others. Our main operating countries have vast forest and water resources, and since we use them responsibly, they will be available for generations to come. Additionally, the forest industry is a global benchmark for resource efficiency. We continue to invest significantly into making our processes more material efficient. With our knowhow and skilled personnel, we turn wood – an endlessly renewable resource – into safe and recyclable products sustainably. One of Metsä Group’s main assets is that it covers the whole value chain from forest operations to the wood industry and pulp production all the way to board and tissue manufacturing. | No risk | Several paper companies have faced reputational losses due to illegal operations in wood procurement. However, all wood used by Metsä Board is traceable and comes from sustainable managed forests. PEFC and FSC Chain of Custodies requires detailed risk evaluation process and these due diligence system report are publicly available. Forest certification is a voluntary system which supports the well-being of forests and confirms the legal origin of the wood. Forest certification is based on an inspection carried out by an independent third party, and it consists of two parts: forest certification and certification of the chain of custody. Forest certification helps to demonstrate to the buyers of wood and paper products that the decision to purchase supports sustainable forestry. Metsä Group supports forest certification that is suitable for local conditions and inspected by a reliable and independent third party. We also actively promote forest certification initiatives in the whole wood supply region.Metsä Board fulfils the obligations of the European Union Regulation No 995/2010 (EU Timber regulation) and US Lacey Act, which prohibit the placing and trading of illegally harvested timber and timber products on the market. | Material risk | Demand for forest biomass is increasing, particularly for energy production. This may present challenges to today’s forest products as the availability of wood is under threat due to government subsidies being granted to direct energy uses of wood. This may disturb the competition on the raw material markets. in addition due to the remote location of Finland and the structure of its economy, the need for energy and transportation is higher than the average in Europe. As Finland is completely dependent on maritime transport, any increases in the cost of energy and transportation resulting from climate change and energy policies can considerably weaken the relative competitiveness of its energy intensive industries in relation to the EU and external competitors. Deforestation and illegal loggings are seen as the most important challenges.Only about 9 % of world's forests are certified according to forest certication schemes. Also challenge is to increase total area of certified forests in areas that have low certification rates. Demand for certified products is much bigger that availability in the markets. Although amount of certified raw material in Metsä Group already on very high level, we constantly are looking for ways to increase amount of certified raw materials in our supply chain. In November, Metsä Group together with other world’s leading forest product companies released a leadership statement that commits to sustainable forest management. Metsä Group is a member of the World Business Council for Sustainable Development (WBCSD), and a core member in WBCSD’s Forest Solutions Group where it also held a co-chair position. The Group seeks to ensure that the supply of independently verified sustainable wood and other forest products continues to increase to meet the growing demand also in the future. Altogether, 26 companies – responsible for nearly 40% of annual global forest, paper and packaging sales – have committed to the statement. | |
| 172 | 2013 | Millennium & Copthorne Hotels | United Kingdom | Timber | Partial | Our procurement teams continue to work on sustainability initiatives within the supply chain. Within the European region, a supplier evaluation matrix is used as a basis for approving or rejecting suppliers. The matrix requests suppliers to identify whether their company has a formal system to identify the point of origin of Forest Risk Commodities, specifically those products which contain timber, palm oil, bio fuels, beef or soya). | No risk | No risk | No risk | ||||
| 173 | 2013 | Millennium & Copthorne Hotels | United Kingdom | Palm Oil | Partial | Our procurement teams continue to work on sustainability initiatives within the supply chain. Within the European region, a supplier evaluation matrix is used as a basis for approving or rejecting suppliers. The matrix requests suppliers to identify whether their company has a formal system to identify the point of origin of Forest Risk Commodities, specifically those products which contain timber, palm oil, bio fuels, beef or soya). | No risk | No risk | No risk | ||||
| 174 | 2013 | Millennium & Copthorne Hotels | United Kingdom | Cattle Products | Partial | Our procurement teams continue to work on sustainability initiatives within the supply chain. Within the European region, a supplier evaluation matrix is used as a basis for approving or rejecting suppliers. The matrix requests suppliers to identify whether their company has a formal system to identify the point of origin of Forest Risk Commodities, specifically those products which contain timber, palm oil, bio fuels, beef or soya). | No risk | No risk | No risk | ||||
| 175 | 2013 | Millennium & Copthorne Hotels | United Kingdom | Soy | Partial | Our procurement teams continue to work on sustainability initiatives within the supply chain. Within the European region, a supplier evaluation matrix is used as a basis for approving or rejecting suppliers. The matrix requests suppliers to identify whether their company has a formal system to identify the point of origin of Forest Risk Commodities, specifically those products which contain timber, palm oil, bio fuels, beef or soya). | No risk | No risk | No risk | ||||
| 176 | 2014 | Millennium & Copthorne Hotels | United Kingdom | Timber | Partial | Our procurement teams continue to work on sustainability initiatives within the supply chain. Within the European region, a supplier evaluation matrix is used as a basis for approving or rejecting suppliers. The matrix requests suppliers to identify whether their company has a formal system to identify the point of origin of Forest Risk Commodities, specifically those products which contain timber, palm oil, bio fuels, beef or soya). | No risk | No risk | No risk | ||||
| 177 | 2014 | Millennium & Copthorne Hotels | United Kingdom | Palm Oil | Partial | Our procurement teams continue to work on sustainability initiatives within the supply chain. Within the European region, a supplier evaluation matrix is used as a basis for approving or rejecting suppliers. The matrix requests suppliers to identify whether their company has a formal system to identify the point of origin of Forest Risk Commodities, specifically those products which contain timber, palm oil, bio fuels, beef or soya). | No risk | No risk | No risk | ||||
| 178 | 2014 | Millennium & Copthorne Hotels | United Kingdom | Cattle Products | Partial | Our procurement teams continue to work on sustainability initiatives within the supply chain. Within the European region, a supplier evaluation matrix is used as a basis for approving or rejecting suppliers. The matrix requests suppliers to identify whether their company has a formal system to identify the point of origin of Forest Risk Commodities, specifically those products which contain timber, palm oil, bio fuels, beef or soya). | No risk | No risk | No risk | ||||
| 179 | 2014 | Mondi PLC | United Kingdom | Timber | Yes | A Group-wide risk management framework ensures the effective governance of material risks, which are those with the potential to have an impact on the achievement of commitments or strategic plans. The Boards are responsible for establishing and maintaining an effective system of internal control. Regular management reporting provides a balanced assessment of key risks and controls and is an important component of the Boards’ assurance. Our Sustainable Development Risk and Change Management Standard guides the ways in which sustainable development risks are identified and managed, while our sustainable development risk register is updated annually to ensure mitigation plans are in place for those risks with a high likelihood of occurrence and/or impact potential. Risks include both inherent operational risks as well as strategic risks. In addition to the key impacts on our business and our stakeholders, we identify sustainability trends and opportunities and seek to mitigate risks that affect our longer-term prospects and financial performance. Risk management is one of the internal processes that have informed the identification of our six material sustainability issues, and the commitments we have set to monitor and improve our performance within these. We exercise due diligence prior to the introduction of new practices, processes and products. Our Sustainability Screening Tool has been developed to identify sustainability risks as part of business change, rather than on going management of assets or operation. The Mondi ‘Requirements for the Procurement of Wood, Virgin Fibre, Biomass and Finished Product’ is a mandatory guide for procuring wood, virgin fibre (including pulp), biomass and fibre-based finished product used in Mondi’s paper and pulp production. The procedure defines a risk based process for ensuring long-term legally and sustainably harvested wood/fibre supplies. The application of the procedure applies to all wood, virgin fibre and fibre-based product supplies and suppliers. | Non-material risk | The new EU Timber Regulations for harvested wood products and the US Lacey Act are strong incentives to ensure procurement from responsible sources | Material risk | In the short to medium term, loss of access to credible resources due to loss of certification as a result of unsustainable forestry practices, manifold external scrutiny of plantation forests and the harvesting of natural forests is a risk to our industry. However, Mondi is sourcing sustainably and is therefore not exposed to the risk of sourcing from controversial sources in its daily management. Mondi also has in place chain-of-custody requirements for all wood consuming operations. More information on Mondi's risks and mitigation measures can be found on pages 12-13 and pages 28-31 of the Mondi integrated Report 2013. | Material risk | In the short to medium term, loss of access to credible resources due to loss of certification as a result of unsustainable forestry practices, manifold external scrutiny of plantation forests and the harvesting of natural forests is a risk to our industry. However, Mondi is sourcing sustainably and is therefore not exposed to the risk of sourcing from controversial sources in its daily management. Mondi also has in place a chain-of-custody requirement for all wood consuming operations. More information on Mondi's risks and mitigation measures can be found at: http://integrated-report.mondigroup.com/2012/performance/risk-management-and-internal-control | |
| 180 | 2014 | Morrison Supermarkets | United Kingdom | Timber | Yes | Risk assessment based on materiality, likelihood and consequence to the business. | Material risk | Material risk | Material risk | ||||
| 181 | 2014 | Morrison Supermarkets | United Kingdom | Palm Oil | Yes | Risk assessment based on materiality, likelihood and consequence to the business. | Material risk | Material risk | Material risk | ||||
| 182 | 2014 | Morrison Supermarkets | United Kingdom | Cattle Products | Yes | Risk assessment based on materiality, likelihood and consequence to the business. | Material risk | Material risk | Material risk | ||||
| 183 | 2014 | Morrison Supermarkets | United Kingdom | Soy | Yes | Risk assessment based on materiality, likelihood and consequence to the business. | Material risk | Material risk | Material risk | ||||
| 184 | 2014 | Morrison Supermarkets | United Kingdom | Biofuels | Yes | Risk assessment based on materiality, likelihood and consequence to the business. | Material risk | Material risk | Material risk | ||||
| 185 | 2013 | National Grid | United Kingdom | Timber | Partial | Across our business risks are identified using a number of approaches, including consideration of risk categories using the same risk assessment criteria as the corporate risk assessment process. Timber products used in US electricity transmission operations - negligible business risk at any level - Timber products used in UK construction operations - negligible business risk at any level Paper and card used in the UK and US - negligible business risk at any level Timber and paper/card used in packaging - negligible business risk at any level | No risk | No | Non-material risk | Some risk but of limited scope for this business | No risk | No | |
| 186 | 2013 | National Grid | United Kingdom | Biofuels | Partial | Across our business risks are identified using a number of approaches, including consideration of risk categories using the same risk assessment criteria as the corporate risk assessment process Biofuels purchased for US fleet vehicles in B20 - required by regulation so some business risk but which can be acceptably managed. | Non-material risk | EPACT | Non-material risk | Risks related to regulatory non-compliance | No risk | No | |
| 187 | 2014 | National Grid | United Kingdom | Timber | Partial | Across our business risks are identified using a number of approaches, including consideration of risk categories using the same risk assessment criteria as the corporate risk assessment process. Timber products used in US electricity transmission operations - Recognised as a business risk but negligible to low risk given effective controls and governance in place. Timber products used in UK construction operations - negligible business risk at any level Paper and card used in the UK and US - negligible business risk at any level Timber and paper/card used in packaging - negligible business risk at any level. | Non-material risk | The Lacey Act, National and state regulations , EU and UK regulations | Non-material risk | This is recognised as a potential reputational risk but considered low | Non-material risk | We ensure that our supply base is adequately resilient to ensure continuity of supply; we also work to develop innovative and alternative ways of working which reduce our supply chain risk. | |
| 188 | 2014 | National Grid | United Kingdom | Biofuels | Partial | Biofuels purchased for some US fleet vehicles has biofuel constituent (B20) business risk limited to availability at point of sale which can be acceptably managed. | Non-material risk | EPACT, Federal Energy Policy Act | Non-material risk | This is recognised as a potential reputational risk but considered low | Non-material risk | As above | |
| 189 | 2013 | Natura Cosmeticos SA | Brazil | Timber | Yes or 100% third party certified raw materials already achieved | Essa materia prima tem impacto na imagem da nossa marca e na continuidade da produção de revistas, caixas de entrega, embalagens e revistas Natura (catálogo). | No risk | Produto certificado | No risk | Certificado FSC | No risk | Volume disponível de material certificado FSC | |
| 190 | 2013 | Natura Cosmeticos SA | Brazil | Palm Oil | Yes or 100% third party certified raw materials already achieved | Essa materia prima tem impacto na imagem da nossa marca e na continuidade da produção de sabonetes. | No risk | Produto certificado | No risk | Volume disponível de material certificado RSPO | No risk | Volume disponível de material certificado RSPO | |
| 191 | 2013 | Natura Cosmeticos SA | Brazil | Biofuels | Yes or 100% third party certified raw materials already achieved | Essa materia prima tem impacto na imagem da nossa marca e na continuidade da produção de itens de perfumaria. | No risk | Produto certificado | No risk | Certificado IBD Orgânico | No risk | Volume disponível de material certificado IBD | |
| 192 | 2014 | Natura Cosmeticos SA | Brazil | Timber | Partial | Essa materia prima tem impacto na imagem da nossa marca e na continuidade da produção de revistas, caixas de entrega, embalagens e revistas Natura (catálogo) e sacolas. Como forma de mitigação deste risco, busacamos fornecedores com certificação FSC, sistema que reconhece a produção responsável de produtos floresta (aspecto ambiental e social). A gestão de riscos da Natura é um instrumento integrado ao ciclo de planejamento estratégico e considera os aspectos econômico, social e ambiental, dentro de dois principais grupos: os estratégicos, aqueles capazes de afetar a ambição de negócio e a continuidade da empresa; e os operacionais, que avaliam nossos processos internos. Temos um dicionário de riscos que contempla temas estratégicos, regulatórios, financeiros e operacionais. Assim, ainda que não tenhamos uma análise específica dos efeitos associados a timber e palm oil no processo de gestão de risco, projetos de mitigação socioambientais importantes da empresa estão voltados aos impactos que o nosso negócio pode gerar e que se tornaram subprocessos formais na companhia, como o Programa Carbono Neutro e as nossas práticas de uso sustentável da sociobiodiversidade e do conhecimento tradicional associado. Todo esse processo se mantém conectado aos planos de ação para mitigação de riscos e é acompanhado pelos executivos de nosso Comitê Executivo. | Material risk | No Brasil, entendemos que os principais riscos estão associados ao Código Florestal e a Lei de n. 11.105/2005, que estabelece normas de segurança e mecanismosde fiscalização de atividades que envolvam organismos geneticamente modificados, são as regulamentações mais relevantes para esta commodite. Apresentamos uma área voltada para Relações Governamentais, responsável por monitorar o ambiente regulatório e politicas publicas que impactam positivamente e negativamente os negócios da Natura. A NATURA apoia a discussão e o debate público de temas relevantes para o bem comum da sociedade e para seu desenvolvimento sustentável apoiando a viabilização de soluções e alternativas nos marcados em que atua. Para isso encaminha a defesa de seus pleitos prioritariamente através das associações e entidades de classe, em conjunto com outras empresas, priorizando as soluções coletivas e através de representantes habilitados da própria empresa. | Material risk | Entendemos que como compradores de papel e celulose, podemos de forma indireta estar vunerável a perda de reputação por causa da introdução de espécies exóticas, biotecnologia e desmatamento. A industria papeleira apresenta oo desafio de comunicar da melhor forma qualquer impacto de seus produtos no meio ambiente, principalmente aqueles relacionados a espécies exóticas, biotecnologia ou expansão das plantações. Acreditamos que a certificação socioambiental (como FSC) e protocolos setorais são alterantivas para a mitigação deste risco. | Non-material risk | Em 2013 não encontramos risco operacional em nossa compra de papel e celulose. Compramos insumos certificados FSC (em sua maior parte) e de fontes controladas. A certificação FSC além da rastrabilidade (cadeia de custodia) avalia técnicas de manejo sustentatável, potenciais impactos ambientais, atributos de alto valor de conservação e questões sociais como treinamento, respeito a legislação trabalhista. impactos na comunidade de entorno. | |
| 193 | 2014 | Natura Cosmeticos SA | Brazil | Palm Oil | Partial | A gestão de riscos da Natura é um instrumento integrado ao ciclo de planejamento estratégico e considera os aspectos econômico, social e ambiental, dentro de dois principais grupos: os estratégicos, aqueles capazes de afetar a ambição de negócio e a continuidade da empresa; e os operacionais, que avaliam nossos processos internos. Temos um dicionário de riscos que contempla temas estratégicos, regulatórios, financeiros e operacionais. Assim, ainda que não tenhamos uma análise específica dos efeitos associados a timber e palm oil no processo de gestão de risco, projetos de mitigação socioambientais importantes da empresa estão voltados aos impactos que o nosso negócio pode gerar e que se tornaram subprocessos formais na companhia, como o Programa Carbono Neutro e as nossas práticas de uso sustentável da sociobiodiversidade e do conhecimento tradicional associado. Todo esse processo se mantém conectado aos planos de ação para mitigação de riscos e é acompanhado pelos executivos de nosso Comitê Executivo. Além disto, temos compromisso assumidos com a produção do óleo de palma sustentável, como membros da RSPO e exigimos o mesmo dos nossos fornecedores. | Material risk | No Brasil, entendemos que os principais riscos estão associados ao Código Florestal. Apresentamos uma área voltada para Relações Governamentais, responsável por monitorar o ambiente regulatório e politicas publicas que impactam positivamente e negativamente os negócios da Natura. O relacionamento com agentes públicos, representações diplomáticas e entidades de classe deverá ser contínuo, transparente e apartidário, seguindo os princípios de respeito à legalidade, impessoalidade, moralidade, publicidade e eficiência. A NATURA apoia a discussão e o debate público de temas relevantes para o bem comum da sociedade e para seu desenvolvimento sustentável apoiando a viabilização de soluções e alternativas nos marcados em que atua. Para isso encaminha a defesa de seus pleitos prioritariamente através das associações e entidades de classe, em conjunto com outras empresas, priorizando as soluções coletivas e através de representantes habilitados da própria empresa. | Material risk | Entendemos que como compradores óleo de palma e seus derivados, podemos estar vunerável a perda de reputação por causa desmatamento e questões trabalhistas realacionados ao plantio da palma. Acreditamos que a certificação RSPO e protocolos setorais são alterantivas para a mitigação deste risco. Por isto temos compromisso com a RSPO em promover o uso do óleo de palma sustentável. | Non-material risk | Em 2013 não encontramos risco operacional em nossa compra de óleo de palma e seus derivados. O volume comprado diretamente pela Natura é de fornecedores comprometidos com a produção do óleo de palma sustentável. | |
| 194 | 2013 | Neste Oil Oyj | Finland | Palm Oil | Yes or 100% third party certified raw materials already achieved | Prior to entering the biofuel area, Neste Oil conducted a profound assessment of palm oil related risks. The major outcomes are reflected nowadays in the purchasing and operating principles and instructions of the company, but can be summarised as follows: 1 Companies that were ready to commit to sustainability were a small minority of all the suppliers - a careful Due Diligence process had to be established to screen suitable partners 2 Lacking traceability in the product chain - need to create a totally new way of palm oil trading. Traders and middle-men were passed by and contacts developed directly to the grower companies. 3 Obvious reputational risks were foreseen based on the campaigning that was ongoing - full support to RSPO to promote sustainable practises 4 (regarding all the vegetable oils) a major risk of uncontrolled expansion of the cultivation, increasing deforestation risks - need to set strict sustainability requirements for the supply, with specific clauses in the agreements. Direct physical risk: insignificant, as all suppliers comply with criteria, are traced back and monitored. Indirect risk is relevant, as Neste Oil is currently a major user of palm oil. Regulatory risk: biofuel industry is applying the most stringent sustainability criteria that are not expected to be changed as such; the ILUC may provide uncertainty to general acceptance of palm oil based products. Reputational risks are significant, as irresponsible expansion of palm oil cultivation may cause severe negative impacts - which are often linked to biofuels rather than the main uses, i.e. food and oleochemical industries. | Material risk | The European RED directive mentioned earlier requires complete awareness on the origins of the raw materials in order to be eligible for biofuel status within the scope of the directive. - The European ILUC discussion is, however, focusing very much on palm oil, and in particular its use for biofuel production. The final proposal will be released within weeks, and further handling in the European Parliament is expected to continue to the end of 2013. In the original proposal, the indirect land use risk was capped by introducing crop and non-crop baskets for biofuels raw materials. Final decision remains to be seen. In the USA, the pathway approval according to RFS2 is still pending in the US EPA. | Material risk | The expansion of oil palm cultivation creates a most significant risk if the additional land use is done in a non-responsible way. Even though the palm oil used by us is traceable, certified and truly sustainable, the use for producing biofuels can be questioned based on the indirect land use change (ILUC), which is caused by all the activites causing changes in the land use. Expansion of agriculture is a major contributor to deforestation, calling for clear and well implemented sustainability requirements for all uses of palm oil, and other vegetable oils as well. Biofuel business has been made a scapegoat for uncontrolled expansions of agricultural land. Based on the reputation fuelled by NGO activism, some customers may prefer other raw materials. | Non-material risk | The availability of sustainably produced oil may be a risk in the future, if the growers direct their marketing to less sustainability-conscious markets and drop out their certifications. The RSPO has submitted their application for recognition of the RSPO certificate as a RED compliant voluntary scheme. As the approval has been granted very recently in the EC. Meanwhile, we have started using ISCC certificates to provide access to the European markets. The ISCC is basically providing the same proof as the RSPO in the forest risk issues. Currently, we have been able to purchase sufficient, sustainability-certified volumes for our biofuel production. Our feedstock flexibility limits efficiently the operational risks. | |
| 195 | 2013 | Neste Oil Oyj | Finland | Cattle Products | Yes or 100% third party certified raw materials already achieved | In the context of biofuel raw material sourcing, the residual streams of beef production (and animal husbandry in general) are typically classified as waste or residue, as these materials (e.g. rendered animal fat) are not deliberately produced and are not the primary aim of the process. Waste animal fat production is increasing along the consumption of meat as a result of global dietary patterns. Physical, regulatory and reputational risks are minor, although the increase in cattle herding may result in grazing areas causing risks to forests. | Non-material risk | Waste animal fat from the food industry does not contain the same type of direct risks as the beef and leather production, but there is a loose connection to those, although nobody is producing waste fats on purpose. The demand remains low for animal fats in general and low quality fats (not intended for human consumption) in particular, thus provides the opportunity for value-added conversion into high-quality traffic-fuel production, rather than e.g. simply incinerating the mass in the power plant. Most regulatory environments are in favour of using residual and waste streams for biofuel production. In the US market, the specified pathways have to be defined in order to gain eligibility for biofuel status. Additionally, separate food waste management plan has to be approved for waste or residue streams by the US EPA. | Non-material risk | Ref question 11.1, the indirect risks related to use of residue streams of animal husbandry may become more significant in the long run, if the expansion of grazing happens in a non-controlled way. However, the key issue is the global change in dietary patterns shifting towards more meat instead of vegetables. | Non-material risk | Waste animal fat has been a low-value stream very few operators have been interested in. Using animal fat as biofuel feedstock is an added value solution to big animal fat volumes currently under-utilised. Increasing demand may introduce limited operational risks. | |
| 196 | 2013 | Neste Oil Oyj | Finland | Soy | Yes or 100% third party certified raw materials already achieved | Soybean oil has to great extent the same risks and challenges as palm oil, added with GMO issues. Our assessment of soy bean oil supply contained e.g. continent specific reviews. So far, Neste Oil has used soybean oil for test runs only. Should the use increase, all the supplier selection and sustainability criteria would be applied. Roundtable on Responsible Soy (RTRS) provides a suitable platform to share views and engage with soy producers. Primary reason for soybean cultivation is protein production for feed and food. Oil is a co-product. Direct physical risk: insignificant, as all suppliers have to comply with criteria, are traced back and monitored. Indirect risk is minor, as Neste Oil has used soy bean oil for test runs only, and is not is currently using soy bean oil. Regulatory risk: biofuel industry is applying the most stringent sustainability criteria that are not expected to be changed as such; the ILUC may provide uncertainty to general acceptance of soy bean oil based products. Reputational risks are moderate, as irresponsible expansion of soy bean cultivation may cause severe negative impacts - which are often linked to biofuels rather than the main uses, i.e. food and feed industries. | Material risk | The European RED directive mentioned earlier requires full knowledge on the origins of the raw materials to be approved within the scope of the regulation. So far, minor volumes of soy has been used, but the same regulatory risks are there, as well. If the ILUC factor would be introduced, it would effectively limit the use of soy brean oil for biofuel production. For the US market, outside US produced soy requires more detailed records and book-keeping than domestic production. | Material risk | The expansion of soya bean cultivation creates a most significant risk if the additional land use is done in a non-responsible way. The land-use efficiency of soy is insufficient, although it is mainly cultivated for feeding purposes. Soy cultivation has been linked to rainforest destruction directly or indirectly, thus being a potential reputational risk, if used in large amounts for biofuels. | Non-material risk | The availability of sustainably produced oil may be a risk in the future, if we start using soy, and if the certification programme (RTRS) is not progressing according to plans. Especially, the traceability of soy beans may be problematic. As our use has been minimal, non-material operational risks exist. | |
| 197 | 2013 | Neste Oil Oyj | Finland | Biofuels | Yes or 100% third party certified raw materials already achieved | Neste Oil buys certified ethanol for manufacturing 95 E10 and 98 E5 gasoline grades. Global ethanol supply is well established and based on several suppliers, enabling stabile availability of acceptable products. Therefore, risks are less significant than e.g. with palm oil. | Non-material risk | Ethanol production has been concentrating in North and South America, mainly in Brazil and the USA. Both countries have well established agricultural land use controls in place. Therefore, taking into account the limited ethanol volumes Neste Oil uses in order to fulfill domestic gasoline mandates, and diverse sourcing options in the world ethanol market, the regulatory risks can be regarded as non-material. | Non-material risk | The production of ethanol, especially sugar cane based may create a significant risk if the additional land use is done in a non-responsible way. Corn and wheat as raw materials are sharing the same concerns as any large-scale cultivation. Novel processes, such as entzymatic ligno-cellulosic ethanol are in the ramping-up phase. As the penetration of ethanol in the global gasoline pool is so wide, the reputational risk can be regarded as non-metrial. | Non-material risk | The availability of RED compliant ethanol in the future may create an operational risk. On the other hand, there are several countries and companies involved in the ethanol business, which may decrease the risk on the longer run. | |
| 198 | 2014 | Neste Oil Oyj | Finland | Palm Oil | Yes | Prior to entering the biofuel area, Neste Oil conducted a profound assessment of palm oil related risks; and we found that the current palm oil trade would need further assurance and an entirely different mechanism for us to ensure risk assessment, traceability and certification. The major outcomes are reflected currently in the purchasing and operating principles and instructions of the company, but can be summarised as follows: 1 There was a need to ensure that companies in the supply chain are willing to disclose and commit to sustainability targets - a careful Due Diligence process had to be established to screen suitable partners and ensure transparency 2 There was a need to build and ensure traceability in the supply chain - need to create a totally new way of palm oil trading. Traders and middle-men were by-passed by and contacts developed directly to the growers of oil palms. 3 Obvious reputational risks were foreseen based on the campaigning that was ongoing - full support to RSPO, especially their grievance mechanism practices, to promote sustainable practises 4 (regarding all the vegetable oils) a major risk of uncontrolled expansion of the cultivation, increasing deforestation risks - need to set strict sustainability requirements for the supply, with specific clauses in the agreements. Direct physical risk: insignificant, as all suppliers comply with criteria, are traced back and monitored. Indirect risk is relevant, as Neste Oil is currently a major user of palm oil. Regulatory risk: biofuel industry is still currently the most regulated industry using palm oil (EU Renewable Energy Directive, Fuel Quality Directive and the US Renewable Fuel Standard) with the most stringent sustainability criteria that are not expected to be changed as such. However the debate over possible ILUC-emission risks may provide uncertainty to general acceptance of palm oil based products. Reputational risks are significant, as irresponsible expansion of palm oil cultivation may cause severe negative impacts - which are often linked to biofuels rather than the main uses, i.e. food and oleochemical industries; even though admittedly food industry remains the biggest user of palm oil products. | Material risk | For all please see: http://2013.nesteoil.com/sustainability/neste-oil-sustainable-way/vastuullinen-toimitusketju/legislation-and-market-requirements/. The European RED directive mentioned earlier requires complete awareness on the origins of the raw materials in order to be eligible for biofuel status within the scope of the directive. - The European ILUC discussion is, however, focusing very much on palm oil, and in particular its use for biofuel production. Currently it has been decided that discussions will be included in the FQD only in 2016. In the original proposal, the indirect land use risk was capped by introducing crop and non-crop baskets for biofuels raw materials. Final decision remains to be seen. In the USA, the pathway approval for CPO makes it ineligable for the higher RIN classification, however some arguments on the classification of palm oil residues such as PFAD is still continuing. | Material risk | Palm Oil in general is a reputation risk due to the issues raised by NGOs and other stakeholders related to deforestation and other social issues. Massive expansions due to palm oil and other industries in developing countries have given a bad name to oil palm cultivation in general, and thus it is a constant challenge for us to differentiate ourselves from other players by using certified and traceable palm oil. Biofuel industry has been blamed - despite the smaller use compared to the consumer goods manufacturers - of driving demand and expansion. Expansion of agriculture is a major contributor to deforestation, calling for clear and well implemented sustainability requirements for all uses of palm oil, and other vegetable oils as well. Biofuel business has been made a scapegoat for uncontrolled expansions of agricultural land. | Non-material risk | The availability of sustainably produced palm oil might be of risk, if government and markets start restricting the available palm oil markets. This would cause palm oil suppliers to sell their products to less demanding markets with no sustainability requirements. Neste Oil has been promoting the certification systems and assisting our suppliers and relevant government meet the market demand. We believe our efforts have made possible the availability of certified palm oil for sufficient purchase to date. Our feedstock flexibility, i.e. more than 10 suitable feedstocks, limits efficiently the operational risks. | |
| 199 | 2014 | Neste Oil Oyj | Finland | Cattle Products | Yes | In the context of biofuel raw material sourcing, the residual streams of beef production (and animal husbandry in general) are typically classified as waste or residue. This is based on the fact that these materials (e.g. animal fat not intended for human consumption) are not deliberately produced and are not the primary aim of the process. Waste animal fat production is increasing along the consumption of meat as a result of global dietary patterns. Physical, regulatory and reputational risks are minor, although the increase in cattle herding may result in grazing areas causing risks to forests. However Neste Oil ensures traceability to the rendering plants where the fats are processed. | Non-material risk | Waste animal fat not intended for human consumption from the food industry does not contain the same type of direct risks as the beef and leather production, but there is a loose connection to those, although in practice no farming and meat processing industry is producing non-edible waste fats on purpose. The demand within the other industries such as the food industry remains low for animal fats in general and low quality fats (not intended for human consumption) in particular, thus provides the opportunity for value-added conversion into high-quality traffic-fuel production, rather than e.g. simply incineration in the power plant. Most regulatory regimes are in favour of using residual and waste streams for biofuel production; however in some other markets challenges still remain (Germany). In the US market, the specified pathways have to be defined in order to gain eligibility for biofuel status. Additionally, separate food waste management plan has to be approved for waste or residue streams by the US EPA. | Non-material risk | Cattle production, as stated is not driven by the production of fat. Thus the risks would relate to the cattle farming industry in general; increasing grazing areas for example. The indirect risks related to use of residue streams of animal husbandry may become more significant in the long run, if the expansion of grazing happens in a non-controlled way. | Non-material risk | Waste animal fat has been a low-value stream very few operators have been interested in. Using animal fat as biofuel feedstock is an added value solution to big animal fat volumes currently under-utilised. Increasing demand may introduce limited operational risks. | |
| 200 | 2014 | Neste Oil Oyj | Finland | Soy | Yes | Soybean oil has to a great extent the same risks and challenges as palm oil, added with GMO issues. Our assessment of soy bean oil supply contained e.g. continent and region-based specific reviews. So far, Neste Oil has used soybean oil for test runs only. Should the use increase, all the supplier selection and sustainability criteria would be applied. Roundtable on Responsible Soy (RTRS, Neste Oil a member since 2006?) provides a suitable platform to share views and engage with soy producers. Primary reason for soybean cultivation is protein production for feed and food. Oil is a co-product. Direct physical risk: insignificant, as all suppliers have to comply with criteria, are traced back and monitored. Indirect risk is minor, as Neste Oil has used soy bean oil for test runs only, and is not currently using soybean oil. Regulatory risk: biofuel industry is still currently the most regulated soy-using industry globally (EU Renewable Energy Directive, Fuel Quality Directive and the US Renewable Fuel Standard) with the most stringent sustainability criteria that are not expected to be changed as such. However the debate over the risk of ILUC-emissions may provide uncertainty to general acceptance of soy bean oil based products. Reputational risks are moderate, as irresponsible expansion of soy bean cultivation may cause severe negative impacts - which are often linked to biofuels rather than the main uses, i.e. food and feed industries; even though admittedly food remains the biggest user of soybean oil products. | Material risk | The European RED directive mentioned earlier requires full knowledge on the origins of the raw materials to be approved within the scope of the regulation. So far, minor volumes of soy have been used, but the same regulatory risks are there, as well. For the US market, outside US produced soy requires more detailed records and book-keeping than domestic production. | Material risk | Although we are not buying any soy bean oil currently, if we were, the expansion of soya bean cultivation creates a most significant risk if the additional land use is done in a non-responsible way. The land-use efficiency of soy is insufficient, although it is mainly cultivated for feeding purposes. Soy cultivation has been linked to rainforest destruction directly or indirectly, thus being a potential reputational risk, if used in large amounts for biofuels. | Non-material risk | The availability of sustainably produced oil may be a risk in the future, if we start using soy, and if the certification programme (RTRS) is not progressing according to plans. Especially, the traceability of soy beans may be problematic. As our use has been minimal, non-material operational risks exist. |
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CDP’s forests program targets the largest companies globally, collecting data on their management of deforestation risk through the lens of key agricultural drivers of deforestation (timber, palm oil, soy, cattle products & biofuels). In 2015, 700 companies are requested to respond to the program. The request is issued on behalf of 298 investor signatories with $19 trillion in assets.
Dataset of risk data from respondents to CDP’s forests program in 2013 and 2014. Includes data on company risk assessment processes, as well as the reputational, regulatory and operational risks they identified. This dataset excludes private responders.
Please note that not all companies report on all forest risk commodities. This may be due to the company submitting a partial disclosure or because only a limited number of the commodities are relevant to their business.
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- 2013, 2014
- SODA2 Only
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