The issues
In recent years heightened media attention and public debate have turned the spotlight on issues such as working conditions for growers and labourers, the environmental impacts of cultivating crops, the economic well-being of producer communities and animal welfare.
People are looking to companies to take responsibility for these issues in their supply chain. This is consistent with our own approach and the commitments we have made in our Code of Business Principles and Business Partner Code. Failure to act on these issues is not only an operational risk but can be a source of reputational damage.
Equally, changing weather patterns, water scarcity and unsustainable farming practices could have an impact on our business, by threatening the long-term sustainability of agricultural production. With agricultural raw materials being so important to our brands, we have a clear interest in ensuring the security of future supplies. In recognition of this we set up our Sustainable Agriculture Programme in 1995.
An evolving approach
Initially our focus was on working with our own growers to set standards and improve practice. Later we began engaging with other suppliers to scale up this work. Now, we are increasingly seeing the necessity of connecting this work more closely into our brand development and communicating it to our consumers.
An early example of the potential of this approach is Lipton's announcement to procure all its tea from sustainable, ethical sources, and to work with the Rainforest Alliance to certify our tea supply. This is the first time a major tea company has committed to introducing sustainably certified tea on such a scale and is built on our work in this area over the last 10 years. We are the world's largest purchasers of black tea, accounting for 12% of world volume. We expect our commitment to make a difference to the lives of over 2 million tea workers.
In May 2008 we also committed to buy all our palm oil from sustainable sources by 2015.
Linking our expertise to our brands
Our sustainable agriculture team has been an integral part of our Brand Imprint process. It has contributed its expertise on sustainability issues for our key crops, such as tomatoes, palm oil and tea, and has also assessed a number of other ingredients such as walnuts, coconuts, pineapple and strawberries, which we use in smaller quantities. This has provided our brand teams with valuable insights on supply-chain risks and opportunities.
