16 November 2020

Neste takes allegations on sustainability violations seriously

Credible allegations on suppliers’ sustainability violations always investigated

A study report produced by Profundo, commissioned by Milieudefensie, has been published on 5 November 2020. The report claims that Neste’s raw material suppliers have been involved in serious sustainability violations, such as deforestation, fires, peat destruction, community and labor rights violations.

Neste welcomes all efforts to monitor its raw material supply chains to ensure unwavering commitment to sustainability. Sustainably-produced renewable raw materials are needed to replace fossil oil use and to effectively combat climate change.

We acknowledge the fact that there are sustainability concerns linked to the palm oil industry. This is why we continuously monitor our supply chains with locally-operating organizations specialized in various areas of sustainability, e.g. deforestation. We transparently publish data on our palm oil and PFAD supply chains on our website to enable external experts to help in this work.

Neste has not yet been able to thoroughly familiarize itself with the report in question; hence we cannot comment on its specific claims. Based on our quick review, however, it seems that the report highlights some cases that have already been investigated and closed as the companies were not found to have been involved in the claimed actions.

The report also introduces some claims concerning our suppliers that are new to us. We will familiarize ourselves with the claims and start investigating those cases further. We will transparently publish information about the cases we are investigating or actively monitoring.

Proactive measures to mitigate sustainability risks

We are committed to sourcing only sustainably-produced raw materials which always meet the market-specific legal requirements. All our contracts with renewable raw material suppliers include strict terms on sustainability; e.g. commitment to sustainability, protecting biodiversity, and respecting human rights are requirements that must be met before a contract is signed. All our palm oil and PFAD suppliers are additionally required to be RSPO members, which holds them accountable to the RSPO Code of Conduct and enables RSPO complaints panel involvement for monitoring and seeking resolutions.

We take all allegations on suspected sustainability violations and shortcomings seriously and investigate the cases. Upon learning about credible serious allegations concerning our suppliers, we put all further purchases from those suppliers or supply chains on hold while we investigate the cases.

Our primary means of action is engagement and cooperation with our supplier to remediate the issue. This is because ending purchases does not resolve problems. We have a proven track record of collaborating with our suppliers and external sustainability organizations, such as locally-operating NGOs, to make a positive sustainability impact in the palm oil supply chain.

If the sustainability criteria and requirements included in our contracts with our suppliers have been verifiably breached and the nature of these is considered serious and progress to resolve those issues is not made in a reasonable time, we will terminate our contract with the supplier in question – which we have done also in the past.

 

Neste in brief

Neste (NESTE, Nasdaq Helsinki) creates solutions for combating climate change and accelerating a shift to a circular economy. We refine waste, residues and innovative raw materials into renewable fuels and sustainable feedstock for plastics and other materials. We are the world’s leading producer of renewable diesel and sustainable aviation fuel, developing chemical recycling to combat the plastic waste challenge. We aim at helping customers to reduce greenhouse gas emissions with our renewable and circular solutions by at least 20 million tons annually by 2030. As a technologically advanced refiner of high-quality oil products with a commitment to reach carbon-neutral production by 2035, we are also introducing renewable and recycled raw materials such as waste plastic as refinery raw materials. We have consistently been included in the Dow Jones Sustainability Indices and the Global 100 list of the world’s most sustainable companies. In 2019, Neste’s revenue stood at EUR 15.8 billion, with 82% of the company’s comparable operating profit coming from renewable products.

Source: Neste, press release, 2020-11-05.

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