Environment has trumped business at Kellogg's which decided not to buy palm oil at the expense of rain forests. Palm oil, an additive used in a number of processed foods, is not a recommended substitute for trans fats according to research conducted by the USDA.
The processing of palm oil had come in for sharp criticism due to adverse effects on the environment, including deforestation, loss of natural habitats, and the increased emission of greenhouse gases.
Palm oil cultivation in Indonesia and Malaysia has wiped out over 30,000 acres of rain forest.
The company announced last week that purchases of palm oil would be restricted to companies that had been verified to protect the environment and save the rain forests. Kellogg's aims to achieve full compliance with the new standard by 2015. Palm oil is an ingredient in many of the company's products including Pop-Tarts, cookies, and waffles.
According to Green Century Capital Management, palm oil brings in about $50 million in revenue annually with its use in over half of the packaged foods on the market.
Kellogg's move comes on intense pressure from consumer groups around the world, and is expected to improve the survival chances of highly endangered animals like the Sumatran tiger and the orangutan in southeast Asia, and also provide a measure of protection to indigenous peoples in Indonesia, Malaysia, New Guinea, Latin America and west Africa who depend on tropical rainforests for a living.
The deforestation due to palm oil demand, has led to illegal land grabs, forest fires and social conflict in communities that have depended on forest resources for their livelihoods. The heavy loss of peat lands too had contributed in no small measure to the increase in climate change emissions.
According to a statement by the company, it would require its suppliers to "protect forests, endangered species habitat, lands with high carbon content, and peatland of any depth. Suppliers will also be required to protect human and community rights."
Kellogg's chief sustainability officer Celeste Clark said, while plam oil was a very small percentage of the ingredients, concerns about the sustainable production of palm oil were clearly on the company's radar screen.
The company's, brands including Corn Flakes, Rice Krispies, Special K and Pringles, are estimated to use about 50,000 tonnes of palm oil a year.
The company with sales of $14 billion annually, boasts manufacturing operations in 35 countries and sells food in over 180 countries.