Dive Brief:

• Nestlé plans to use satellite monitoring service to limit deforestation in its palm oil supply chain, according to a company release. 

• Starling satellite service, developed by Airbus and The Forest Trust, will monitor all of the company's global palm oil supply chain by the end of this year to provide high-resolution radar and satellite imagery documenting land cover changes and forest cover disturbances.

• The Swiss company said 63% of its global supply chain was deforestation-free as of last year, and it has committed to shifting all of its global products to that status by 2020.

Dive Insight:

The sustainability (or lack thereof) of palm oil is a growing concern for consumers and a tough issue for manufacturers who use the product. When rainforests are cleared and burned to plant oil palms, it destroys habitat for wildlife such as tigers, elephants and orangutans. Forest-dwelling people are also impacted, and deforestation creates greenhouse gas emissions, the World Wildlife Fund (WWF) said. 

Because of the ongoing controversy, a number of large food manufacturers have been seeking out sustainable sources and reducing their use of palm oil. 

Danone pledged to source 100% sustainable palm oil by 2015 and has reached that goal, according to the WWF, which keeps score. Other U.S. food makers making progress on the group's most recent palm oil scorecard were Conagra, Mars, Hershey, Unilever, General Mills, PepsiCo, Mondelez, Kraft Heinz and Kellogg. According to the scorecard, Nestlé, Smucker, Campbell and Tyson's Hillshire Brands still have work to do.

This satellite monitoring plan is one way for Nestlé to bolster its sustainability credentials by moving forward on responsible sourcing. According to Magdi Batato, executive vice-president and head of operations, the company has been working since mid-2016 on a pilot monitoring project in Malaysia. He called the satellite monitoring program "a game changer" to achieve supply chain transparency and said that Nestlé will extend it to pulp and paper supply chains in 2019.

This project could help Nestlé create meaningful improvements in its supply chain and boost its environmental profile at the same time. The company plans to be transparent about these changes by providing progress reports online. However, that means Nestlé will have to follow through with its commitments since consumers, investors, retailers and other stakeholders will be watching.

According to the Rainforest Action Network, Nestlé, Mars and Hershey have all broken their commitments to quit using palm oil sourced from rainforests. The group said last fall that major candy and snack manufacturers have deceived consumers by promising to clean up their supply chains, but these promises have been delayed, revised or watered down for too long.

There are alternatives to using palm oil, and while some of them are more expensive, some are much more sustainable. Algae produces about 70,000 pounds of oil per acre, for example, compared to palm oil’s 4,465 pounds per acre. For comparison, olives produce about 910 pounds per acre, and soybeans produce just 335.