New York State Comptroller Thomas P. DiNapoli has announced that Safeway Inc. — the second largest grocery chain in the U.S. — has agreed to give preference to suppliers of 100% verified sustainable palm oil and set a goal of using only sustainable palm oil in all of its Safeway-brand products.  As a result of the company’s new policy, the New York State Common Retirement Fund (the Fund) has withdrawn its sustainable palm oil shareholder proposal. The Fund held 2,413,562 shares of Safeway with a market value of $63,597,359 as of the end of the state fiscal year March 31, 2013.

“Safeway is sending a strong message to its suppliers that safeguarding the environment is a business priority,” DiNapoli said. “Shoppers don’t see where the palm oil used in hundreds of products comes from, but often it’s harvested in ways that destroy rainforests and leads to climate change. Safeway’s new policy protects the company and its shareholders from reputational harm associated with environmental destruction.”

Harvesting palm oil from unsustainable sources has been linked to deforestation — the cause of an estimated 20 percent of global greenhouse gas emissions, the destruction of rain forests and the promotion of climate change — all of which can cause reputational and operational damage to companies in the supply chain.  

DiNapoli’s agreement was applauded by the Rainforest Action Network, which has engaged with Safeway for several years with a goal of increasing the company’s use of sustainable palm oil.

“Safeway has made a bold move by publicly committing to eliminate Conflict Palm Oil from its supply chain, which will reduce the company’s environmental and social impact,” said Ginger Cassady, program director at Rainforest Action Network. “By directly engaging its suppliers to tackle the urgent issue of rainforest destruction, Safeway will ensure that its values are upheld throughout its palm oil supply chain and will prevent reputational risk for the company.”

Under its new policy, Safeway will:

·       Ask suppliers to provide palm oil and palm derivatives for its products that are verified to be free of deforestation, free of expansion on carbon–rich peat lands, not developed or expanded on illegal or customary use lands without the free, prior and informed consent of local communities and free of human rights violations including forced and child labor, human trafficking and poor working conditions.

• Complete an accounting of its palm oil and palm derivative usage for all Safeway branded items in June 2014.
• Source one million pounds of Roundtable on Sustainable Palm Oil (RSPO) certified palm oil for Safeway branded items in 2014. The company reports that, as of April 1, 2014,it is more than halfway toward that goal.
• Set its sustainable palm oil goals and evaluate its progress during 2014, and set new targets for 2015 and 2016.
• Report annually, through its Corporate Social Responsibility website and through other external reporting, on its progress towards sourcing 100% responsibly produced palm oil and palm oil derivatives.