Neste on DJSI again as new report claims 'serious sustainability violations' by feedstock suppliers

Photo: Neste Corp.

Neste Corp., the global renewable diesel and sustainable aviation fuel (SAF) producer, is defending itself against allegations it says were made in a report produced by Profund and commissioned by Milieudefensie claiming its feedstock suppliers have been involved in "serious sustainability violations," according to Neste. These alleged violations include deforestation, fires, peat destruction, and community and labor rights violations.

"We acknowledge the fact that there are sustainability concerns linked to the palm oil industry," Neste stated. "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 [palm fatty acid distillates] (PFAD) supply chains on our website to enable external experts to help in this work."

The company says while it has not yet been able to thoroughly familiarize itself with the new report, which was published Nov. 5, and therefore it cannot comment on its specific claims, an initial review garnered by Neste seems to highlight some previously investigated cases that were subsequently closed because the companies were found not to be involved in the alleged actions.

"The report also introduces some claims concerning our suppliers that are new to us," Neste stated. "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."

The company says all of its contracts with feedstock suppliers include strict terms on sustainability. "Commitment to sustainability, protecting biodiversity, and respecting human rights are requirements that must be met before a contract is signed," Neste stated. "All our palm oil and PFAD suppliers are additionally required to be [Roundtable on Sustainable Palm Oil] members, which holds them accountable to the RSPO Code of Conduct and enables RSPO complaints panel involvement for monitoring and seeking resolutions."

Neste says it takes all allegations of suspected sustainability violations seriously, and it investigates them thoroughly. "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," the company stated. "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 in the past."

Neste stated that it 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," the company stated.

Meanwhile, shortly after this report came to light, Neste highlighted the fact that it has been selected for inclusion in the Dow Jones Sustainability Indices for the 14th consecutive year. The company was included in the DJSI World and DJSI Europe.

"Neste's performance received the industry's best scores in materiality, environmental and social reporting, human capital development, and water-related risks, contributing to the company's inclusion among the top performers," Neste stated.

Companies are selected for inclusion in the DJSIs based on a comprehensive assessment of long-term performance indicators measured by economic, environmental and social criteria, as well as against sustainability trends. The assessment of companies this year is based on their performance in 2019.