CHICAGO (Reuters) - The world’s two largest consumer goods companies, Nestle SA (NESN.S) and Procter & Gamble Co (PG.N), have acknowledged they will fall short of goals to use only those ingredients that do not contribute to deforestation in their products by 2020.
Nestle, known for products such as KitKat bars and Haagen-Dazs ice cream, says on its website that in 2010 it “made a commitment to no-deforestation” by 2020. But on Saturday, a Nestle spokeswoman said the company now believes it will stop short of that target.
Nestle now predicts “over 90 percent of our key agricultural commodities to be verified deforestation-free by the end of 2020, up from 77 percent at the beginning of 2019,” the spokeswoman said.
Procter & Gamble, meanwhile, states on its website that it aims “to establish zero deforestation in our supply chain by 2020.”
But on Sunday, a spokesman for the company, which uses palm oil in its Tide detergent and Olay skincare products, said it too would fail to meet the goal by next year.
Advocacy groups like Greenpeace have previously said they were skeptical of promises made by consumer companies.
The environmental record of global corporations was in the spotlight at the U.N. Climate Action Summit this week, and some investors have called on companies to step up deforestation efforts after more than a month of fires in the Amazon rainforest.
Nestle and P&G, respectively the world’s biggest packaged goods companies by market capitalization, made their deforestation pledges in 2010 at the urging of the Consumer Goods Forum (CGF), an industry trade group.
Hundreds of companies have made 2020 zero deforestation pledges, according to the group. Ignacio Gavilan, CGF’s director of sustainability, told Reuters its member companies had underestimated increasing demand for consumer goods and lax government forest regulations.
Both Nestle and P&G, which say they have invested in monitoring deforestation over the past decade and will continue to do so, reference their commitments with the CGF on their websites and executives have spoken of them publicly.
PepsiCo Inc (PEP.O), Mars and Mondelez International Inc (MDLZ.O) told Reuters they had no-deforestation pledges and declined to provide specifics on any related goals for 2020 or beyond. Cargill Inc, which sources ingredients like corn and soybeans, said on a conference call with reporters in June that it and the broader food industry will not make 2020 zero deforestation pledges.
Coca-Cola Co (KO.N), a CGF member that did not make the pledge, said it is still trying to reduce deforestation in its supply chain.
Reporting by Richa Naidu; Editing by Vanessa O'Connell and Tom Brown