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Kellogg To Source Only Fully Traceable Palm Oil

Cereal maker Kellogg Co. (K) on Friday announced its global commitment to source only fully traceable palm oil that is produced in an environmentally responsible, socially beneficial and economically viable manner.

The company said it is working through its supply chain - from suppliers to processors to growers - to ensure that the palm oil it uses is sourced from plantations that uphold the company's commitment to protect forests and peat lands, as well as human and community rights.

Palm oil is a widely-used vegetable oil across the world. However, its production is said to be a leading cause of global deforestation and also contributing to the violations of human rights.

Kellogg has been under intense pressure from grassroots groups and environmental activists for its partnership with Singapore-based Wilmar International Ltd. (WLMIF), a company that has been accused of contributing to the destruction of rain forests.

Kellogg said that while it is only a very small user of palm oil, it has directly engaged with global palm oil suppliers and stakeholders since it began sourcing palm oil in 2009. In 2012, the company began to use mass balance palm oil in Europe, and in 2014 the company was able to shift its U.S. palm oil use to mass balance supply.

Diane Holdorf, Chief Sustainability Officer of Kellogg said, "As a socially responsible company, traceable, transparent sourcing of palm oil is important to us, and we are collaborating with our suppliers to make sure the palm oil we use is not associated with deforestation, climate change or the violation of human rights."

Kellogg said its plan will require all global palm oil suppliers to trace palm oil to plantations that are independently verified as legally compliant; adherent to the company's principles for protecting forests, peat lands, and communities; and also be compliant with all Roundtable on Sustainable Palm Oil or RSPO principles and criteria. The company noted that suppliers must comply with the requirement by December 31, 2015, or be working to close any gaps identified in their action plans.

Kellogg noted that its commitment has received support from external stakeholders such as Green Century Capital Management, an environmentally responsible investment advisory company.

Kellogg said that in addition, it is participating as a member of the RSPO and ensuring that suppliers commit to ethical business practices, respecting human rights, and reduce their impact on the environment. The company is also supporting the Consumer Goods Forum or CGF pledge to achieve zero net deforestation by 2020.

In April 2013, grocery chain operator Kroger Co. (KR) said it is committed to sourcing sustainable palm oil by the end of 2015.

K closed Friday's trading at $60.19, up $0.71 or 1.19 percent on a volume of 1.64 million shares.

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