Investing Improving Innovating
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Investing In the future of our supply chains. Improving Our own practices, sector practices and the livelihoods of our smallholders. Innovating In the delivery of services and connections to our farmers and customers. Corporate Responsibility and Sustainability Report 2015 Introduction Who we are EST. 1989 Olam began by trading cashews from Nigeria to India. 16,200 customers Just 26 years later, and headquartered in Singapore, we have become a global agri-business, operating from seed to shelf, and supplying food and industrial raw materials to over 16,200 customers around the world. 70 countries Our team of 62,500 people across 70 countries, have built leadership positions in products such as cashew, cocoa, coffee, cotton and rice. Top 30 companies We are listed on the Singapore Exchange (SGX) and are among the top 30 companies by market capitalisation. Cashew in Côte d’Ivoire What we do – in a nutshell Our company vision • We grow our own crops – almonds, • We trade and hedge commodities. To be the most differentiated and valuable global agri-business by 2040. You can learn cocoa, coffee, palm, rice and rubber. • We operate in the food ingredient more about our value chain and company space and create specific blends and • We harvest and process wood from natural strategy in the 2015 Annual Report. forest concessions. We also run our own recipes for customers. dairy farms. • And, for Africa only, we have our own Our purpose • We buy crops from an extended network consumer brands. To carry out our business in a responsible way. of 4 million farmers, the majority of whom • All the way along the chain, we manage We call this Growing Responsibly. We ensure are smallholders in emerging markets. the logistics of getting a crop from profitable growth is achieved in an ethical, • But we don’t just buy, we help as many source to customer. socially responsible and environmentally sustainable manner. This is integral to our farmers as we can to increase their yields • We offer risk management and value without impacting on the environment. business model and is, quite simply, the right added services to our customers, such thing to do. • We then process many of the crops we as traceability and certification. grow, and buy, from cashew to cocoa, Our sustainability vision tomatoes to spices. End-to-end sustainable supply chains by 2020. This report tells you about our journey so far. Front cover images: Top left: Checking moisture levels in the soil of our California almond orchards Top right: Chilli pepper farming in India Bottom right: Data collection through Olam Farmer Information System (OFIS) 2 Contents CEO perspective 4 Climate Change 72 Highlights 7 Labour 87 Goals 8 Food Security 106 Strategy 12 Food Safety and Quality 120 Material areas 25 How we do it 132 Livelihoods 27 Commodities overview 151 Land 42 How we report 162 Water 60 Contact 176 Wheat milling in Ghana 3 CEO perspective When I look back to our last report, I am reminded by how much we have achieved*, but also how far we must travel to fulfil our vision of managing end-to-end sustainable supply chains – wholly necessary if we are to have a secure supply of quality crops, food ingredients, feed, fibre and bio-fuel raw materials in the decades ahead. While our operating performance has been In terms of our business model, during 2015 we Of course, the importance of upholding strong, the environment has been challenging continued to focus on having a differentiated international standards cannot be – the commodity markets remain volatile, and diversified portfolio within the agri-sector. underestimated. We recognise that we operate currencies are depreciating, the slowdown We improved our global leadership position in in some ‘high risk’ products – palm, tropical in China continues to have knock on effects, key segments, selectively seizing opportunities wood and rubber. Adhering to RSPO, FSC® and and climate change induced weather impacts through targeted acquisitions. The acquisitions IFC standards provides a robust framework are making life difficult for both Olam and our of ADM Cocoa and McCleskey Mills (US peanut for Olam and additional reassurance for our farmer suppliers. sheller) meant we welcomed over 1,700 new customers and key stakeholders. And where employees whose experience and skills are Standards do not exist we seek to drive their In the emerging markets, although the bringing a new dynamic to those businesses. creation as with the proposed International Olam Livelihood Charter (OLC) has been We have also had to take some tough decisions. Rubber Standard. significantly improving the yields of almost These included the restructuring of our dairy 344,500 smallholders, millions more continue Our commitment to third party audits can also business in Uruguay, which meant reduction to face enormous challenges, from lack of be seen through our membership of the Fair of some farms, staff redundancies and some power, irrigation, transportation and storage Labor Association who are helping to monitor culling of the herd population. Other decisions infrastructure to limited education. Given cocoa and hazelnut farmer compliance to our taken before and during this reporting period the pull of the cities, making sure that farmers programmes and OLC principles. You may recall have had an impact on the aspiration we had want to keep farming is a challenge we must in our 2014 Report how we covered the issue set in 2010 for the number of farmers in the continue to address. Helping those farmers, as of child labour risk as a result of the large OLC by the end of 2015, this can be seen from well as the people who work on our plantations, migrant workforce in Turkey for our hazelnut our goals. or in our processing facilities, to stay healthy supply chains. With the current refugee and strong has taken on a new imperative if In March 2015, we regained one of our FSC® crisis in Europe, the efforts we had put into we are to meet the increasing supply demands certificates** for our Republic of Congo educating farmers on fair labour practices over of a growing global population. concessions which had been temporarily the past few years is now paying dividends suspended in October 2014. When I visited our given the huge numbers of people moving However, we are fortunate that unlike many Wood Products team in Pokola at the start of through the region. other listed companies, our shareholding this year, their commitment to not only uphold structure enables us to invest in building As can be seen, the risks and opportunities international standards but to provide for the sustainable supply chains. In 2015, we in our supply chains can experience some local communities was a lesson in what can be welcomed a new major strategic shareholder ebb and flow, even bringing new factors for achieved with regard to sustainability, even in - Mitsubishi Corporation who took a 20% consideration from one year to the next. We highly remote and inaccessible areas. This was stake. Both Mitsubishi and our other major have therefore, reviewed our goals and targets, further evidenced when they presented with investor, Temasek Holdings (51%), recognise updating them in line with our business the Government of the Republic of Congo at that we must invest wisely today to ensure we objectives. Focused primarily on smallholders the Paris Climate Talks in December on can meet the needs of our farmer suppliers, and our emerging market workers we have the Emissions Reduction Programme for customers, shareholders, creditors and other enhanced goals for health and sanitation, the country. key stakeholders tomorrow. climate-smart agriculture, nutrition and 4 gender equality. The targets are ambitious We were delighted to see Professor Norman We must collaborate but we are fortunate that our teams are both Uphoff and the System of Rice Intensification resourceful and resilient, traits that have been win our inaugural prize for Innovation in Food Olam would not be where we are today without part of Olam’s DNA since we began in 1989. By Security. Housed at Cornell University, the team our partners, from the Development Finance working on the ground, whether monitoring had achieved some exceptional results by Institutions to the NGOs, our customers the almond crop or training smallholders, they turning accepted agronomic practices in rice and university partners. At a last count, we see the negative impacts, such as drought, farming on their head. In conjunction with our had over 50 active partnerships, each of first hand. But these challenges also stimulate science partner, Agropolis Fondation, we are us coming with our own capabilities, skills innovation and action – inspiring colleagues looking forward to the 2016 entries. and agenda but yet finding common ground to come to work each day. to develop effective solutions for the local We must invest in our people pipeline community. Certainly while Olam is committed Reading through our goals and the challenges to tackling many of the issues outlined so we have faced, plus those yet to overcome, Businesses are nothing without their people. comprehensively by the UN Sustainable 6 key points come to the fore: But agriculture is not considered a glamourous Development Goals (SDGs), deep and positive career, so we are increasingly working with impact can only be made if we collaborate on Our sustainability efforts must bring universities and colleges to help encourage resources in manpower, expertise and finance. value to Olam bright students who are excited by the challenge of producing more food from And, finally, we must be brave We are not a charity. Every action we take fewer resources. must unlock value for Olam as well as the Brave means accepting we don’t have all the communities where we operate concurrently.