Palm oil sourcing

Palm oil is a cost-competitive, versatile and widely produced vegetable oil. When responsibly sourced, it can support millions of livelihoods and reduce pressure on forests and sensitive ecosystems.

Our approach to the responsible sourcing of palm oil

We use palm oil - an edible vegetable oil derived from the fruit of oil palm trees - in a number of our products. It is a versatile and highly efficient ingredient, requiring less land for production than any other oilseed crop (including soy, sunflower, rapeseed or coconut). There are many benefits to using it alongside some challenges, which is why our responsible sourcing activities focus on understanding where our palm oil comes from and how it is produced.

We buy three quarters of our palm oil supply from Malaysia and Indonesia, and smaller volumes from Latin America and West Africa. Our Responsible Sourcing Core Requirements (pdf, 2Mb) are integrated into our procurement process, and set out our standard for minimum environmental, social and governance expectations that apply to our supply chains.

If we become aware of allegations concerning a palm oil mill or plantation where we source our raw materials, we first investigate and engage with our direct suppliers to swiftly address the situation and develop an action plan as needed.

We act in good faith to foster a culture of continuous improvement with our suppliers. In case of serious breaches of our responsible sourcing core requirements that go unaddressed, this may result in our decision to suspend a commercial relationship. We publish a list of upstream companies we no longer work with: 

How we buy our palm oil

Traceability and Supply Chain Disclosure

All our palm oil suppliers must provide full visibility of their supply chain, and in 2025, 99.8% of the palm oil we sourced was traceable to mill. To help us more closely monitor conditions on the ground, we also focus on increasing traceability to individual plantations. In 2025, we achieved 85.9% traceability to plantation.

We publish a list of our Tier 1 palm oil suppliers (pdf, 3Mb), on our global website, detailing the country of origin and the mills in our supply chain.

Roundtable on Sustainable Palm Oil (RSPO) certification

Our commitment to RSPO certification has already delivered tangible benefits -  supporting smallholders in achieving certification, improving agricultural practices and enabling access to premium markets.

Deforestation-free

Healthy forests are key to resilient food systems, providing us with high quality ingredients. They are also essential for achieving our net zero ambition.

In 2025, 96.3% of the total volume of palm oil that we sourced was assessed as deforestation-free. Learn more in the Environmental Disclosures section of our 2025 Non-Financial Statement (pdf, 18Mb).

What do we mean by deforestation-free palm oil?

Deforestation-free means that the palm oil was assessed as produced on land that has not been subject to deforestation or conversion since the cut-off date of 31 December 2015. Along with many companies in the palm oil value chain, we use the Earthworm Foundation’s, Deforestation & Conversion Free (DCF) Methodology for palm oil who supports us to monitor our palm oil supply chains. 

To drive continuous improvement and reward positive change, our deforestation free methodology includes a Recovery Plan category. Developed in partnership with Earthworm Foundation, these minimum re-entry requirements create a transparent pathway for companies with previous findings that have taken corrective action, to re-enter Nestlé’s supply chain. Full details can be found in Guidance on Minimum Requirements for Re-entry (pdf, 155 Kb).

Leveraging satellite monitoring technology

We partner with Airbus and Earthworm Foundation on Starling, a satellite based service to monitor 100% of our global palm oil supply chains. Starling provides highly detailed optical and radar images of land across huge areas. We monitor over 72 033 farm boundaries in our supply chain, as well as the area surrounding more than 1 700 mills, to determine whether origins are verifiably deforestation-free and whether further supplier engagement and investigation are needed.

Since 2017, we have pioneered the use of Starling and it's now become common practice for companies in the consumer goods industry to leverage satellite data in this way. We also created a palm oil transparency dashboard to update stakeholders on our progress in achieving assessed deforestation-free palm oil, and to share our learnings.

Human Rights

Our Human Rights Framework and Roadmap (pdf, 5Mb) guide our due diligence approach on actual and potential human rights risks arising directly or indirectly through our own activities or our business relationships. Our direct suppliers, including for palm oil, must fully comply with all local laws, international standards, and applicable regulations, and adhere to our Responsible Sourcing Core Requirements.

In February 2023, we issued dedicated action plans (pdf, 14Mb) action plans to help us enhance human rights due diligence across our value chain and in priority countries where we operate and/or source from. We report on this area of our work in our Creating Shared Value publication (pdf, 6Mb) and Non-Financial Statement (pdf, 18Mb).
 

Palm oil human rights action plans

We implement specific human rights action plans on palm oil in key sourcing countries based on our human rights due diligence process. In prioritized countries, we implement a smart-mix approach. This focuses on addressing the most salient human rights risks through a combination of supply chain interventions and collective actions. These actions are both at a direct supplier-level and beyond (i.e., further upstream in our supply chain), through collaborative activity at national level (for example landscape or sectoral initiatives). In 2025, we started rolling this out in Malaysia, Indonesia and Colombia.
 

Human Rights and Environmental Due Diligence

Regarding human rights and environmental due diligence (HREDD), Nestlé, together with our technical partner, Proforest, engages priority Tier 1 palm oil suppliers (covering 80% of our palm oil volumes) to ensure they have adequate HREDD maturity level, followed by the development of scorecards with recommendations for improvement. Suppliers are then expected to develop action plans to address identified gaps while being supported with guidance and capacity-building. Their progress is monitored and annually reported to ensure continuous improvement. We are also working with key suppliers on action plans for prioritized origin refineries to effectively address risks and issues at the origin level.

The Nestlé Palm Oil Human Rights Fund

Nestlé works with Winrock International, a non-profit organization, to manage the Nestlé Palm Oil Human Rights Fund. Through the Fund, Nestlé provides targeted co-funding to direct palm oil suppliers via human rights grants to implement specific projects in Southeast Asia, West Africa, and Latin America. This helps support the HREDD process as suppliers can apply to the fund to improve on any gaps identified.  

One example of how the Fund supports suppliers is through the Earthworm Foundation’s Labour Transformation Program (LTP). The LTP is an on-site engagement effort with mills and plantations in the Nestlé palm supply chain to identify and address potential human rights risks. 

The Earthworm Foundation conducts extensive document reviews and interviews with management and workers to measure compliance with local, national, and international human rights standards and laws, including those concerning: 

• Wages and time management (wage amount and deductions, wage transparency, payslip management, and working hours, overtime and rest management)
• Accommodation (location, structure and size, and equipment and safety features)
• Health and safety
• Grievance Management
• Employment contract
• Freedom of movement (access to identity documents to facilitate workers movement 
  outside the mill and plantation)

Each mill and plantation receives a personalized action plan and resources to remedy any potential human rights risks, which the Earthworm Foundation monitors and uses to assess progress made during follow-up visits. 

Addressing Child Labor Risks

The presence of children on plantations is a particular risk in Sabah, Malaysia. Thousands of children may live on palm oil plantations, often undocumented and in certain cases without access to basic services such as education and schooling.

To help implement our human rights action plans in palm oil and support suppliers in addressing gaps identified as part of the HREDD process, Nestlé supported a program developed by our supplier Wilmar to protect children living on plantations, in collaboration with Business for Social Responsibility.

It included holding a series of stakeholder consultation workshops on Implementing Wilmar's Child Protection Policy (pdf, 3Mb) for Indonesian plantation companies, government representatives, trade unions and industry associations. Following the workshops, Wilmar published its Child Protection Policy Implementation Manual which is being further refined for potential use outside of Wilmar's supplier base.

Indigenous Peoples' and local communities' land rights

We have identified Indigenous Peoples' and local communities' land rights as a salient issue in the palm oil sector in Brazil, Colombia and Indonesia and are implementing supply chain and collective actions to address this. As part of our origin refinery engagement with Tier 1 suppliers in Indonesia, we expect all suppliers to establish an implementation procedure, along with a monitoring framework, for acquiring, leasing, and utilizing land in alignment with Free, Prior, and Informed Consent principles (FPIC). If this is lacking, it is identified as a gap that needs to be resolved as part of a time bound action plan. We also supported one of our suppliers in developing technical guidance (pdf, 2 Mb) for the implementation of FPIC by palm plantations in their supply chains. 

Landscape projects

Nestlé views the farms, communities and processing facilities that are connected to our supply chain as an integrated part of a broader landscape. We support several landscape initiatives and collaboration projects across our key palm oil producing regions to help drive positive environmental and social outcomes across a wider area.