Responsible Sourcing

As a global merchant and processor of a wide range of agricultural commodities, we are committed to actively and consciously sourcing and procuring products and services in an ethical, sustainable and socially responsible way.

As LDC does not directly control all origination sources, we leverage our leading position to promote the adoption of LDC sustainability policies and standards by our suppliers, as part of our continual work toward increasingly sustainable supply chains.

In line with this goal, we have adopted commodity-specific sourcing policies and codes of conduct designed to address specific sustainability challenges in some of our supply chains, including our Coffee Supplier Code of Conduct, Palm Sustainability Policy, and our Soy Sustainability Policy. In addition, all Brazilian suppliers have to comply with LDC’s Brazilian Code of Conduct for Raw Material Suppliers. LDC suppliers are requested to formally acknowledge and undertake to comply with such policies, either contractually or through an onboarding process, and LDC teams are available to support them in addressing any potential gaps and challenges.

To further strengthen LDC’s framework around responsible sourcing, in 2022 we began work on the adoption of a global responsible sourcing policy that will apply to all Group suppliers. As an overarching guideline that sets minimum sustainability standards, this policy will exist alongside current (and potentially future) commodity-specific policies, which will continue to offer additional and complementary guidance related to product-specific supply chains. In case of conflict, the more restrictive policy will apply. As an exception, LDC’s Brazilian Code of Conduct for Raw Material Suppliers will be replaced by the global responsible sourcing policy.

In certain regions, such as Brazil, LDC’s supplier list is periodically checked against official public lists that register companies facing allegations in relation to sustainability issues such as human rights or environmental misconduct. If LDC discovers that a supplier is mentioned on such lists, the supplier is flagged for our commercial, sustainability and/or compliance teams to engage with them, in order to understand and assess the case and decide on the course of action, which may include suspension of the relevant supplier’s contract(s) and corresponding payment until conclusion of the assessment.

Equally, some of our business lines have formal grievance procedures. For example, our Palm Grievance Protocol sets forth applicable procedures in the event that any grievance is raised by an external stakeholder in relation to our palm supply chain. This protocol ensures that LDC engages with the subject of a reliable grievance to understand the context and assess maintenance of the commercial relationship with the relevant supplier. Our global responsible sourcing policy will also ensure that a sustainability-related grievance protocol is in place Group-wide.

Progress on Traceability

In 2022, LDC pursued efforts to drive supply chain traceability, as a foundation for our responsible sourcing vision and commitments. We performed an overall analysis of both past and ongoing traceability processes across our business lines and geographies, and made further investments to facilitate product tracking, from enhancements to first-mile logistic tracking systems and warehouse management systems, to linking logistic flows to commercial purchase and sales contracts.

In origination markets, we extended information captured in our systems from our suppliers to cover more sustainability data fields, conducting risk assessments of sourcing areas to different levels and granularities. These efforts contributed to a more solid traceability baseline, with an increasing proportion of products traceable back to farms.

In destination markets, we worked to capture logistic flows and product journey data linked to contract deliveries, in order to provide transparency further downstream. In collaboration with our clients and their customers, we launched several proofs of concept and pilots for product tracing and data sharing, working together toward increasingly transparent supply chains, from end to end.

Improved traceability at origins enables us to use sustainability criteria to drive informed commercial decisions. Although not fully automated, our commercial teams can include sustainability elements in the trade status of a counterparty, with corresponding alerts to relevant internal teams, should additional verifications be needed prior to signing a contract.

Looking Forward

In 2023 and beyond, we will continue to enhance LDC’s traceability baseline at origins, as we work toward our deforestation and conversion-free goal by the end of 2025.

We are also establishing a cross-platform traceability service within the company, with the goal of building up end-to-end product tracking capabilities across up- and downstream activities, and improving traceability data quality and integrity in our source systems. We will expand traceability coverage to different types of supply chain models, including identity-preserved, segregated, mass balance and conventional (no certification associated).

Finally, as part of our longer term goals, we will continue to engage and collaborate with both suppliers and customers to build up a clear and detailed record of every product journey, from farm to fork.