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METHODOLOGY

AtSource is devoted to providing you with clear traceability and sustainability through the agricultural supply chain. Learn about our system in detail to help inform your decisions.

AtSource Entry-Tier

3rd party risk screening

Olam uses 3rd party risk screening tools as an indicator of the risk level of several material areas for every commodity in every country that we operate. The risk scores are aggregated and reviewed on an annual basis. 

If 3rd party risk scores show an elevated level of risk, we use this knowledge in 2 ways:

  1. Inform our Olam Supplier Code (OSC) engagement discussions with our suppliers. We are able to talk to suppliers about these elevated risk areas and provide advice on how to avoid and/or mitigate the risk.
  2. Inform our business strategy and plan to tackle these challenges. We recognise that risk scores give a general indication of risk for a particular topic and country. We use this information to identify areas for further exploration and to prioritise strategic risk mitigation interventions.

The risk scores are listed below:

Country Risk Screening Tool
Methodology
Economic Opportunity

UNDP Population in Multi-Dimensional Poverty

Elevated risk = score of 80 or above   

Acceptable level of risk = score below 80

Safe & Decent Work

UNICEF Rural Child Labour

Elevated risk = score of 80 or above

Acceptable level of risk = score below 80

Diversity & Inclusion

UNDP Gender Inequality Index

Elevated risk = score of 0.66 or above

Acceptable level of risk = score below 0.65

Education & Skills

UNDP Mean years of schooling

Elevated risk = Below 7 years

Acceptable level of risk = 7 years and above

Health & Nutrition

The Economist Global Food Security Index

Elevated risk = score of 50 or above

Acceptable level of risk = score below 50

HEALTH & WELL-BEING

UNDP HDI Life Expectancy at Birth

Elevated risk = Below 66 years

Acceptable level of risk = 67 years and above

Climate Change

ND-GAIN

Elevated risk = 1) high vulnerability, low readiness 2) high vulnerability, high readiness

Acceptable level of risk = 1) low vulnerability, low readiness; 2) low vulnerability, high readiness

Water Use

WRI Aqueduct country score

Elevated risk = 1) medium to high risk; 2) high risk; 3) extremely high risk

Acceptable level of risk = low to medium risk

Healthy Eco-Systems

Total tree Cover Loss since 2000 (%) (WRI GFW)

Elevated risk = Greater than 4%

Acceptable level of risk = Less than 4%

Healthy Eco-Systems

GMAP HCV proxy - PS6 Presence and impact on high or unique terrestrial biodiversity

Elevated risk = score of 80 or above

Acceptable level of risk = score below 80

Environmental Footprint

The environmental footprint methodology is based on the Life Cycle Impact Assessment (LCIA) methodology (ISO 14044). In the context of AtSource the scope covers the production of the raw material (i.e. crop) to Olam's client gate. The impact indicators chosen are climate change, water depletion and land use:

  • Climate change: the ReCiPe midpoint H impact assessment method is used, which uses the Global Warming Potential at 100 years from the IPCC. This indicator weights all greenhouse gases emissions according to their global warming potential (using CO2 as the reference value) and sums them into metric tonnes of CO2 equivalent.
  • Water use: The ReCiPe midpoint H impact assessment is used. This indicator sums all freshwater input inventory flows related to human water use (excluding turbined water). It is expressed in m3 of water use.
  • Land use: Land use is a measure of the total land required to produce a metric tonne of product. It is expressed in hectare (ha) of land use and does not use LCIA methodology. Currently AtSource solely focuses on the agricultural aspect of land use, namely the farming land used to grow the base product.

The calculator is based on EcoInvent’s Life Cycle Impact Assessment and updated using Olam primary data so as to allow the end user to establish a footprint unique to them. AtSource uses primary data generated within Olam’s value chain (i.e. yield, irrigation use, fertiliser use, pesticide use, logistic routes along with associated transportation distances and the various modes of transportation, processing data, etc). Further details of Ecoinvent LCIA can be found here: www.ecoinvent.org

What does AtSource Entry-Tier and AtSource Plus cover?

The footprint numbers, denoted in both absolute and intensity terms, provides an estimate of the environmental impact of an Olam agricultural product; from farm to customer. The data used to calculate the footprint is a combination of primary data from Olam’s value chain (yield, irrigation, fertiliser use, pesticide use, transport distances and modes, processing data, etc.) and secondary data derived from Ecoinvent (www.ecoinvent.org).

For AtSource Entry-Tier the primary data inputs represent averages of our operations in the country. For example, the yield assumed will be the average yield of Olam farmer groups producing the product in the origin country.

AtSource Plus provides further granularity, as primary data inputs are specific to the farmer groups or farms the customer’s products are sourced from.

All footprint data is broken down by value chain step (Agriculture, Processing and Transportation) and includes further break-downs of processes within these steps (e.g. “Electricity” within Processing).

Olam Supplier Code (OSC)

Olam actively pursues long-term relationships with third-party suppliers based on responsible business practices and trust. The Olam Supplier Code establishes the standard to which all suppliers of Olam raw materials and products shall adhere.

The OSC principles ensure that suppliers:

  • Commit to corporate governance and integrity (where applicable)
  • Guarantee the quality of goods and services they supply
  • Uphold labour standards and human rights
  • Respect the natural environment
  • Conduct their business in a way that honours local communities
  • Ensure compliance

For AtSource entry tier, we assure that our suppliers are engaged on the OSC principles and commit to the conditions of the OSC by signing the OSC Supplier Declaration. This is achieved through the following process:

Olam policies

Our own operations are committed to meeting the requirements of the following Olam Policies

  • Fair Employment Policy
  • Health & Safety Policy
  • Quality and Food Safety Policy
  • Living Landscapes Policy
  • Plantations, Concessions and Farms Code
  • The Olam Code of Conduct

AtSource Plus

Establish the Context

The first step to establishing a supply chain / programme for AtSource Plus, is that desired outcomes and potential hazards must be identified for all 12 topics of AtSource.

Monitor Performance and Risks

All criteria for AtSource entry-tier must be met for AtSource Plus. 

In addition, we collect data on core KPIs across all 12 topics in addition to metrics specific to Action Plans. Context-specific targets are set for the core KPIs.

EVALUATE RISKS

The level of risk for each topic is evaluated based on the 3rd party risk screening, identified hazards and performance against the indicators.  Risks or topics may be ‘de-prioritised’ if 3rd Party Risk Screening is low likelihood of risk, KPIs meet threshold, and hazards are few or controlled.

PLAN ACTIONS

Action Plans are generated for topics that are prioritised, based on the risk evaluation and customer or programme priorities. Action Plans help farmer groups and farmers implement best practices to mitigate challenges identified from the AtSource Plus process. 

Action Plan indicators and their targets are added to the core KPI list.  They are monitored at least every 12 months, and continuous improvement progress must be demonstrated against the intended targets. 

AUDIT AND VERIFICATION PROCESS

External verification is required for AtSource Plus and AtSource Infinity at least every three years, starting from one year from programme inception.  Internal Olam verification occurs annually for all three AtSource tiers, starting from the project preparation phase. The scope of verification includes compliance, validity of processes and methodologies, and achievement of targets against relevant KPIs. Suppliers’ compliance to the Olam Supplier Code may also be audited on a sampling basis.

AtSource Plus : Core KPIs definitions: People

Labour Practices
Labour Practices
Definitions

# and % of farmers trained
on good Labour practices in a farmer group    

Topics covered may include: 

  • Use of child labour
  • Use of forced or involuntary labour
  • Employees’ rights to form and join unions
  • Providing fair wages / benefits
  • Inclusion and non-discrimination
  • Working time (i.e. pauses in the day and days of work)
  • Avoiding harsh or inhumane treatment including physical abuse, verbal abuse, sexual harassment and other forms of intimidation

Active and effective Child
Labour Monitoring and Remediation System (CLMRS) in place for high risk farmer
group    

A ‘CLMRS’ is considered 'active and effective' if it conducts unannounced farm visits on a monthly basis (throughout the period where children are susceptible to be engaged in child labour), and any non-compliance identified leads to additional remediation actions within the reporting period 

Health and Safety
Health and Safety
Definitions

LTIFR in Olam’s processing facilities in the last year

Lost time injury frequency rate (LTIFR) refers to the amount or number of lost time injuries, that is, injuries that occurred in the workplace that resulted in an employee's inability to work the next full work day, which occurred in a given period relative to the total number of hours worked in the accounting period.

% of Olam employees trained on health & safety practices

This covers Olam employees associated with the product’s value chain, including field staff, factory staff and management.  “Olam employees” include direct full-time employees (at any job category: manager, officers, staff, workers). Seasonal and sub-contracted employees are not included. Trainings include formal workshops, modules, and inductions. Daily safety briefings and ad hoc discussions on safety are part of the safety routine and are not considered as trainings.

# and % farmers trained on Health & Safety practices

Training topics covered include:

  • Safe use of machinery and tools
  • Safe chemical storage, handling and application procedures
  • Risk to human health and environment for workers conducting hazardous tasks
  • Avoiding risk tasks for pregnant or nursing women
  • Use of Personal Protective Equipment
  • Safety attitudes and behaviours

Diversity and Inclusion
Diversity and Inclusion
Definitions

% of registered farmers who are women

If farms are co-owned by a male and a female, then they will both count as owners.  

% of leadership positions in farmer groups held by women

Farmer group leaders are people who represent the groups’ members

A group may have one leader or many leaders

Typical leadership positions may include “president”, "chair",  "vice chair", “treasurer”, “secretary”, “manager”, "group leader", "group representative" etc.

% of people attending Good Agricultural Practices (GAP) training who are female

All GAP training participants are counted, whether or not they are registered farmers.  In other words, family members, labourers and community members who attend trainings are counted.

Food Safety and Quality

Same requirement as for AtSource entry-Tier: all practises with our suppliers are compliant with Olam Quality and Food Safety Policy and with our commitment that over 90% of product volume we deliver is from Olam Supplier Code (OSC)-signed suppliers.

AtSource Plus : Core KPIs definitions: Planet

Soil Health
Soil Health
Definitions

% farmers trained on soil improvement practices

[Not applicable to all]

Topics covered may include:

  • Composting
  • Mulching
  • Cover crop
  • Fertiliser optimisation
  • Erosion mitigation
  • Reduced or zero-tillage
  • Use of hedges and/or barriers etc.

# of hectares benefiting from soil improvement initiatives

[Not applicable to all]

‘Soil improvement initiatives’ may include:

  • Leguminous cover crops or trees
  • Crop rotation
  • Inter-cropping
  • Physical and natural barriers
  • Organic fertilisers, Integrated soil fertility management etc.

Forest Protection and Ecosystems
Forest Protection and Ecosystems
Definitions

% tree cover loss in farmer group area

Using data from Global Forest Watch, the % tree cover loss is calculated by summing the tree cover loss in the area (m2) over the past five years and dividing this by the total area (m2) covered in forest five years ago. 

Climate Change

AtSource breaks down Olam’s Climate Change Footprint in 19 components across three steps of the value chain (Agriculture, Processing and Transportation). Please see Environmental Footprint or contact us for more details.

Water Use

AtSource breaks down Olam’s Water Depletion Footprint in 20 components across three steps of the value chain (Agriculture, Processing and Transportation). Please see Environmental Footprint or contact us for more details.

AtSource Plus : Core KPIs definitions: Farmer Livelihoods

Economic Viability
Economic Viability
Definitions

% change in average yield (kg/ha) of the farmer group relative to baseline

‘Baseline’ or reference period may be: previous year, 5 years ago, or the first reliable data from the start of programme. 

% of farmers attending GAP training (M/F)

[Not applicable to all]

‘GAP training’ aims to improve farm productivity and quality and may include:

  • Land preparation
  • Planting
  • Integrated Soil Fertility Management
  • Pesticide application
  • Harvest / post-harvest training

$ of total pre-financing [loans]

[Not applicable to all]

‘Pre-financing’ refers to loans provided to the farmer group or its members, typically for crop purchase, agri-inputs, tools, productive equipment, labour, and personal loans to cover other needs

Premium paid to the farmer group

[Not applicable to all]

‘Premiums’ are amounts paid above the standard price for a product

Premiums may be paid directly to farmers, to the farmer group, in cash or in kind.  If paid in kind, the estimated value is used.

Premiums do not generally include gifts and donations (whether cash, assets or infrastructure), unless these are clearly linked to performance, such as high yields or quality.

Planting material distributed

[Not applicable to all]

‘Planting material’ includes seeds, seedlings, grafting materials, and other plant tissues used for plant propagation

Fertiliser distributed

[Not applicable to all]

This indicator assesses the access to fertiliser that Olam provides.  ‘Fertilisers distributed’ includes those directly provided by Olam or directly facilitated by Olam through agreements with inputs providers.

Farm support equipment distributed

[Not applicable to all]

‘Farm support equipment’ includes personal protective equipment (gloves, goggles, respirators), productive tools and equipment (machetes, pruners, sprayers, ploughs, work animals), post-harvest tools and equipment (solar dryers, hulling machines, cleaning machines etc.) and farm-related infrastructure (drying floors etc.).

# of farmer households benefitting from Olam rural infrastructure support

[Not applicable to all]

‘Rural infrastructure support’ includes roads, bridges, electricity, solar energy, warehouses etc. This does not include schools, health clinics, or water and sanitation infrastructure captured under the topics ‘Education’ and ‘Health and Wellbeing’.

Education
Education
Definitions

% of school-aged children attending school

“School-aged children” is defined as children of primary school age (6-11) and lower secondary school age (typically,11-15); varies by country as per official school leaving age

# of beneficiaries - access to education support

[Not applicable to all]

This indicator considers household, community, social, and political aspects of educational access. ‘Access to education’ support includes initiatives that reduce entry barriers to enrollment, such as support for birth certificates, awareness of the importance of school, school transport support, etc

# of beneficiaries - school infrastructure and equipment

[Not applicable to all]

This indicator looks at the physical supply aspects of educational access.   ‘School infrastructure’ may include construction or renovation of classrooms, libraries, canteens, teacher housing, sanitary blocks, dormitories etc. School equipment support may include furniture, computers, books etc.

‘Beneficiaries’ are people who can likely access and use the infrastructure, if they wish to.

# of beneficiaries - educational services

[Not applicable to all]

 

This indicator considers service provision aspects of educational access. ‘Educational services’ refers to delivery of education such as literacy classes, vocational training, sponsoring teaching activities, innovative school models (e.g. distance education, mobile education) etc.

Health and Wellbeing
Health and Wellbeing
Definitions

% of farmer households with access to healthcare facilities

This indicator focuses on physical accessibility (and not other aspect of access, namely financial affordability and acceptability).

% of farmer households with access to clean drinking water AND sanitation

This indicator looks at households in the farmer group who usually use BOTH improved drinking water sources and improved toilet facilities, as defined by the World Health Organisation, irrespective of whether Olam contributed to their access.

# of beneficiaries attending health sensitisation / training

[Not applicable to all]

‘Health sensitisation / trainings’ include communicable and chronic disease prevention and management

# of beneficiaries receiving health infrastructure and equipment

[Not applicable to all]

This indicator looks at the physical supply aspects of health access.   ‘Health infrastructure’ includes construction and renovation of clinics, water-wells, sanitary facilities, housing for healthcare staff etc.  ‘Health equipment’ includes medical equipment and medicines donated.

# of beneficiaries receiving health care services provided or supported by Olam

[Not applicable to all]

This indicator considers service provision aspects of health access.  'Beneficiaries' include both community members and workers.   'Health care services' refers to services provided on Olam premises or organised by Olam through medical outreach campaigns and may include medicines, health check-ups, HIV testing, etc. as well as health care services from e.g. community health workers or hospitals etc. that Olam supports

Nutrition and Food Security
Nutrition and Food Security
Definitions

% of food secure farmer households

This indicator considers the Months of Adequate Household Food Provisioning (MAHFP).   "Food secure households" are defined as households with an MAHFP score of 12, meaning that they assert that they had enough food to feed their households in each of the previous 12 months.

# beneficiaries receiving food crop production support

[Not applicable to all]

'Food crops' are crops grown primarily for food, although the farmer may sell some into the local market.  This does not include crops grown primarily for sale, such as cocoa, cashew, and oil palm.

'Production support' includes any activity that contributes to increasing yields and volumes, such as seeds, finance, training on GAP for food crops etc.

# beneficiaries receiving food loss reduction support

[Not applicable to all]

‘Food loss reduction support' includes any activity that reduces the spoilage, quality loss, physical loss or contamination of the harvested crop, such as storage equipment, processing equipment, pest control, aflatoxin control etc.

# beneficiaries receiving nutrition support

[Not applicable to all]

‘Nutrition support’ includes nutrition training including health eating, weight-management training, micronutrient fortification, production of fortified crops, etc.