Ferrero Uses Satellite Monitoring for Deforestation-Free Supply Chains
Satellite monitoring replaces manual audits in palm oil supply chains
Ferrero now monitors its entire palm oil supply chain using satellite technology. The company committed to full satellite coverage in 2021 through the Starling monitoring service. This shift represents a fundamental change in how food manufacturers verify deforestation-free sourcing.
The move goes beyond certification stamps. Starling combines satellite imagery with ground verification to track land-cover change and forest disturbance in near real time. Ferrero applies this across more than 1.3 million hectares of land tied to its palm oil sourcing. Consequently, the company can detect clearing activity within days rather than months.
This matters because UK businesses increasingly face questions about commodity sourcing. Customers, investors, and procurement teams now expect proof that ingredients do not drive deforestation. Moreover, European regulations are tightening. The EU Deforestation Regulation requires companies to demonstrate that commodities entering the market are not linked to forest loss. Satellite monitoring provides the continuous evidence needed to meet those standards.
Ferrero was among the first companies to pilot Starling in 2016, according to Earthworm Foundation, the organization behind the system. What began as an experiment has become an operational traceability tool. The company now includes satellite monitoring data in its sustainability reporting, showing how verification methods are evolving across the food sector.
How satellite verification works in commodity supply chains
Starling uses optical and radar satellite imagery to detect changes in forest cover. The system processes images every few days, flagging areas where tree cover has been removed or degraded. Analysts then combine this data with supply-chain maps that show where palm oil mills and farms are located.
When the system detects a potential deforestation event near a supplier location, it triggers an alert. Field teams can then investigate and determine whether the clearing violates sourcing policies. This approach allows companies to respond quickly rather than discovering problems months later during annual audits.
Ferrero uses polygon-level mapping for its supply chain. This means the company tracks the specific geographic boundaries of farms and mills that supply its palm oil. By overlaying these boundaries with satellite imagery, Ferrero can link any detected forest loss to particular suppliers. Therefore, the company can take targeted action when problems arise.
The system also creates a continuous compliance record. Instead of relying on periodic certifications, companies can document forest cover over time. This becomes important when demonstrating EUDR compliance, which requires geolocation data and proof that commodities were not produced on land deforested after December 2020.
Other food manufacturers are watching this approach. Palm oil remains one of the highest-risk commodities for deforestation, particularly in Southeast Asia. Companies that can demonstrate continuous monitoring gain an advantage in tenders and supply agreements where sustainability criteria carry weight.
EUDR compliance creates demand for continuous monitoring systems
The EU Deforestation Regulation entered into force in June 2023. Companies have until December 2024 to comply with full traceability and due diligence requirements for palm oil, soy, cattle, cocoa, coffee, rubber, and wood products. After that date, products linked to deforestation cannot enter the EU market.
EUDR requires businesses to provide geolocation coordinates for the land where commodities were produced. Companies must also demonstrate due diligence systems that assess and mitigate deforestation risk. Penalties for non-compliance include fines up to four percent of annual turnover and exclusion from public procurement.
For UK businesses trading with Europe, this creates immediate compliance pressure. Many manufacturers source palm oil, cocoa, or soy as ingredients. Even if your business does not import directly, you may be part of a supply chain that does. Consequently, larger buyers are pushing traceability requirements down to suppliers.
Satellite monitoring addresses several EUDR requirements at once. It provides geolocation data, demonstrates continuous oversight, and creates auditable records of land use. However, the technology alone is not enough. Companies also need supply-chain maps, supplier engagement systems, and response protocols when deforestation is detected.
Ferrero's latest sustainability reporting shows this broader system in action. The company reports 100 percent RSPO certification for palm oil volumes and 100 percent Rainforest Alliance certification for coffee beans under segregated supply chain models. These certifications provide baseline standards, while satellite monitoring adds continuous verification on top.
The combined approach matters because certification alone has faced criticism. Certified plantations have sometimes been linked to deforestation or poor labor practices. Real-time monitoring allows companies to verify that certified suppliers maintain standards over time, not just at audit points.
Commercial implications for UK manufacturers and importers
If your business uses palm oil, cocoa, soy, or other high-risk commodities, EUDR compliance is now a commercial necessity. Failure to demonstrate traceability will block access to EU markets. Additionally, UK procurement frameworks increasingly include deforestation-free sourcing as a tender requirement.
Implementing satellite monitoring involves costs. Companies need supply-chain mapping, technology systems, and field verification capacity. However, the cost of non-compliance is higher. Lost contracts, market access barriers, and reputational damage all carry significant financial risk.
For smaller manufacturers, the challenge is often data access. Large brands like Ferrero have resources to map their supply chains and implement monitoring systems. SMEs may lack direct relationships with farms or mills, making traceability harder. Consequently, many smaller businesses will need to work through suppliers or industry groups to access monitoring data.
Some trade associations and certification bodies are developing shared monitoring platforms. These allow multiple companies to access satellite data for common sourcing regions, reducing individual costs. Nevertheless, businesses still need internal systems to manage the data and respond to alerts.
The risk extends beyond direct imports. If you manufacture products containing palm oil or cocoa, your customers may require proof of deforestation-free sourcing. Retailers and food service companies are building EUDR compliance into supplier standards. Therefore, manufacturers without traceability systems may lose shelf space or contracts.
Conversely, companies that implement strong traceability gain competitive advantages. Demonstrating verified deforestation-free sourcing strengthens bids for public sector contracts, where sustainability criteria often carry significant weighting. It also supports ESG reporting requirements and investor expectations around supply-chain risk management.
Insurance and finance sectors are also paying attention. Deforestation-linked supply chains represent transition risk as regulations tighten. Some lenders and insurers now assess commodity sourcing practices when evaluating business risk. Consequently, traceability systems may affect access to capital or insurance terms.
What this means for supply chain due diligence
Satellite monitoring reflects a broader shift in how sustainability compliance works. Companies can no longer rely on annual audits and certification logos alone. Regulators and customers expect continuous verification and rapid response to problems.
For businesses, this means supply-chain due diligence becomes an ongoing operational function rather than a periodic exercise. You need systems to collect geolocation data, monitor risk indicators, and document decision-making. Furthermore, you need protocols for engaging suppliers when issues arise.
Ferrero's approach illustrates what comprehensive due diligence looks like in practice. The company combines certification standards, satellite monitoring, supplier engagement, and public reporting. This layered system provides both compliance evidence and operational intelligence.
UK businesses should assess their current due diligence systems against EUDR requirements. Can you provide geolocation data for your commodity sources? Do you have systems to detect and respond to deforestation events? Can you document your due diligence process in a way that satisfies regulatory scrutiny?
If the answer to any of these questions is no, you need to close those gaps quickly. EUDR deadlines are firm, and enforcement will follow. Additionally, UK regulations may evolve in similar directions, particularly around supply-chain transparency and environmental due diligence.
Essential facts about satellite-based supply chain monitoring
- Ferrero committed to 100 percent satellite monitoring of its palm oil supply chain through the Starling service in 2021, covering more than 1.3 million hectares of land.
- Starling combines satellite imagery with ground verification to detect land-cover change and forest disturbance in near real time, typically within days of occurrence.
- The EU Deforestation Regulation requires companies to provide geolocation data and due diligence evidence for palm oil, soy, cattle, cocoa, coffee, rubber, and wood products entering EU markets after December 2024.
- Ferrero was among the first companies to pilot satellite monitoring in 2016, and the system has since evolved from an experiment into an operational traceability tool used across multiple commodities.
- UK businesses trading with Europe face immediate compliance pressure, as failure to demonstrate deforestation-free sourcing will block market access and may result in fines up to four percent of annual turnover.
- Satellite monitoring provides continuous compliance records that support EUDR requirements, ESG reporting, and tender responses where sustainability criteria carry significant weighting.
Building traceability systems before regulatory deadlines
Companies should start by mapping their commodity supply chains. Identify which ingredients or materials fall under EUDR scope. Then trace those commodities back to mills, farms, or production areas. This mapping exercise often reveals complexity that was not previously visible.
Next, engage with suppliers to collect geolocation data. Many suppliers already have this information, particularly if they participate in certification programs. However, data quality varies. You may need to verify coordinates and confirm that they represent actual production areas rather than office locations.
Once you have supply-chain maps, evaluate monitoring options. Some certification bodies now include satellite monitoring as part of their services. Industry platforms also exist that allow multiple companies to share monitoring costs for common sourcing regions. Alternatively, larger businesses may implement proprietary systems like Ferrero has done.
Technology alone will not achieve compliance. You also need internal processes for reviewing alerts, investigating issues, and engaging suppliers. When satellite monitoring detects potential deforestation, someone must assess the finding, determine whether it violates sourcing policies, and decide on appropriate action.
Documentation matters throughout this process. EUDR requires companies to maintain due diligence records for five years. Keep records of your risk assessments, supplier communications, monitoring data, and decisions. This documentation demonstrates that you have implemented adequate systems and taken reasonable steps to prevent deforestation.
Training is another critical element. Staff involved in procurement, quality assurance, and sustainability need to understand EUDR requirements and how your traceability systems work. They should know how to interpret monitoring alerts and follow escalation procedures when problems arise.
Consider joining industry initiatives that address deforestation and traceability. Groups like the Roundtable on Sustainable Palm Oil and similar bodies for other commodities provide guidance, tools, and collective action platforms. Membership can help smaller businesses access resources and monitoring systems that would be costly to develop independently.
Finally, integrate deforestation-free sourcing into your broader sustainability and risk management frameworks. Commodity traceability connects to carbon reporting and net-zero programs, as deforestation represents a significant source of supply-chain emissions. It also relates to supply-chain resilience, as climate impacts and regulatory changes create ongoing operational risks.
Where satellite monitoring fits in broader sustainability requirements
Deforestation-free sourcing is one piece of a larger sustainability agenda facing UK businesses. Companies must address carbon reporting, circular economy principles, nature-positive commitments, and social responsibility across their operations and supply chains.
Satellite monitoring can support multiple objectives simultaneously. Forest conservation reduces carbon emissions, protects biodiversity, and maintains ecosystem services that supply chains depend on. Therefore, investments in traceability systems generate benefits across several sustainability pillars.
Carbon reporting requirements are expanding through regulations like the Streamlined Energy and Carbon Reporting framework and voluntary standards such as the Science Based Targets initiative. Many companies must now report Scope 3 emissions, which include supply-chain impacts. Deforestation contributes significantly to Scope 3 footprints, particularly for food and consumer goods manufacturers.
By implementing satellite monitoring, companies can better quantify and reduce supply-chain emissions. They can demonstrate to customers and investors that commodity sourcing does not drive forest loss. This supports ESG compliance and reporting requirements while reducing actual environmental impact.
Public sector suppliers face particularly high expectations. Procurement Policy Note 06/21 requires suppliers bidding for central government contracts above certain thresholds to publish carbon reduction plans. These plans must address supply-chain emissions, not just direct operations. Consequently, demonstrating deforestation-free sourcing becomes relevant for tender competitiveness.
The UK Environment Act also introduces biodiversity net gain requirements for development projects. While this applies primarily to construction, the principle of demonstrating positive environmental outcomes is spreading across sectors. Companies with strong supply-chain sustainability practices are better positioned as nature-positive commitments become mainstream.
Practical steps for businesses without traceability systems
Start by conducting a commodity risk assessment. List all raw materials and ingredients your business uses. Identify which ones fall under EUDR scope or carry deforestation risk. Prioritize those that represent the largest volumes or highest risk.
Engage with your current suppliers about traceability. Ask whether they can provide geolocation data for production areas. Determine what monitoring or verification systems they already use. Many suppliers are implementing traceability in response to customer demand, so the conversation may be easier than expected.
If suppliers cannot provide adequate traceability, consider whether alternative sources are available. Some regions and suppliers have better monitoring infrastructure than others. Switching suppliers may be necessary to achieve compliance, particularly for high-risk commodities.
Seek expert guidance on implementation. Organizations like IEMA provide training and resources on supply-chain sustainability. Industry bodies relevant to your sector may offer specific guidance on deforestation-free sourcing. Additionally, training programs focused on sustainable procurement can help your team build necessary capabilities.
Budget for traceability systems as part of operational costs, not optional sustainability projects. EUDR compliance is mandatory for market access. The investment in monitoring and verification should be viewed as essential business infrastructure, similar to quality management or financial controls.
Communicate your traceability efforts to customers and stakeholders. Transparency about your due diligence systems builds trust and demonstrates commitment to responsible sourcing. It also helps manage expectations during the transition period as you implement new monitoring capabilities.
Government and industry resources for supply chain monitoring
The European Commission provides detailed guidance on EUDR implementation, including information systems, compliance timelines, and due diligence requirements. These resources explain what evidence regulators will expect and how the enforcement system will work.
The UK government offers guidance on importing plant products and related environmental requirements. While the UK has not implemented EUDR directly, similar due diligence expectations apply through existing regulations and may expand as policy develops.
The Roundtable on Sustainable Palm Oil provides certification standards, traceability tools, and guidance for members. The organization supports companies in implementing deforestation-free sourcing practices and connects buyers with certified suppliers.
IEMA publishes resources on sustainable procurement that address supply-chain due diligence, risk assessment, and supplier engagement. These practical guides help businesses build capability across their procurement functions.
For companies needing support with carbon reporting, supply-chain sustainability, and compliance frameworks, sustainable procurement services can help integrate deforestation-free sourcing into broader environmental management systems.