The bulk of a company’s environmental footprint — not to mention risk and expenses — occurs beyond the factory walls, in the supply chain.
So when it comes to managing risk, expenses and environmental impact, it makes sense to look at suppliers.
Cargill, Hershey’s, Mars, Mondelez International and Nestlé are among the latest multi-nationals to target sustainable supply chain initiatives. These companies, along with seven other major cocoa and chocolate companies, have committed to work with each other, alongside governments and NGOs, to end deforestation and forest degradation in the global cocoa supply chain. They will initially focus on Côte d’Ivoire and Ghana, the world’s leading producers of cocoa.
Deforestation represents a significant risk to these companies: as much as $906 billion total annual turnover could be at risk because of deforestation, according to a CDP study based on data disclosed by 187 companies last year.
To achieve this goal, the companies plan to develop a joint public-private framework of action to address deforestation at the United Nations Framework Convention on Climate Change 23rd Conference of the Parties (COP23) meeting in Bonn in November. The framework will include actions such as investing in more sustainable forms of landscape management, partnering with others to protect and restore forests in the cocoa landscape, and investing in programs to improve cocoa productivity for smallholder farmers working in the cocoa supply chain.
Other participating companies include Barry Callebaut, Blommer Chocolate Company, CEMOI, ECOM, Ferrero, Olam and Touton. The UK’s Prince Charles convened the meeting to address deforestation last week.
“Cocoa is highly susceptible to climate change, with increases in temperature and reduced rainfall putting this critical input to chocolate at risk,” said Michele Buck, president and CEO of the Hershey Company. “The pre-competitive initiative we are announcing today, in partnership with industry, governments, NGOs, farmers and other stakeholders is one of the best opportunities to achieve our goal of ending deforestation and counteracting the effects of it in the cocoa supply chain.”
Cargill has committed to ensuring a sustainable supply of several of its commodity crops including cocoa, cotton and palm oil, along with beef, aquaculture and poultry. Harold Poelma, president of Cargill cocoa & chocolate, says the company is working with partners and governments to improve the sustainability of the cocoa sector.
“In collaboration with World Resources Institute, we have conducted a baseline risk assessment, assessing over 2.3 million hectares with GPS technology to prioritize interventions and advance sustainable landscape approaches to mitigate deforestation and protect biodiversity,” Poelma said.
The chocolate companies’ announcement comes as several other multi-nationals have recently developed similar forest products policies that extend to their supply chains. These include VF Corporation, Ralph Lauren, H&M, Zara, Stella McCartney, ASOS, Levis Strauss & Co.