For a number of years, Hershey’s has been targeted by campaigners for their lack of action on responsible cocoa sourcing. One would think that this bad publicity, in the middle of the crucial Valentine’s Day selling season, would be enough to make Hershey’s give in and switch to Fairtrade. It seems that all its competitors are – one after the other – adopting certification: Fairtrade for Cadbury’s and KitKat, Rainforest Alliance for Galaxy’s. So why are Hershey’s still reluctant to take action?
For campaigners and consumers, it might be difficult to understand just how overwhelming responsible sourcing can be. For a company with hundreds of ingredients and tens of thousands of suppliers, tackling child labour in the supply chain is no easy task. In addition, will the Fairtrade stamp really be the silver bullet that will end all of Hershey’s labour issues?
So in the face of this complexity, what can Hershey’s do? A good place to start would be a full risk and opportunity assessment of its supply chain. Based on this, a process of strategic and prioritised supplier engagement can be implemented. Working closely with key suppliers, monitoring performance and progressively influencing practices has proven to be the most effective path to mutual benefit for environmental issues, as illustrated by the latest Carbon Disclosure Project report’s results. This model is also very promising for social and labour issues. Once these strong foundations are in place, companies can move on to the more advanced options such as adopting certification, or integrating sustainability criteria into supplier selection processes.
A premature Fairtrade certification risks giving consumers the false impression that all issues have been addressed. Rather, it should be one part of the wider ethical trade puzzle.
Having said that, the “Raise the Bar” campaign might be slightly less engaging if its called “Make a Puzzle”. Creative ideas anyone?
Myriam Galopin is a Consultant at Corporate Citizenship.
BT launched it’s new climate change procurement standard in March, one of the first of its kind in the UK. All contracted suppliers are expected to make carbon commitments as part of BT’s wider commitment to reduce carbon emissions across the whole of its operations. The climate change standard has three key requirement of BT suppliers: that they have a policy in place to address the challenge of climate change; that they are actively measuring and reporting on carbon and other relevant emissions; and that they set challenging targets for emission reductions and report on their progress against these. Prior t to the introduction of the new standard, BT has held free workshops with suppliers to share best practice and assist them with carbon management. In 2010, BT spent £12 billion with thousands of suppliers across the world, making the potential impact of this standard huge.
Financial services firm Danske Bank Group has pledged to screen its entire supplier base for sustainability and ethical credentials by the end of 2011. According to the Bank’s recently released 2010 Corporate Responsibility report, all new suppliers must meet sustainable sourcing conditions and existing suppliers will be assessed by the end of 2011. On the basis of an initial screening, all existing suppliers will be categorised as low, medium or high risk. Dialogue will be initiated with high risk suppliers and those that do not meet requirements. The Group’s procurement department will then decide whether to liaise further to encourage positive change or to end contracts and “exclude the supplier from the Group’s procurement universe”.
Hershey urged to be more proactive on child labour
US chocolate company Hershey has come under attack for failing to take steps to avoid the occurrence of trafficked child labour in its supply chain. Non-profit campaign group Green America used Valentines Day to target the company and urged consumers to avoiding buying Hershey’s famous kisses to mark the occasion. Green America’s ‘Raise the Bar Hershey!’ campaign encouraged consumers to send the company a Valentines Day card urging the company to take more proactive steps against trafficking and child labour and to seek Fairtrade certification for its cocoa sourcing. Unlike other leading chocolate manufactures including Cadbury and Mars, Hershey has not adopted any sustainable or ethical certification for any of its chocolate.
Palm oil giant Golden Agri agrees to protect forests
The world’s second largest palm oil company Golden Agri-Resources (GAR), part of the Sinar Mas group, has agreed partnerships with non-profit The Forest Trust and the government of Indonesia to protect the Indonesian rainforests from which it sources palm oil. GAR has developed a Forest Conservation Policy in collaboration with The Forest Trust aimed at creating a more sustainable palm oil industry while boosting the Indonesian economy and increasing the living standards of local communities. The policy also aims to ensure that GAR has a zero deforestation footprint. The agreement has been cautiously approved by Greenpeace, a long term high profile campaigner against unsustainable palm oil sourcing. Greenpeace will monitor GAR’s compliance with the policy.
The Carbon Disclosure Project’s 2011 Supply Chain Report has found that over 50% of large businesses and 25% of their suppliers have seen cost savings due to improved carbon management. The survey looked at the carbon management supply chain activities in 2010 of the 57 members of its Supply Chain programme and 1000 of their suppliers. 86% of companies surveyed worked with suppliers on carbon related activities and saw commercial benefits from doing so, up from 46% in 2009. The number of businesses training procurement staff in sustainable sourcing has risen from 26% in 2009 to 41%. Carbon management criteria are increasingly being included within the supplier selection process, up to 17% from 11% with 29% of respondents expecting it to be included in five years time. The CDP estimates that at least 50% of most companies’ carbon emissions come from their supply chain.
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