Nestlé outlines its cocoa sustainability commitments with publication of Annual Report
The full Annual Report contains Nestlé's Annual Review as well as its Corporate Governance & Compensation Reports and Financial Statements, which were published on 16 February 2023 and revealed group sales of CHF 94.4 billion ($ 102.36bn last year, a 8.3% increase in organic growth terms, while trading operating profit stood at CHF 13.2 billion.
Outlined in its 'Good for the Planet' work, Nestlé further reduced greenhouse gas emissions to below its 2018 baseline and claimed it is now well beyond peak carbon. The company achieved this result while growing its business substantially and said it has increased its use of renewable electricity last year and is on track to achieve 100% renewable electricity by 2025.
The company said it remains focused on achieving its deforestation-free commitment, including progressing toward having its cocoa and coffee supply chains assessed as ‘deforestation-free’ by 2025. It will also continue to collaborate and promote best practices through external initiatives including the Consumer Goods Forum Forest Positive Coalition, the Cocoa and Forest Initiative and the Tropical Forest Alliance.
Nestlé Cocoa Plan
Nestlé said it is also committed to 100% cocoa sourced through its Nestlé Cocoa Plan by 2025 and in 2022 it claimed to have worked closely with human rights external expert organisations and saw progress on existing programmes that address human rights. During the year, the volume of cocoa sourced through the Nestlé Cocoa Plan increased to 68.3% of total cocoa sourced. The plan extended its coverage in Brazil and the groundwork was laid to bring producers in Cameroon and Nigeria into the plan. The programme is designed to improve livelihoods in cocoa-growing communities, covering 3,462 farmers in Brazil.
“The Nestlé Cocoa Plan has long been innovative. We were the first company in the cocoa sector to introduce a Child Labor Monitoring and Remediation System (CLMRS) in our supply chain and many companies have now adopted this as a leading tool for tackling child labour risks by working directly with communities on the ground,” it said.
Why farmers’ incomes matter
Nestlé said it is working to help address a number of risks in its supply chains, from child labour to deforestation. “Often, these challenges seem unrelated. Yet there is often a common underlying cause: poverty.” The Nestlé Cocoa Plan will continue to expand worldwide, notably in Brazil, Cameroon, Ecuador, Mexico and Nigeria, the report confirmed. “Over the years, we have worked to help improve the livelihoods of smallholder farmers by promoting income diversification, improving productivity, empowering women and creating village savings and loans associations – often in places with no access to banking services.”
In early 2022, the Nestlé Cocoa Plan announced the launch of an innovative income accelerator programme, primarily to help tackle child labour risks and said: “Our CLMRS prioritises access to education, including building and renovating schools and securing birth certificates for registration. The CLMRS is a multi-stage process that starts with raising awareness. Community Liaison People visit farmers and cooperatives and, based on visits and surveys, identify children at risk.
“We carry out follow-up visits with each of these children and record the number who report that they are no longer at risk during two consecutive visits. In 2022, the number of children identified who reported no longer engaging in activities posing a risk of child labour at the two most recent follow-up visits was 8,155 in Côte d’Ivoire and 819 in Ghana. In the last year, the Nestlé Cocoa Plan expanded its reach to cover 68.0% of Nestlé’s cocoa supply (up from 50.6%) last year, including a greater presence in Brazil."
Nestlé has also committed to setting a global target for the ‘healthier’ part of its portfolio later this year and has benchmarked its products against the Health Star Rating (HSR) system, a nutrient profiling system used by the Access to Nutrition Index. The results show that Nestlé products with an HSR rating of 3.5 stars and above, together with its specialised nutrition products, like infant or medical nutrition, account for close to 60% of the company’s sales (excluding Nestlé’s pet care business).
The company said it will complement this strategy with more stringent responsible marketing practices as well as nutrition education programmes and services to help people enjoy all foods as part of a balanced diet – but said it has no plans to turn indulgent products, such as chocolate, into health products. But reformulation efforts persist.
- Download Nestlé's 2022 Sustainability Report here