Why at supply chain source, the environmental is inseparable from the social

Michael Holder
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Why at supply chain source, the environmental is inseparable from the social

BusinessGreen's Michael Holder explains why a sustainable and climate-resilient supply chain cannot survive long-term unless communities on the ground reap some of the benefits

For those working in the finance sector or at some larger corporates, placing environmental issues into the same in-tray alongside those marked 'social' and 'governance' is a commonplace practice.

From the outside looking in, though, lumping these three vast and disparate business areas under the same heading - ESG - can appear illogical. Lazy even, some might say, reflecting a company which doesn't take these issues particularly seriously in isolation so has instead put up a signpost which roughly translates as: 'Here's all the ethical stuff we have to do a bit of but it isn't really top of our agenda.'

But having travelled to Ghana last week to see first-hand some of the complex work being undertaken to improve the environmental footprint of that most perenially popular product - chocolate - it's become a little clearer why the E, S and G are often wedded together.

Specifically, the brief has been to learn more about Cadbury-owner Mondelez's attempts to improve the sustainability of its supply chain through its Cocoa Life initiative, but many of the overriding challenges experienced by Mondelez in Ghana are similar to those faced across industries such as fashion, food and electronics.

For Mondelez, the motivation to invest $400m in the Cocoa Life initiative comes largely from needing to safeguard the future of the cocoa industry, ensuring it is more resilient to climate change and the economic ups-and-downs of developing nations. As a huge company which owns some of the world's best-known chocolate brands, it is of critical importance for Mondelez to address these issues in its supply chain, or it risks killing the goose which lays the golden egg.

In addition to that, of course, more consumers and businesses are demanding transparency about where their products come from, and whether they meet certain ethical standards. Corporates meeting these demands and developing better understanding of their supply chain, of course, can then better manage what they do and deliver efficiencies. 

But operating a sustainable and more climate-friendly supply chain requires a company to address a range of wider issues beyond simply improving environmental practices. And, at Mondelez's headquarters in Ghana's capital, Accra, this week, the complexity of fostering greener thinking among the developing country's many cocoa farmers was clearer than ever.

In order to deliver Cocoa Life sustainability standards on the ground in Ghana alone, Mondelez has partnered with several government bodies and eight different NGOs, each with different areas of expertise covering a vast array of environmental, social and economic areas.

All the delivery partners came together at Mondelez's Accra office last week, as they do frequently, to sit down and share their experiences and best practice towards their overarching aim of developing sustainable cocoa growing communities.

They included the Ghana Cocoa Board; aid and development organisation World Vision Ghana; women's advocacy group ABANTU for Development; humanitarian agency Care International; and children's charities Right to Play and Child Rights International, among others.

Clearly, given the breadth of differing expertise at the meeting and associated discussions ranging from children's rights and community business practices to empowering women farmers, Cocoa Life - and indeed any work to boost sustainable business practices - isn't all about improving the environment. Yet paradoxically, at the same time it is.

If the company wants to preserve its supply of cocoa for the long term, it has to give the farmers and their communities the tools and training to use more environmentally friendly farming practices, increase yields and boost the resilience of cocoa plants to climate change. As these NGOs well know, that means giving farmers more of a stake and understanding of their part in the industry, and providing them with better wages, better living conditions, and more reason for families to stay together in the cocoa-producing communities.

No farmers mean no cocoa for Cadbury chocolate, and investment in training one generation of farmers is wasted unless the next generation also wants to farm cocoa and can see it as a positive livelihood. So for Mondelez, it is important to empower both women and men in farming communities; to build schools and other infrastructure for their families; and to generally make cocoa farming a more attractive prospect for younger people.

In short, the environment in cocoa-producing countries - and the source of Mondelez's vast chocolate empire - cannot thrive for the long term with poor farming and environmental practices. And good environmental practices won't be adhered to by farmers who aren't given the wherewithal. And a sustainable and climate-resilient supply chain cannot survive for the long term in communities which do not reap some of the benefits of the industry they feed.

It's undoubtedly a huge challenge for major corporates of global industries to put all these pieces of the puzzle together and make it work on the ground, and Mondelez still faces many problems with a great deal of work ahead to put its Cocoa Life principles into practice. But businesses are now increasingly realising that they have no choice but to confront the challenge, and that investment and time doing in so is well spent when their industry depends on success in delivering sustainability.

On the one hand, certainly, it demonstrates just how exceedingly complex delivering a greener business and supply chain is. But on the other, once businesses see the kind of impact certain development initiatives can have, the whole enterprise is far more rewarding - and also a story worth telling.

Stay tuned for more insights this week from Michael Holder's trip to Ghana, which was paid for by Mondelēz International. 

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