Global food and beverage company Nestlé announced today a series of initiatives aimed at enhancing the sustainability of its cocoa supply, including a program providing financial incentives to cocoa-farming families aimed at addressing the risk of child labor in the supply chain. Overall, Nestlé said that it plans to invest CHF1.3 billion (USD $1.4 billion) through 2030 to expand its cocoa sustainability efforts.
Nestlé, home to leading chocolate brands including Kit Kat and Nesquick, is one the world’s largest corporate cocoa consumers, sourcing roughly 430,000 tons per year, with much of the supply sourced from Ghana and the Ivory Coast, countries which have become notorious for their use of child labor over the past several decades. According to the company, numerous factors contribute to the risk of child labor on family cocoa farms, including poverty, increasing climate risks, and lack of access to water, health, education and financial services.
One of the key initiatives launched by Nestlé in order to address the child labor risk is the income accelerator program, aimed at helping support farmers and their families in their transition to more sustainable cocoa farming. The program, piloted in 2020 with 1,000 families, provides direct financial incentives to families for activities and agricultural practices designed to steadily build social and economic resilience over time. Under the program, families will receive up to CHF 500 annually for enrolling children in school, implementing good agricultural practices which increase crop productivity, performing agroforestry activities to increase climate resilience, such as planting shade trees, and generating diversified incomes, including growing other crops or raising livestock. The program will expand to 10,000 families in 2022, and aims to reach all cocoa-farming families, estimated at 160,000 families, across its global cocoa supply chain by 2030.
Mark Schneider, Nestlé CEO, said:
“Our goal is to have an additional tangible, positive impact on a growing number of cocoa-farming families, especially in areas where poverty is widespread and resources are scarce, and to help close the living income gap they face over time. Building on our longstanding efforts to source cocoa sustainably, we will continue to help children go to school, empower women, improve farming methods and facilitate financial resources. We believe that, together with governments, NGOs and others in the cocoa industry, we can help improve the lives of cocoa-farming families and give children the chance to learn and grow in the safe and healthy environment they deserve.”
Nestlé stated that it aims to transform the global sourcing of cocoa to achieve full traceability and segregation of its cocoa products from origin to factory. Starting with selected Kit Kat products in 2023, the company will introduce products with cocoa sourced from the new program.
Magdi Batato, Executive Vice President and Head of Operations at Nestlé, said:
“Our actions can help catalyze change on an important topic that is so close to our hearts. They will drive accountability and transparency across the industry, at a time when customers, employees and communities increasingly expect companies to deliver on their shared values. By increasing traceability at scale, we will help build consumer trust in our products and respond to the growing demand for responsibly and sustainably sourced cocoa.”
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