You’d be hard-pressed to find a major corporation that doesn’t have an environmental, social, and governance (ESG) program to ensure that it operates responsibly. Not only do investors and regulators demand it, but ESG programs are also good for business. Many such programs now reach beyond the company itself and into the supply chain, ensuring that producers and suppliers meet sustainability and human rights standards.
As noted in a January blog by EisnerAmper, a London-based advisory and accounting firm, incorporating ESG factors into supply chain management can help companies “identify and mitigate” risks.
Photo Courtesy EisnerAmper
For example, by monitoring labor practices in its supply chain, a company can “identify and address potential human rights violations before they become a public relations problem,” the blog said. “By mitigating these risks, companies can protect their reputation and avoid costly legal settlements or penalties.”
The same holds true when it comes to monitoring sustainability practices along the supply chain to weed out environmental violations.
Many large companies are taking things further by actively engaging with suppliers and producers to improve their lives and livelihoods. That’s the case with a new program launched by The Hershey Company, the Pennsylvania-based snack and chocolate giant.
Hershey’s program called the Income Accelerator, was announced on April 27. It aims to support increased incomes for cocoa farming households in Côte d’Ivoire by providing cash transfers (CTs) and investments in village savings and loan associations (VSLAs).
Photo Courtesy The Hershey Company
As part of the Income Accelerator, Hershey will partner with the Rainforest Alliance to distribute mobile cash transfers of up to $600 per household per year to about 5,000 cocoa farming households within its supply chain, according to a press release. The CTs will provide “an additional source of income” for homes.
To earn the money, households must adopt sustainable and regenerative farm management practices that increase farm profitability and resiliency to unexpected environmental events.
Photo Courtesy The Hershey Company
“The Income Accelerator is part of Hershey’s long-term commitment to make a real difference in the lives of cocoa farmers and their children,” Jason Reiman, Hershey’s Chief Supply Chain Officer, said in a statement. “We are proud to begin this important initiative in collaboration with the government of Côte d’Ivoire and our (non-governmental organization) partners. Together, we can support better livelihoods for farming households and ensure bright futures for cocoa-growing communities.”
Food Dive reported that Hershey will also work with Côte d’Ivoire government agencies and NGOs through public-private partnerships to invest in constructing 10 primary schools in cocoa-growing communities. Another program will work to preserve the country’s Mabi-Yaya Nature Reserve.
Photo Courtesy The Hershey Company
Most of the world’s cocoa production comes from Côte d’Ivoire and Ghana in West Africa. This region has “long been plagued by child labor concerns, environmental worries, and allegations that companies that depend on producers have not done enough to help them financially,” according to Food Dive.
“Low producer income is a root cause of child labor and deforestation,” Yves Brahima Koné, Managing Director at Conseil du Café-Cacao, said in a statement. “We support this Income Accelerator program because the issue of producer income is at the heart of our concerns.”
Child labor is an ongoing concern in the global supply chain, especially in Africa. As Tech Monitor reported last year, in 2019, human rights lawyers “launched a landmark legal case” against Apple, Google, Dell, Microsoft, and Tesla on behalf of 14 parents and children from the Democratic Republic of Congo. The case alleged that the companies were “complicit in the deaths of children working in cobalt mines in their supply chain.”
Among the large companies that aim to improve supply-chain working conditions is Adidas, the German athletic apparel and footwear manufacturer.
In 2022, Adidas launched a social impact key performance indicator (S-KPI) tool that measures suppliers’ social impact performance against social indicators, such as accident rates, worker satisfaction, and worker empowerment.
That followed the 2018 launch of Worker Empowerment initiatives designed to “further engage” workers in its supply chain through feedback tools, skills training, worker surveys, and digital training.
Photo Courtesy Adidas
