Our key ingredient fairness

Transcription

1 Purchasing Our key ingredient fairness Chocolats Halba pursues a sustainable corporate strategy along the entire length of its value chain. The raw materials required to manufacture its specialties, such as cocoa, cane sugar and hazelnuts, largely originate in remote, extremely diverse countries. Our purchasing experts often face huge economic, social and environmental challenges. Chocolats Halba is committed to fair, sustainable sourcing and relies on maximum transparency and traceability SUSTAINABILITY REPORT 22

2 Purchasing Objectives What we have achieved Chocolats Halba developed its sustainability strategy in conjunction with its stakeholders, thereby setting itself some ambitious goals. At the beginning of our value chain are the cocoa farmers and their plantations. Treating them fairly is a fundamental factor for our success. In accordance with our sustainability strategy, we seek to achieve sustainable sourcing along the entire chain. In this way, we have already achieved a good deal objectives 2016 status 2015 status Comment Action planned Well on the way Cocoa beans: 100% fair. 94% 98% Chocolats Halba buys only certified Fairtrade cocoa beans from all countries except Honduras. Fairtrade certification for all cooperatives in Honduras that supply Halba. Well on the way Cocoa butter: 100% certified to international standards and/ or 100% traceable. 98% 86% Certifications: 63% Fairtrade, 21% UTZ, 14% Organic plus Fairtrade. Achieved Palm oil: 100% sustainable. 100% 100% Palm oil: 100% Certified as RSPO-segregated. Not achieved Soya lecithin: 100% sustainable. 0% 0% Use of soya lecithin has been reduced as much as possible target couldn t be reached due to personnel changes. Sustainability strategy : Development of a new target for procurement of sustainable soya lecithin. Not achieved Hazelnuts: 100% sustainable. 7% 2% 7% hazelnuts certified organic. UTZ hazelnuts only available since % UTZ hazelnuts by the end of Achieved At least one reforestation project in each cocoa-buying country. 100% 100% Countries: Ecuador, Honduras, Peru, Ghana. Continue to progress with pilot project in Ghana. Not fully achieved Plant at least 500,000 timber trees in partnership with cooperatives. 308, ,136 Countries: Honduras, Peru and Ghana. There are plans for additional reforestation projects SUSTAINABILITY REPORT 23

3 Purchasing Cocoa Purchasing with a plus for all Due to its outstanding economic importance and also the environmental and social risks involved, Chocolats Halba focuses its attention primarily on cocoa when it comes to purchasing. The best way to secure high quality in the long term is by buying directly and responsibly. Chocolats Halba therefore buys almost exclusively Fairtrade-certified cocoa butter and beans from cooperatives. The cocoa tree (Theobroma cacao) originates in the primeval forests of Central and South Africa. Today, an estimated five million small-scale farmers in West Africa, Asia and Latin America produce 95% of the cocoa enjoyed throughout the world. Despite growing demand, farming families still lack a stable income with which they can cover their most pressing needs. Their acreage is small, and their harvests are modest. They also have to contend with wildly fluctuating market prices. Where our Cocoa comes from Honduras 2 Ecuador 3 Peru 4 Ghana Cocoa growing regions 2016 SUSTAINABILITY REPORT 24

4 Purchasing Cocoa Cocoa products account for around 40 percent by weight of the raw materials purchased by Chocolats Halba. We prioritize the procurement of cocoa, as it is a significant component, and its cultivation and trading contains environmental and social risks. We buy our cocoa mostly in the form of beans, processing them in our own plant to produce cocoa mass, which forms the basis for our wide range of chocolate specialties. Fairtrade In 2016, Chocolats Halba bought a total of 2,197 tonnes of cocoa beans from its partner cooperatives. Almost two-thirds originated from Ghana, with the remainder coming from Ecuador, Peru and Honduras. In addition to cocoa beans, Halba bought a total of 114 tonnes of Fairtrade cocoa mass and 43 tonnes of organic and Fairtrade-certified cocoa mass from other countries in In so doing, it is supplementing its range of origin-specific chocolates Sustainably certified cocoa butter 98% Cocoa butter is the second most important raw material used in manufacturing chocolate. In 2016, Chocolats Halba purchased a total of 2,487 tonnes of it. 98 percent of this was certified as sustainable 77 percent Fairtrade (19 percent also organic) and 21 percent UTZ. Only 2 percent of this cocoa butter was not certified, as it was ordered back in 2015 but not delivered until Since the beginning of 2016, Halba has only purchased certified cocoa butter SUSTAINABILITY REPORT 25

5 Purchasing Cocoa Since 2010, Chocolats Halba has hugely increased the quantities of Fairtrade beans and butter it has bought (see figure on page 29). Our declared objective of achieving a fully certified cocoa supply chain is within our grasp. However, the percentage of Fairtrade-certified cocoa beans fell slightly to 94 percent in the year under review. The reason for this is that many cooperatives in Honduras only produce very small quantities, so they do not undertake the time-consuming and costly task of certification. However, Halba pays Fairtrade minimum prices and premiums for non-certified cocoa beans as well. Direct relations Worldwide demand for cocoa is growing. At the same time, climate change and non-sustainable cultivation methods are threatening the supply of high-quality cocoa. Added to this, labor-intensive cocoa farming does not appear very attractive to younger generations. Against this backdrop, Chocolats Halba is concentrating its business and sustainability strategy on securing the sourcing of its key raw material. The most effective way of safeguarding long-term supplies of high-quality cocoa is to buy it directly. Therefore, Chocolats Halba keeps its supply chain as short as possible and purchases a significant amount of cocoa beans directly from the cooperatives. In Ghana, the political conditions do not allow direct purchasing from individual cooperatives. Despite this, we are working closely there with our partner cooperative Kuapa Kokoo. We are linked to Chocolats Halba by a long-standing partnership based on loyalty and shared strategic goals. The company s partnership and commitment to the longterm development of the cocoa sector goes way beyond simply buying fair-trade cocoa. With the new Dynamic agroforestry pilot project, we are jointly sending out a clear signal for the future of our cocoa. Fatima Ali, President Kuapa Kokoo 2016 SUSTAINABILITY REPORT 26

6 Purchasing Cocoa Washington León Haro and Marlon Mora, employees of the UNOCACE in Ecuador, sorting and bagging cocoa beans for shipping. The cocoa beans have already been fermented, dried and quality tested SUSTAINABILITY REPORT 27

7 Purchasing Cocoa Variety, soil and climate, cultivation method and cocoa bean processing all have a decisive impact on flavor and quality. By working closely with its partner cooperatives, Chocolats Halba gains a detailed insight into the local farming and processing methods. By giving farmers specific training and investing in the post-harvest infrastructure, Chocolats Halba is able to safeguard the quality of the cocoa beans it buys. Our procurement and sustainability experts are in constant contact with the cooperatives and visit them regularly. If problems arise in the farming areas, Halba helps to identify causes and solutions. And the agroforestry projects that Chocolats Halba has initiated together with cooperatives in Honduras, Ecuador and Ghana are helping to secure the long-term productivity and quality of cocoa plantations. Farmers in the Kuapa Kokoo cooperative in Ghana spread their freshly fermented cocoa out to dry SUSTAINABILITY REPORT 28

8 Purchasing Cocoa Promoting premium varieties For manufacturing high-quality dark chocolate, Chocolats Halba uses premium original Latin American varieties of cocoa. However, these are being increasingly displaced by more robust varieties whose taste cannot compete with the diverse flavors of premium cocoa varieties. For this reason, Chocolats Halba is promoting the cultivation of the original premium cocoa variety Cacao Nacional Arriba in its FINCA agroforestry project in Ecuador. This mixed cultivation approach is also particularly useful for safeguarding the supply of high-quality premium cocoa. 98% sustainably certified cocoa butter 94% sustainably certified cocoa beans 100% % % 60% 40% 20% % % 40% 20% % % In 2016, Chocolats Halba bought 98% of its cocoa butter from sustainably certified production. The percentage of Fairtrade-certified cocoa beans declined slightly as some cooperatives in Honduras are not yet Fairtrade-certified due to their low production volumes SUSTAINABILITY REPORT 29

9 Purchasing Additional raw materials Ingredients with no after-taste As well as cocoa, good chocolate calls for a range of additional choice ingredients from Switzerland and abroad. Although these raw materials are used in lesser quantities, Chocolats Halba still considers the ecological and social risks involved in their procurement and draws up suitable strategies. Hazelnuts Nut chocolates have always been extremely popular. In 2016, Chocolats Halba purchased the considerable quantity of tonnes of hazelnuts. But these nuts are linked to social risks: in the main growing areas in Turkey, working conditions are often poor. Exploitative child labor also takes place. To prevent human rights violations in the supply chain, Chocolats Halba relies on certifications. Since UTZ-certified hazelnuts only reached the market in 2017, we haven t reached our target of 100% UTZ-certified hazelnuts yet. We will increase the share of UTZ-certified hazelnuts from risk countries to over a third until the end of 2017, and to over fifty percent until mid Over the next few years, we are going to intensify our relationship with suppliers in Turkey to gain a clear insight into the local situation there and help our partners to adhere to social production standards. In addition, over 50 percent of the hazelnuts we buy will be UTZcertified by mid Daniel Böni, Head of Procurement, Chocolats Halba 2016 SUSTAINABILITY REPORT 30

10 Purchasing Additional raw materials Palm oil To create lucrative palm plantations, tropical forests are cut down, and soils and water are contaminated with pesticides. Working conditions are also frequently questionable. Therefore Chocolats Halba does not use any palm fat in its chocolate bars. In many of the products that we manufacture in line with the most stringent sustainability standards, we have switched to using sustainably produced and certified cocoa fat instead, processing 112 tonnes of it in But for certain fillings we still use palm oil because there is no equivalent alternative for it. Palm oil has outstanding melting properties, a neutral taste and is solid at room temperature. All the palm oil we buy is certified in accordance with the criteria of the international Roundtable on Sustainable Palm Oil in 2016 this amounted to 139 tonnes. The palm oil we use that is designated as RSPO-segregated comes directly from sustainably managed plantations. Soya lecithin In 2016, Halba purchased a total of 34.4 tonnes of soya lecithin. In foodstuffs, this natural emulsifier ensures that fat-based and water-based ingredients combine well together. Chocolats Halba uses soya lecithin in selected products as it has particularly good melting properties. Worldwide demand for soya is growing steadily. The sharp increase in its acreage over recent years, especially in South America, is creating environmental and social problems. For example, rainforests are being cut down, species diversity and soil fertility are suffering, and the use of pesticides is endangering the health of agricultural workers. So despite the comparatively small quantities of soya lecithin it uses, Chocolats Halba attaches great importance to sourcing it sustainably. We have therefore reduced the use of soya lecithin as much as possible but, due to personnel changes, haven t reached our sustainability target yet. Chocolats Halba is currently developing a new sustainability target for the procurement of sustainable soy lecithin that will be included in the sustainability strategy SUSTAINABILITY REPORT 31

11 Purchasing Additional raw materials Purchasing volume of sugar in t Sugar With a purchasing volume of 5,315 tonnes (2016), sugar is the second most significant raw material for Chocolats Halba in terms of quantity behind cocoa. 3,186 tonnes of the sugar it bought originated from Switzerland and was made from sugar beet. Halba also imported 703 tonnes of organic/ Fairtrade cane sugar from Paraguay and 932 tonnes of Fairtrade cane sugar from Costa Rica. Raisins, vanilla, etc. In addition to the raw materials mentioned here, raisins, vanilla, almonds and milk are also among the raw materials that play a role in the sustainable production of chocolate. Based on experiences with our ongoing strategy, we are developing a detailed watch list as part of the sustainability strategy, which contains concrete measures for the responsible purchasing of these raw materials SUSTAINABILITY REPORT 32

12 G4-LA15 Purchasing Certification Close scrutiny Chocolats Halba uses established audited standards to create transparency and trust in its procurement processes. Depending on the origin of the raw material and the conditions that prevail when it is produced, we decide what type of certification is needed. When doing so, we take particular account of social and environmental criteria. Certification plays an important role in the globalized economy. Independent organizations check that the manufacturing process and the products supplied meet agreed standards. These days, there are a large number of labels for various products and processes. Most of them focus on one particular aspect, although the requirements of some do overlap. To create transparency for customers and business partners and to achieve its sustainability goals, Chocolats Halba uses a range of widespread, internationally established standards. But it is not possible to buy all certified raw materials in sufficient quantities or quality, or at an acceptable price. For this reason, Chocolats Halba has set itself different goals in its sustainability strategy depending on the raw material and certification involved SUSTAINABILITY REPORT 33

13 G4-LA15 Purchasing Certification Fairtrade The Fairtrade standard, which is also known in Switzerland as Max Havelaar, principally guarantees acceptable social conditions for products originating from the Global South. Fair minimum prices and purchase guarantees strengthen local producers, and Fairtrade premiums finance local social projects. The Fairtrade standard also lays down basic environmental requirements. At regular audits, independent inspectors check whether producer organizations are adhering to guidelines. 94 percent of the cocoa beans that Chocolats Halba bought in 2016 were Fairtrade-certified. For cocoa butter, this figure was 77 percent. The sugar that Chocolats Halba bought from outside Switzerland was all Fairtrade-certified. Fairtrade cocoa beans 94% 2016 SUSTAINABILITY REPORT 34

14 G4-LA15 Purchasing Certification Strong producer organizations are the key to self-determination. Fairtrade supports this through democratically organized small farming cooperatives. This enables farmers to come together to gain a stronger position in the market. The guaranteed minimum price also ensures security, and the additional Fairtrade premium makes important investments possible. Fabian Waldmeier, Head of International Cooperation, Max Havelaar Foundation (Switzerland) UTZ The UTZ certification standard for good farming practice is an independent certification for cocoa, coffee, tea and, since 2016, hazelnuts. The label has expanded significantly over recent years, and our customers are increasingly demanding it. UTZ certification focuses on increasing productivity in agricultural production, which is intended to improve the living conditions of the producers and their families. Producers must also adhere to minimum environmental and social standards in order to be certified. Independent bodies conduct annual checks to establish whether producers are adhering to the code of conduct. By buying cocoa butter and hazelnuts bearing the UTZ label, Chocolats Halba wants to ensure that no human rights violations occur during the production of the raw materials it purchases, and that minimum environmental standards are observed SUSTAINABILITY REPORT 35

15 G4-LA15 Purchasing Certification Palm oil certified as RSPO-segregated 100% RSPO The Roundtable on Sustainable Palm Oil (RSPO) is an international organization that seeks to establish long-term, widely applicable solutions for the more environmentally and socially responsible cultivation of palm oil. In addition to environmental associations and other NGOs, its members primarily include businesses and institutions in the palm oil value chain, such as plantation owners, traders and industry buyers. RSPO auditors check whether producers are respecting local legislation and minimum environmental and social requirements. In its production, Chocolats Halba uses exclusively certified palm oil that is additionally endorsed as Segregated. Organic Organic labels denote the produce of controlled organic farming. There is now a whole range of such certification marks, including the Bio Suisse bud that is widely used in Switzerland, and that places stringent requirements on licensees. All the organic raw materials that Chocolats Halba buys, including over one third of all its cocoa beans, are certified in accordance with strict Bio Suisse criteria SUSTAINABILITY REPORT 36

16 G4-LA15 Purchasing Certification BSCI The Business Social Compliance Initiative (BSCI) is an international business initiative that aims to safeguard decent working conditions worldwide such as appropriate remuneration, contractual working hours and basic employee rights by means of a code of conduct. This also includes a ban on child labor. Chocolats Halba demands adherence to the BSCI requirements of all processing facilities based in risk countries. SA8000 The SA-8000 standard is based on the International Convention on Human Rights and recommendations made by the United Nations International Labour Organization. These guidelines include strict requirements in the fields of working conditions, freedom of association and respect for human rights. Independent certification organizations make regular checks directly in the companies to ascertain whether the standards are being met. These checks include interviews with employees and with stakeholders outside the company, for example, trade unions. Chocolats Halba uses SA-8000 in particular when buying hazelnuts all the hazelnuts it buys are certified either in accordance with BSCI (see above) or SA FSC Cardboard and paper are obtained from wood. Since 2012, all of Chocolats Halba s paper-based packaging has been made from recycled material or has been FSC-certified. The Forest Stewardship Council (FSC) campaigns for sustainable forestry around the globe. This non-profit organization has developed standards for environmentally and socially responsible forestry. Independent certification bodies ensure that all FSC-certified businesses meet the requirements for this standard SUSTAINABILITY REPORT 37

17 Purchasing Environment Added value for the climate and for diversity Our most important raw materials are agricultural products that are directly dependent on an intact environment. Climate change is therefore a huge challenge for cocoa farming. Increasing deforestation and the spread of monoculture are exacerbating the situation. Chocolats Halba is not only committed to emitting fewer greenhouse gases in its production process, but is also actively involved in efforts to protect the climate in cocoa-growing countries. Huge challenge Scientists are undecided whether global warming is also influencing the frequency and intensity of large-scale weather phenomena such as El Niño. But what is certain is that climate change is already being felt. For example, droughts and floods are on the increase and both of these weather extremes have an enormous influence on agricultural harvests. The cocoa harvest times in Central America have shifted, for instance. Whereas 2015 was markedly dry, early 2016 and 2017 saw weeks of heavy rainfall. Combating climate change is a huge challenge, especially since the cocoa tree is a demanding plant, and a good harvest calls for a whole range of requirements to be met. The soil must be moist, deep and rich in humus. Temperatures during the middle of the year should be around 25 degrees Celsius, and should not fall below 20 degrees at night. Scenarios predicting the impact of climate change in Ghana indicate that some regions that are strongly shaped by cocoa cultivation today will by 2050 be less suitable or unsuitable for it due to increasing drought SUSTAINABILITY REPORT 38

18 Purchasing Environment An employee of the ACOPAGRO cooperative in Peru prepares seedlings for the reforestation project. An integrated approach The continuing deforestation of tropical forests and the trend towards monoculture are also putting cocoa farming under pressure. They are leading to changes to the microclimate and water supply in growing areas, as well as to biodiversity, which stabilizes ecosystems. Monoculture is a consequence of inadequate living conditions for farmers they believe it will improve harvests and income. In fact, monoculture destroys the soil s fertility in the medium to long term, and increases the susceptibility of the sensitive cocoa trees to disease. Farmers struggle to afford the necessary pesticides and fertilizers. Chocolats Halba is pursuing a new, integrated approach to tackle environmental problems: agroforestry, which is a combination of farming and forestry. Halba was the first company world-wide to launch such projects in the cocoa-growing countries of Honduras, Ecuador, Peru and Ghana. We are working with small farmers locally and training them to plant and cultivate mixed-crop plantations consisting of cocoa and other fruit trees as well as native timber trees SUSTAINABILITY REPORT 39

19 Purchasing Environment Great potential The benefits of agroforestry are impressive. Mixed cultivation leads to improved biodiversity and soil fertility. This makes the cocoa trees more resistant to climate fluctuations and diseases. The risk of reduced crop yields is lessened, while at the same time income opportunities multiply. Thanks to higher cocoa yields in the long term and also the additional sale of timber and fruit, farmers are able to boost their income significantly. Halba has planted over 300,000 timber trees in its agroforestry projects since 2011, most of them in Honduras. New and existing projects are proving to be extremely promising. We therefore firmly believe that we will achieve our target of 500,000 trees in the medium term, thereby making a substantial contribution to the long-term climate stabilization. Cocoa growing in the shade of banana trees and timber trees SUSTAINABILITY REPORT 40