In 2019, we added coconut to our list of priority raw materials due to its prevalence in a range of our confectionery products. Our first job was to map the traceability of our supply chain, something that we continued throughout 2020. While we have made progress, most on-the-ground assessments had to be postponed until 2021 due to COVID-19 restrictions.
Our coconut supply chain
Our approach to sourcing coconut sustainably
We purchase coconut in several forms, including oil, milk and other related raw materials. While we source our coconut from several countries, the bulk is purchased from Asia (Sri Lanka, the Philippines and Indonesia) and South America (Brazil).
We are working with suppliers and farmers to seek ever-greater transparency in sourcing coconut and to deliver positive outcomes in farming areas. As a small buyer of coconut, we are focused on opportunities for industry collaboration on developing a common, consistent approach across buyers to deliver positive impact at scale and where it is the most needed. Our responsible sourcing approach for coconut will be further defined in 2021, building on the lessons learned from supply chain and issue mapping in 2019 and 2020.
Our responsible sourcing journey for coconut is at an early stage. Along with mapping our supply chain, we have mapped the key challenges across coconut origins and, through assessments, are obtaining more granular detail about how apparent they are in different locations. The key challenges identified are:
- Dispersed supply chains making traceability and farmer engagement challenging.
- Vulnerable livelihoods of smallholder landowners related to:
- Low yields and aging trees.
- Low incomes.
- Lack of access to basic services (sanitation, clean water, sanitation, schooling).
- Lack of information about markets.
- Climate change and extreme weather events.
- Low productivity caused by:
- Aging trees.
- Limited technical (good agricultural practices) and financial knowledge.
- Climate change and extreme weather events.
- Safety in working conditions.
These challenges vary from one growing region to another, reinforcing the need for location-specific approaches developed together with local partners.
Our goal is to ensure a continuous supply of coconut originating from responsible sources, where farmers, workers and communities are safe and resilient.
Collective action and engagement
We partner throughout our supply chain and with industry-wide coalitions. We are part of the Sustainable Coconut and Coconut Oil Roundtable, which is dedicated to replanting trees, fighting deforestation, improving livelihoods and enhancing traceability. In 2020, together with Barry Callebaut, Proforest and Earthworm Foundation, we developed a framework for conducting and reporting on sustainable coconut assessments. This provides a common approach for undertaking and reporting on assessments that evaluate sustainability issues in coconut oil production.
In November 2020, we signed the Sustainable Coconut Charter, which was established to set a global benchmark for sustainable coconut origins. The Charter is a voluntary framework for companies involved in the coconut supply chain and represents a collective commitment to making a difference for the planet, for people and for our business.
The Charter, shaped through wide consultation of companies, external experts, donors and relevant coconut stakeholders, has been in development since 2019. It defines the ambition and principles of coconut sustainability programs, aiming for the following impacts:
- Local livelihoods: We promote values and initiatives that increase smallholder farmers' income and subsequently their livelihoods, for example, by improving access to market, finance, technology, increased capacity, productivity and replanting.
- Traceability and transparency: We engage our stakeholders to enhance supply chain transparency and traceability through sustainable and efficient sourcing, processing, production and other related value chain strategies.
- Deforestation and climate change: We strive to prevent deforestation and mitigate climate change.
The Charter is designed to be inclusive and open. Companies will assess the ambition and principles according to their activities and adapt their implementation approach, including any validation and certification, based on their size and the scope of their activities. The Charter intends to encourage broad participation, driving improvement in these three key areas as part of our commitment to sustainability.