ALBA, ITALY — The Ferrero Group is on track to meet key sustainability goals, according to the company’s 14th annual sustainability report. The 94-page report, which was issued on June 21, underlines sustainability progress made during the 2021-22 financial year.
Some of these goals revolve around sourcing safe and healthy ingredients. Ferrero said it sourced approximately 230,000 tonnes of palm oil, which is close to 0.3% of the world’s total palm oil production (77 million tonnes), during the 2021-22 year. Ferrero also sourced 100% of Roundtable on Sustainable Palm Oil (RSPO) from a small number of reliable suppliers as segregated, meaning it’s kept separate from ordinary palm oil throughout the supply chain and thus allowing the company to trace its palm oil to the plantation level while working with suppliers to institute improvements and solutions. According to the report, the RSPO is 99.95% traceable to 146 palm oil mills and 722 plantations.
Ferrero said it has enrolled approximately 7,000 suppliers in its Supplier Code by 2022 and plans to cover its entire active supplier base, which is made up of approximately 21,500 suppliers, in the coming years. The company also said about 1,500 suppliers undergo a yearly risk-assessment process, which is described as the “base” for its supplier scoring, potentially for audits and consequence management. Between 2020 and 2022, Ferrero collected 1,000 supplier assurances, performed more than 1,000 supplier assessments and carried out approximately 100 field suppliers’ due-diligence audits, the report noted. The company also created a responsible sourcing committee, which has discussed close to 70 cases of supplier consequence management.
Traceability is another important goal for Ferrero. In 2022 and 2023, the company plans to extend its successful digital mapping initiative to wood and coffee supply chains, which started in 2020 for cocoa, palm oil and hazelnuts (among other key areas), as it begins instituting new European Union regulation on deforestation-free products. As far as cocoa traceability in the 2021-22 season goes, Ferrero reached complete traceability back to farmer groups, 96% back to farms with GPS locations and 89% polygon-mapped, the report said. According to Ferrero, polygon mapping “is achieved by trained specialists who walk around the cocoa farm noting GPS points through which they can identify the location of the farm precisely and measure its size.” The company has full traceability of palm oil to plantations, surveilling its full palm oil supply chain (3.2 million acres of land) for deforestation with Starling satellite technology, the report said. The company’s hazelnut traceability to farm gate was also 79% during the 2021-22 financial year.
As for other efforts to prevent deforestation during the 2021-22 financial year, Ferrero covered 1.2 million acres with deforestation risk assessments and restored almost 1,400 hectares of forest area, 17% of which are in protected forests. The company said agroforestry is connected to other goals such as seedling distribution, which is why it’s a primary Charter priority. According to the report, Ferrero has helped develop more than 346,000 acres of agroforestry, which involves 77,000 farmers, as well as 7.3 million cocoa seedlings and almost 5.6 million native and multi-purpose tree seedlings. According to the report, distributing fruitful and resilient cocoa seedlings can rejuvenate ageing cocoa fields, which is why the company distributed 1,740,000 cocoa seedings during the 2021-22 financial year. The company also supported 10,000 farmers with Payments for Environmental Services (PES).
Ferrero also made progress with its sustainability initiatives, according to the report. During the 2021-22 financial year, the company’s cross-commodity framework, Ferrero Farming Values (FFV), helped deliver one-to-one coaching to 32% of cocoa farmers on farm and business planning while 155,000 cocoa farmers participated in group training. Ferrero also completed its four-year Cocoa and Forest Initiative, fulfilling or surpassing most of the set goals, including more than 170,000 farmers being enlisted in the Ferrero Cocoa program, 161,000 (95%) of which were polygon mapped during the 2021-22 financial year, exceeding the company’s initial target of 153,000, the report said. Ferrero plans to publish a new CFI Action Plan in 2025.
“Across each of the four key pillars of our sustainability framework, the report shows we have made strong progress towards the objectives we have set ourselves,” said Lapo Civiletti, chief executive officer of the Ferrero Group. “Despite a challenging economic and geopolitical environment, the Group increased investments to continue to ensure high levels of quality, freshness and safety across all our products, while reducing our environmental impact.”
For access to the full report, click here.