Nestle invests $45 million a year in cocoa sustainability

Nestlé (NESN.S) is spending 45 million Swiss francs (£35.17 million) a year on efforts to source cocoa sustainably, the food company said, also citing progress in reducing child labour in its West African supply chain.

The company, which has spent about 220 million francs over the past ten years on efforts to tackle child labour and deforestation in cocoa, said it aimed to have 100 percent sustainable cocoa sourcing in its confectionary products by 2025.

Nestle's child labour monitoring and remediation system (CLMRS), a part of its sustainably sourcing scheme, currently covers just 57 percent of the cocoa it sources in West Africa, where child labour is prevalent.

Coverage under the CLMRS does not mean the elimination of child labour, but means that the issue is being addressed or remedied.

"We are proud Nestle has made this commitment but (its) a daunting challenge to go from 15 percent (industry-wide monitoring scheme coverage in the Ivory Coast) to 100 percent in five years," said Nick Weatherill, executive director of the International Cocoa Initiative (ICI), an organisation working with governments and industry to eliminate child labour. 

"We won't solve (child labour) just by putting in place a due diligence system. Farmer poverty, access to education and many other issues need to (be addressed). We need governments on board," he said.

Chocolate makers like Nestle, Mars Wrigley, Mondelez (MDLZ.O), Barry Callebaut (BARN.S) and Hershey's (HSY.N) are all ramping up their sustainability schemes in a bid to meet consumer demands for ethically sourced products.

But the schemes, which certify cocoa ingredients as ethically sourced, have so far had little success in tackling the widespread child labour and deforestation in West Africa that has become a blight on chocolate's image worldwide.

According to the Cocoa Barometer, a major report published in 2018 by international civil society groups, there were about 2.1 million children working in the West African cocoa sector, a slight increase from levels seen 5 years ago.

Nestle said its latest report shows progress was possible.

In 2018, the company found 18,000 out of the 78,580 children it monitored in West Africa were engaged in child labour, but managed to reduce this number by 55 percent over the course of the year.

Nestle currently sources 68 percent of the cocoa in its confectionary products from sustainable sources, while just under half the cocoa it uses in all its cocoa-based products comes from sustainable sources.