How Ferrero ‘walks the talk’ on responsible sourcing

“Walking the talk” when it comes to implementing responsible sourcing practices in your supply chain is critical to success, a conference was told. 

Marco Gonçalves, chief procurement and hazelnut company officer at Ferrero, told the CIPS Global Conference that responsible sourcing is a “fundamental part” of the way the firm does business. 

The confectioner uses a range of commodities in its products including palm oil, sugar and cocoa while roughly 70% of the products it makes uses hazelnuts in some shape or form, Gonçalves explained.

Earlier this year, Ferrero published its Hazelnut Charter as part of efforts to tackle challenges within the hazelnut supply chain such child labour. 

Gonçalves said while supplier codes of conduct were meaningful, suppliers must also know that firms are serious about these commitments. 

He said: “You can write the supplier code that you want, but if the suppliers don't really feel that you mean it, and that you walk the talk, you're not going to have an impact. However, if you have a supplier code and they feel that you mean it and you're working against that, then the continuous improvement journey goes in the right direction.

“If we identify suppliers that are not adhering to the values and the way we work and they're not delivering against the commitments that we have made together, then you have to take action.”

Gonçalves said it was rare but there had been examples of suppliers not adhering to Ferrero’s standards.

“You have to take real action in terms of discontinuing the commercial relationship because then the supplier will see that we walk the talk. We have to be firm, but the starting point is always one of continuous improvement.”

Implementing high standards of responsible sourcing is becoming more and more critical as both consumer expectations and legislation evolve, he added.

“Consumers are expecting that companies take care of their value chains. This is a given for them. They don't even ask because they assume that whatever they are eating is produced in the right social, sustainable, environmental way, and that the companies know where it comes from,” he said. 

“There are discussions taking place in Brussels about supply chain due diligence legislation, and Ferrero are absolutely supportive of that discussion. Companies that can oversee their supply chain can take real action,” he said.

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