Nestlé announced a new plan to tackle child labor risks in cocoa production. At the center is an innovative income accelerator program, which aims to improve the livelihoods of cocoa-farming families, while also advancing regenerative agriculture practices and gender equality. A cash incentive will be paid directly to cocoa-farming households for certain activities such as enrollment of children in school and pruning among several others. Nestlé’s new plan also supports the company’s work to transform its global sourcing of cocoa to achieve full traceability and segregation for its cocoa products. As Nestlé continues to expand its cocoa sustainability efforts, the company plans to invest a total of CHF 1.3 billion by 2030, more than tripling its current annual investment.

The income accelerator program offers a novel approach to help support farmers and their families in their transition to more sustainable cocoa farming. The incentives will encourage behaviors and agricultural practices that are designed to steadily build social and economic resilience over time. With Nestlé’s new approach, cocoa-farming families will now be rewarded not only for the quantity and quality of cocoa beans they produce but also for the benefits they provide to the environment and local communities. These incentives are on top of the premium introduced by the governments of Côte d’Ivoire and Ghana that Nestlé pays and the premiums Nestlé offers for certified cocoa. This cocoa is independently audited against the Rainforest Alliance Sustainable Agriculture Standard, promoting the social, economic and environmental well-being of farmers and local communities.

Cocoa-farming communities face immense challenges, including widespread rural poverty, increasing climate risks and a lack of access to financial services and basic infrastructure like water, health care and education. These complex factors contribute to the risk of child labor on family farms. Together with partners, including governments, and building on a promising pilot program, Nestlé’s new initiative sharpens focus on these root causes of child labor.

“Our goal is to have an additional tangible, positive impact on a growing number of cocoa-farming families, especially in areas where poverty is widespread and resources are scarce, and to help close the living income gap they face over time,” said Mark Schneider, Nestlé CEO. “Building on our longstanding efforts to source cocoa sustainably, we will continue to help children go to school, empower women, improve farming methods and facilitate financial resources. We believe that, together with governments, NGOs and others in the cocoa industry, we can help improve the lives of cocoa-farming families and give children the chance to learn and grow in the safe and healthy environment they deserve.”

Creating cash incentives to grow income substantially

The program rewards practices that increase crop productivity and help secure additional sources of income, which aim to close the gap to living income and help protect children. By engaging in these practices, families can additionally earn up to CHF 500 annually for the first two years of the program. The higher incentive at the start will help accelerate the implementation of good agricultural practices to build future impact. This incentive will then be leveled at CHF 250 thereafter as the program starts delivering tangible results. It is not paid based on the volume of cocoa sold and is inclusive to provide smaller farmers meaningful support, leaving no one behind. In a departure from normal practice, the program also offers financial incentives for the farmer’s spouse, who is typically responsible for household expenses and childcare. By dividing the payments between the farmer and the spouse, the program helps empower women and improve gender equality. Examples of practices that Nestlé is incentivizing include:

• School enrollment for all children in the household ages 6-16;
• Implementing good agricultural practices, such as pruning, which increase crop productivity;
• Performing agroforestry activities to increase climate resilience, like planting shade trees;
• Generating diversified incomes, for example through growing other crops, raising livestock such as chickens, beekeeping or processing other products like cassava.

Payments will be delivered via a secure mobile service transfer that will ensure traceability directly from Nestlé suppliers to the intended recipient. Because cash flow throughout the year is often a challenge, cash incentives will be distributed when they are needed most. Based on feedback from farmers, this includes the back-to-school period and before the rainy season. Third parties, including International Cocoa Initiative and Rainforest Alliance, will work with Nestlé to monitor participation.

Helping farmers implement sustainable, scalable practices

Building on the positive results of an initial pilot in 2020 with 1,000 farmers in Côte d’Ivoire, in 2022 Nestlé will expand the program to include 10,000 families in the country, before extending it to Ghana in 2024. It will then assess the results of that test phase and adapt where necessary, before moving to reach all cocoa-farming families in its global cocoa supply chain by 2030.

Nestlé will help ensure farmers have the resources, training and social and financial structures to make lasting changes by:

• Enhancing the existing monitoring and remediation system to help identify, prevent and address child labor risk and increase school enrollment;
• Offering families training through the Gender Action Learning Systemand on household financial planning and entrepreneurship;
• Organizing and training local groups to perform pruning and other beneficial agricultural tasks within a given cooperative each year;
• Providing income diversification opportunities for farmers and their spouses;
• Helping set up Village Savings and Loans Associations (VSLA), focused on women, to encourage savings and provide loans for small business opportunities.

Feedback and input from farmers and farmer cooperatives, as well as ongoing data collection and evaluation by third parties, will be used to inform, modify and improve the program as it scales up to more communities. In addition, independent oversight will be provided by a multistakeholder strategic advisory committee managed by IDH-The Sustainable Trade Initiative, a leading foundation that works to improve the sustainability of international supply chains.

Tracing all cocoa from origin to factory

As part of the program, Nestlé will transform the global sourcing of cocoa to achieve full traceability and segregation of its cocoa products from origin to factory. This new effort will help transform the supply chain of Nestlé and the broader industry. Nestlé will introduce a range of products with cocoa sourced from this innovative program, offering consumers the opportunity to support the improvement of the families’ livelihoods and the protection of children. This will start with a selection of KitKat products in 2023.

“Our actions can help catalyze change on an important topic that is so close to our hearts. They will drive accountability and transparency across the industry, at a time when customers, employees and communities increasingly expect companies to deliver on their shared values,” said Magdi Batato, Executive Vice President and Head of Operations. “By increasing traceability at scale, we will help build consumer trust in our products and respond to the growing demand for responsibly and sustainably sourced cocoa.”

Today’s announcement builds on Nestle’s longstanding efforts to tackle child labor risks in cocoa production. The company has invested in sustainability through the Nestlé Cocoa Plan since 2009. Through a robust monitoring and remediation system instituted since 2012, 149,443 children have been assisted to protect them against the risk of child labor, and 53 schools have been built or refurbished. This system is now the industry standard by which companies monitor their supply chains.

Our newest member is Saint-Gobain Hungary Kft. founded in 1990,  represented by Piros Attila, with HUF around 26 million sales revenue with 281 employees for 2019. The main activity of the company is the mining and manufacturing of construction products.

Their integrated policy provides a framework for formulating and evaluating their goals, which contributes to the continuous improvement of environmental and energy performance.Their climate protection commitments cover energy use, CO2 emissions, waste management, water management, raw material use and packaging. In the course of their activities and processes, Saint-Gobain Hungary Kft. ensure the protection of the environment, the prevention of environmental pollution, the energy-saving and efficient use of resources, and the reduction of their energy demand. Saint-Gobain Hungary Kft. contributes to the creation of healthy homes, as well as ensuring well-being at work for employees,  and also contributes to  eliminating inequalities in the society through their foundations. The company’s internal green working group will start operating in 2022, with the aim of transforming attitudes, exchanging knowledge and thinking together in all areas of sustainability. Furthermore, the company has introduced energy management performance indicators appropriate to the nature of the organization, which are reviewed regularly. In addition to several international initiatives, Saint-Gobain Hungary Kft. has been a part of the UN Global Compact since 2003 and in 2021 joined the Women Empowerment Principles initiative.

The aim of their membership is to develop joint professional work and active dialogue, enabling them to be among the first to be informed about current issues related to sustainability in Hungary.

The specific situation triggered by the pandemic requires flexibility, endless monitoring and immediate actions from employers. At Shell Hungary, we stand for our colleagues as one of the most important assets of our company, generating long-term, solid business success. Our corporate decision-making process is driven by this approach. Our employees can perform at their best if they are satisfied not only with their financial rewards but also with other aspects of their professional and private life.

Recognizing our efforts, we have been granted the “Lovable Workplace 2021” and the “Family Friendly Workplace” awards this year. We are proud of these awards, as it provides an important feedback for us on the real strength of our community, that we have been able to show to the world.

Caring corporate attitude has become even more important during the pandemic. We have extended our pre-pandemic home office program to facilitate work-life balance, enabling our staff to work in flexible hours. We provided tools and fiscal support to assist ergonomic working environment at home, and gave children laptops to support their remote learning.

Our aim is to become one of the most diverse and inclusive organizations. Our shared values as well as our mutual respect for each other created a real, cohesive and supportive workplace community, and we are committed to preserve it. The enthusiastic team of our staff and our Brand Ambassadors are the driving force behind our community. They actively engage staff through professional events, leisure activities and charity campaigns. From light-hearted conversations to events based on the healing power of laughter, everyone can find the best virtual or face-to-face meeting of their own.

Shell Hungary provides opportunity for improvement and professionsl development even during the pandemic. Migrating our thematic events into virtual platforms we have been able to maintain our training sessions targeting the professional development of our colleagues.

When it comes to shaping the frameworks of our future working culture we routinely address our colleagues by surveys. Flexibility, hybrid working mix as well as family-friendly approaches all remain dominant in our upcoming employment policies.

Our newest member is Eximbank Zrt. founded in 1994. Eximbank is operating within an integrated framework with the Hungarian Export Credit Insurance Plc under the name of EXIM Hungary. EXIM Hungary is the official export credit agency of Hungary, the only domestic bank and insurer specifically focusing on international trade, foreign market expansion and investments. EXIM Hungary provides a stable financial background for Hungarian export companies, their suppliers and enterprises planning to export with foreign trade-related credit services and risk-insurance products of the highest international standard that promote the expansion and success of their activities.

As part of their environmental responsibility, they have established the EXIM Green Financing Program, which aims to develop financing, risk-sharing and insurance solutions for the institution’s direct customers and financial partners that support the sustainable development investments and business activities of exporters and suppliers. EXIM’s current business activity, based on possible development directions and regulations, focuses on the following areas of sustainability; use of renewable energy sources in production, energy efficiency investments, sustainable agriculture, water management, hydropower utilization, wastewater treatment, recycling, reuse, waste management in production processes (circular economy). EXIM’s environmental policy does not support a transaction that has a negative, i.e. adverse, environmental impact as required by international standards and regulations, and that demonstrates a violation of fundamental human rights standards or significant greenhouse gas emissions. Minimizing environmental awareness and their ecological footprint has become an integral part of their operations. EXIM has set the following environmental and sustainable development goals; social responsibility, expression of responsibility, integration of sustainable development, fight against climate change, protection of environmental values.a

The main purpose of their membership is to support green activities, cooperation between institutions, and to share good practices and experiences.