Confectioner seeks 100% traceability of products

Ferrero Group, one of the world's leading chocolate and confectionery manufacturers, released its third corporate social responsibility report in Beijing - and its first in China.

The document covers three main areas - enhancing local communities, healthy lifestyles and sustainable agricultural practices.

The Italian confectioner develops social and cultural activities mainly through the Ferrero Foundation in more mature markets. This was established in 1983 under the name Opera Sociale. The foundation takes care of retired Ferrero employees by implementing comprehensive "active-ageing" programs.

In emerging countries, it operates through Ferrero Social Enterprises with the goal of enhancing development directly at the local level. So far the company has set up social enterprises in India, South Africa and Cameroon.

In terms of promoting a healthy lifestyle, Ferrero China has developed a series of campaigns and programs in the country. In 2008, it signed up as a partner with China's General Administration of Sport. In 2009, Ferrero China launched "Kinder Health Run" projects in primary schools across the nation. In 2012, it hosted the "Kinder Marathon" campaign as a mini-marathon for children and parents in Guangzhou.

"The first Chinese edition of Ferrero's corporate social responsibility report not only includes data and objectives but also introduces our best practices and experience in China," said Konnie Zhu, director of corporate affairs, Ferrero North Asia and China.

As a food enterprise, Ferrero attaches vital importance to its purchase of raw materials. It is committed to becoming 100 percent certified as traceable regarding sustainable cocoa, coffee, palm oil and hazelnuts before 2020. In order to act in line with this initiative, for example, the Italian company refuses to purchase palm oil from Indonesia because deforestation has spread widely across the country. Instead, it purchases the product from Malaysia and Papua New Guinea.

Currently, the number of Chinese food enterprises releasing CSR reports still remains rather small. Some believe Ferrero's act of releasing such a report could promote more Chinese counterparts to join the trend, said Yu Zhihong, executive director of the International Research Center for Social Responsibility and Sustainable Development at Peking University.

"In 2012, among the CSR reports-releasing enterprises in China, only 16 were food and beverage companies. Among them three were foreign companies," said Sun Xiaowen, deputy director of the Research Center for Corporate Social Responsibility at the Chinese Academy of Social Sciences.

A total of 1,708 CSR reports had been released by Chinese enterprises and non-enterprise organizations by the end of 2012, said Yu.

Releasing CSR reports has more significance for food and beverage companies than for other companies because it allows customers to know more about them, especially the quality of their products. The good impression they leave with customers finds its rewards when they shop in supermarkets, Sun said.

Yu added: "The sustainable supply chain management and transparency revealed by Ferrero's CSR report also serves as an inspiration to Chinese rivals, which is crucial to food enterprises."

Sun said most Chinese enterprises that release CSR reports are State-owned enterprises because it is required by government departments such as the State-owned Assets Supervision and Administration Commission of the State Council. For foreign companies, the release is largely voluntary.

"In recent years, Chinese private enterprises have achieved significant business development but there is still much room for improvement in CSR, as witnessed in the score achieved by Chinese private enterprises' development in CSR of just 15.2 out of 100 points last year," he added.

In spite of its achievements Ferrero has made in CSR in China, hurdles do exist for foreign companies to carry out their CSR programs in the country.

huangying@chinadaily.com.cn

(China Daily 02/18/2013 page22)