Ferrero

No leading practices were identified for the company in the governance and strategy measurement area.

Scope 1 and 2 greenhouse gas emissions
Ferrero discloses a target to reduce its scope 1 and 2 GHG emissions by 2030 and reports progress against the target on an annual basis. By 2030, Ferrero aims to halve all emissions from its own operations (scope 1 and 2) and commits to reducing emissions by 43% for each tonne of product produced across all scopes (using 2018 as a baseline year). This target aligns with 1.5-degree pathway and has been approved by the Science Based Targets initiative (SBTi).

Plastic use and sustainable packaging
Ferrero discloses a target to make its packaging 100% reusable, recyclable or compostable by 2025 as part of its sustainable packaging strategy. The company also reports progress against this target on an annual basis.

No leading practices were identified for the company in the nutrition measurement area.

No leading practices were identified for the company in the social inclusion measurement area.

Sustainable development strategy
Ferrero discloses four broad themes for its sustainability strategy which have been informed by a materiality matrix which outlines the prioritized material topics the company has identified as most relevant to the business. The company discloses objectives which align with each theme. Most of the targets disclosed have some form of time-bound target for them and feed into the company’s sustainability strategy. However, this is not across all topics and do not cover all the areas under assessment within the benchmark, nor are the targets across the company’s entire value chain, presenting an opportunity for the company in future reporting.

Governance and accountability for sustainable development
The company’s reports its corporate governance structure which outlines that the sustainability and quality audit team, along with the chief operating officer, reports directly to the executive chair. Ferrero confirms that its executive chair is responsible for the implementation of the company’s sustainability strategy. However, it is not clear whether the company’s remuneration policy relating to the highest governance body is linked to corporate sustainability targets or goals, presenting an opportunity for the company going forward.

Stakeholder engagement
While Ferrero discloses the ten stakeholder groups it identified and engaged with when formulating its sustainability strategy, there remains an opportunity for the company to disclose how it integrates the outcomes of its stakeholder engagement activities into its wider sustainability strategy and provide an overview of how it identifies and engages with each group.

Protection of terrestrial natural ecosystems
Ferrero discloses time-bound targets for achieving deforestation and conversion-free (DCF) supply chains for some, but not all, of its high-risk commodities. This includes 100% targets for both cocoa and palm oil by 2020. However, no time-bound target was found for sourcing soya. While the company states that it is working with selected suppliers and the certification body ProTerra to achieve DCF supply chains for soya as well, the company has an opportunity to disclose a time-bound target for this high-risk commodity and disclose in the public domain the sourcing regions for all its commodities.

Soil health and agrobiodiversity
While Ferrero provides qualitative evidence to address soil health through its Hazelnut Charter programme, as well as through its participation in the Cocoa & Forests Initiative, the company can improve by strengthening its commitments and reporting on this topic. This could include setting targets to increase the percentage of production from sustainable practices that improve soil health and agrobiodiversity, reporting progress against targets and disclosing quantifiable data on its impact on soil health and agrobiodiversity.

Water use
While Ferrero discloses its water use, it does not demonstrate quantitative reductions in water withdrawals across its own operations, nor were time-bound targets found in the public domain.

Accessibility and affordability of healthy foods
Ferrero does not provide evidence of addressing food insecurity by improving accessibility and affordability of healthy foods for vulnerable groups. To improve in this area, the company should disclose an overall commitment to address food insecurity across its value chain as well as evidence of commercial activities designed to improve the accessibility and affordability of healthy foods for vulnerable groups.

Responsible marketing
Ferrero discloses a responsible advertising and marketing policy aligned with international codes and guidelines, including the International Chamber of Commerce’s Advertising and Marketing Communications Code, across all its media channels. However, the company does not disclose examples of marketing activities to promote healthy options, particularly targeting children and young people. Therefore, there remains an opportunity to provide examples in future reporting and for the company to report on the proportion of its marketing budget spent on promoting healthy foods.

Food safety
The company discloses a quality and food safety management system that adheres to national regulations, and all production sites are subject to internationally recognised quality certification by an accredited third-party certification body. The company reports that all its group production sites (100%) achieved FSSC 22000 certification in 2020. However, while mentioned, the company does not disclose the percentage of food suppliers certified to a food safety scheme recognised by the Global Food Safety Initiative (GFSI) or other widely accepted certification programmes.

Child labour
Ferrero prohibits child labour and requires that its suppliers adhere to the same standard by codifying it in a supplier code of conduct. However, the company does not disclose a policy requiring its suppliers to have an age-verification system in place. Moreover, there remains an opportunity for the company to provide an analysis of trends demonstrating progress towards addressing this topic over time.

Forced labour
Ferrero prohibits the use of forced labour in its own operations and supply chain, while also committing not to retain workers’ personal documents or restrict workers’ freedom of movement in its own operations. The company also requires that its suppliers adhere to the same standard by codifying it in a supplier code of conduct. While Ferrero discloses evidence of a toolkit for measuring and monitoring forced labour in its operations, this does not yet cover all its operations and supply chain.

Land rights
While the company recognises the issue, the company does not disclose a strong enough commitment to recognising and respecting the legitimate tenure rights related to the ownership and use of land of local communities.

Ferrero discloses policies, statements and commitments across all key topics relating to respect for human rights, primarily through its human rights policy statement that outlines and reports on the company’s approaches in this area. This includes evidence of a human rights due diligence process which includes the identification and assessment of salient human rights risks in the company’s operations and supply chain and a grievance mechanism accessible to both workers and external parties, as well as the processes involved when engaging with potentially affected stakeholders.

On most decent work issues, policies or commitments are in place. These include safe and healthy workplaces where workers have regulated working hours and can work free from discrimination as well as commitments around workforce diversity and gender equality. However, Ferrero lacks reporting on other key areas, including living wages for workers and collective bargaining fundamentals. Regarding living wages, improvements could include a time-bound target for paying all workers a living wage. In terms of collective bargaining, the company could disclose in greater detail how it works to support its supply chain partners in recognising freedom of association and collective bargaining.

Ferrero addresses most of the key issues for ethical business conduct through publicly available policies or statements. However, the company could increase disclosure on the implementation and monitoring of its approaches. Regarding bribery and corruption, this could include disclosing the processes involved in identifying bribery and corruption risks and impacts in specific locations or activities covering the company’s own operations. Regarding data protection, Ferrero could extend its policy to other areas of the company’s interface beyond its website. Moreover, Ferrero discloses little information on taxes, and no global tax strategy was found in the public domain.