Mr. Hug, why is sustainability important to you?
For me personally, it’s important because I’d like to leave my children and grandchildren with a world whose fabric remains intact – from an environmental, social, and economic perspective. These three aspects are closely interlinked in business terms, inasmuch as a company’s financial success is at risk if no attention is paid to social or environmental sustainability. This is why sustainability is so important to me as CFO of the Lindt & Sprüngli Group. Our sustainability strategy covers the material issues associated with these three aspects and gives them some structure along the value chain – covering the three areas of sourcing, production, and consumption.
Within these three areas of sourcing, production, and consumption: are there individual aspects you feel are of central importance to Lindt & Sprüngli’s sustainability approach?
Basically, all the issues we have considered in our sustainability strategy are very important, and we are keen to improve continuously across all these areas. Two issues of particular importance I would like to pick out are climate change, including its impact on producers of our agricultural commodities, and the sustainability of our raw ingredients, particularly cocoa beans. This is why we have developed our own procurement system with the Lindt & Sprüngli Farming Program, which we have now implemented in five countries.
Why is the Farming Program the right approach for Lindt & Sprüngli and what makes the program successful?
As a premium chocolate manufacturer, we direct our sustainability efforts towards both the entire supply chain for cocoa and the demand for cocoa for all the products made by the Lindt & Sprüngli Group. By 2020, our entire cocoa bean supply chain should be fully traceable and verified by external parties, so this applies to all regions of origin. The way we can achieve this is through our Lindt & Sprüngli Farming Program. This gives us control over every step of the production chain and allows us to integrate our own systems and processes in terms of sustainability. It also means we are responsible for everything we do, rather than delegating responsibility to others. We mainly focus our efforts on farmers and their families, on employees, and on the communities concerned. This helps us ensure that investments really do reach farmers and their communities, and we have direct control of where the money goes and what it is used for. Long-term and stable partnerships with suppliers are a central factor in the success of our premium products.
In spite of your best efforts, the progress being made is considered as too slow by certain NGOs and consumer protection organizations. How does Lindt & Sprüngli react to this kind of criticism?
We value constructive criticism, whether from NGOs, analysts, investors, or consumers. We take all feedback seriously, analyze it, and implement any measures required. We feel this is part of a first-class quality assurance policy that befits a manufacturer of premium chocolate.
What are the goals in terms of production and consumption and what have you achieved in these areas?
In terms of sustainable production, Lindt & Sprüngli has set itself a goal of reducing energy and water consumption and also CO2 emissions by an average of 2% a year. These are not absolute objectives, but apply to each ton produced. It’s all about becoming more efficient. By 2017 we have archieved our goals across the whole Lindt & Sprüngli Group. Compared to 2015, we have reduced energy consumption by a total of 6%. The same goes for water consumption with a reduction of 10%. The decrease in CO2 emission was 7%. Another area which has top priority at Lindt & Sprüngli is workplace safety. We have a vision of eliminating all accidents resulting in time off work. And while 2017 we took further actions in this area, we have yet to achieve our vision. In terms of consumption, we are working on various issues. We are always looking to improve the way we communicate with our consumers. This is why we launched the new microsite on the Lindt & Sprüngli Farming Program during 2017. We will further develop this interactive and consumer-friendly site during 2018 with a view to informing relevant stakeholders about the progress we have made with the Lindt & Sprüngli Farming Program.
So what happens now? What is the next sustainability milestone for you?
We focus firmly on sourcing and are well on the way to achieving our goal, by 2020, of ensuring 100% of cocoa beans are traceable and verified. Having said that, we need to make sure we stick firmly to the path we have chosen. Based on our successful pilot projects, we aim to increase the cocoa butter volume with beans from sustainability programs to 20% in 2018. There are also plans to source 100% of whole unprocessed hazelnuts, which we purchase in Turkey, from sustainability programs by 2020. This will see us achieve further important milestones in the sustainable procurement of raw materials. We also, however, want to make progress with resource efficiency. So it looks like our priorities for the coming years are pretty clear. At the same time, the dialogue we maintain with our stakeholders will help to identify additional issues which could become important in the future.