As America’s corporate leaders others sound the alarm on climate change, including Amazon (AMZN) CEO Jeff Bezos, who’s pledged $10 billion to tackle the issue, chocolate manufacturers will continue having to answer for pervasive deforestation caused by cocoa growers.
In a new interview with Yahoo Finance, Mars Inc. CEO Grant Reid said he was “very concerned” about deforestation tied to cocoa farming — which contributes to climate change — and that he’s collaborating with a coalition of companies working to address that specific problem.
“You’re seeing more CEOs stepping up and actually leaning in and taking action,” Reid told Yahoo Finance’s Editor-in-Chief Andy Serwer in a Feb. 19 interview. Later, he added, “But it’s a coalition. It can’t be done by me. It can’t be done by any one company.”
The issue of deforestation and climate change came up during the World Economic Forum in Davos, Switzerland last month, in a paper presented by Olam Cocoa CEO Gerard Manley. In that paper, Manley cited World Bank Data showing that between 1990 and 2016, an area larger than South Africa was lost to deforestation.
“How did we get to the point of destroying our lungs to feed ourselves?” Manley wrote. “Agriculture has played a significant role in the rate of deforestation, as trees have been cleared to make way for livestock and food crops.”
The problem in the cocoa industry is particularly dire because so much of it relies on family farms that, driven by poverty, plant in forests to take advantage of the rich soil and shade, according to Manley. The Olam Cocoa CEO suggested several methods to curb deforestation, including coaching farmers to help them reap the most from the land that’s already in their possession.
The Mars Inc. CEO, meanwhile, said he belongs to the Consumer Goods Forum and leads the deforestation efforts with the French retailer Carrefour. That Forum notes that deforestation accounts for 20% of greenhouse gas emissions, listing several commodities driving it — soy, palm oil, paper, pulp, and cattle. Reid noted that at one point Mars relied on 1,500 suppliers for its own palm oil.
“Well, that's changing dramatically. We've actually [been in] the process of cutting down the number of suppliers from about 1,500 down to more, like, 100, so that we can see where the palm oil is coming from. We know which farms it's coming from [because of] GPS tracking — whether it's coming from any level of deforestation, which is unacceptable to us,” Reid said.
Reid made the remarks during a conversation that aired in an episode of Yahoo Finance’s “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.
Mars has faced a long road in trying to combat deforestation. Back in 2009, the company said it would switch to sustainable cocoa by 2020; however, in 2018, Mars created a new plan requiring its cocoa to be responsibly sourced by 2025. And in October 2019, the Washington Post’s Steve Mufson reported that deforestation in West Africa — where two-thirds of the world’s cocoa comes from — has just gotten worse since Mars made its original pledge a decade ago.
Reid has served as CEO of Mars Inc. since 2014, just three years after the family-owned seller of candy, pet food, and other items marked 100 years in business. He has worked at Mars Inc. since 1988, when he became the director of marketing and sales at Mars Electrics. He was born and raised in Scotland.
Mars Inc., a privately held company founded in 1911, makes annual revenue of nearly $40 billion and employs about 125,000 people around the world. As of 2019, Mars Inc. ranked as the sixth-largest privately held company in the U.S., according to Forbes.
Additional reporting by Max Zahn.
Erin Fuchs is deputy managing editor at Yahoo Finance.