ESG: The Insights You Need from Harvard Business Review

10 TONY’S CHOCOLONELY AND ITS PURPOSE-DRIVEN (AND PROFITABLE) SUPPLY CHAIN

by Frans Pannekoek, Thomas Breugem, and Luk N. Van Wassenhove

Supply chains for many commodity products—such as cocoa, cotton, and sugar—are highly fragmented. In the case of cocoa, most of which comes from West Africa, the raw product is produced by more than 2 million farmers who supply a complex network of middlemen. With an average farm size of three to five hectares and an estimated income of less than two dollars a day, nearly all of these farmers live below the poverty line. It is an environment rife with social and environmental abuse.

Players in the cocoa business—and industries like it—are aware of the negative impacts but find it hard to respond, especially ...