Among food products (not just packaged), it ranked third out of 402 companies, in line with the top percentile. Of more than 10k total companies, it still landed in the top 900.
“What amazing recognition of our investments into a sustainable chocolate supply chain, to be considered the leader among peers,” said Pablo Perversi, lead innovation, sustainability and quality officer at Barry Callebaut.
“Together with our customers, our products are driving change, making sustainable chocolate the norm.”
The chocolate supplier received negligible risk ratings for eight of the 11 environmental, social and corporate governance (ESG) issues, including resource use, carbon within its own operations, land use and biodiversity, as well as business ethics.
When it came to human capital and the environmental and sustainability impact of products and services, Barry Callebaut received a low risk rating – meaning the company could improve in those sectors. Its corporate governance and total risk exposure landed in the medium risk level.
This determinant stems primarily from the fact that cocoa is a volatile agricultural sector where deforestation, water and land use remains relevant – even paramount – to reputation. Child labor in particular, plays an outsized role, according to Sustainalytics.
“Reliance on a commodity exposed to systemic human rights issues creates risks that the company should manage to avoid potential reputational damage and lawsuits,” the report said.
Additionally, because its sales occur B2B, the company must meet other business and government standards of food quality, health and safety, which affected its score.
In terms of management, Barry Callebaut earned high marks, reaping 74 out of 100 points. The assessor considers any number above 50 ‘strong.’
Overall, the company earned a low risk level with 16 out of 100 points, ‘due to its medium exposure and strong management of material ESG issues.’ (Sustainalytics deems a risk level between 30 and 40 points high, and anything above 40 severe.)
The assessor added in its overview that this rating is somewhat skewed because the cocoa supplier ‘is materially exposed to more ESG issues than most companies in our universe.’ Barry Callebaut also benefited from its avoidance of ‘significant controversies.’
Above the pack
Barry Callebaut said analyses like this one ‘respond to a growing interest from investors and societal stakeholders to understand whether sustainability strategies are actually managing supply chain risks and delivering impact.’ The Sustainalytics score also affects the company’s interest rate.
Less than 20% of all 10,584 companies Sustainalytics considered garnered a low-risk rating. Only 5% of food products did, and Barry Callebaut was one of the only packaged foods companies to land there.
In that category, 10% earned a medium-risk level, 43% fell into high-risk and 47% severe. Those numbers are a bit higher than food products, of which about a third landed in the high and severe range.