Sustainability Governance: Insights from a Cocoa Supply Chain

Abstract

The food industry is one of the main drivers of climate change, with serious impacts on the living and working conditions in developing countries. Due to these sustainability issues, consumers, governments, and non-governmental organizations are pressuring food companies to rethink their current business concepts of food production. Food companies rely on supply chain governance and its mechanisms to implement sustainability standards across all tiers of their supply chains. This study examines the sustainability governance at all stages of a cocoa supply chain, from the raw material production to the retailer, by using a qualitative case study approach. The results show a differentiation of the sustainability governance according to the different supply chain stages. At the raw material production stage, sustainability is mainly improved using contracts, extensive and frequent knowledge sharing, and audits. After the raw material production stage, environmental and social sustainability is almost exclusively coordinated by certificates, while other governance mechanisms are used to foster long-term economic business relationships. This study gives detailed insights into the application intentions and the functioning of sustainability governance mechanisms and provides propositions on how to efficiently improve sustainability in food supply chains.