Corporate Governance is essential trust of consumers, customers, communities, regulators, suppliers and employees is something Kraft does not take for granted. This is important to the ethical stance of Kraft’s and any other business because without one of the areas mentioned the business would not be able to run smoothly and to its full capability, leading to a bad reputation and negative consumer view. They strive to earn that trust every day by doing what they say they we will do and holding themselves accountable, even on the occasions when they fall short. And, as a public company, Kraft has the added responsibility to be open and responsive to approximately 80,000 shareholders worldwide. Living up to these expectations and obligations is not always easy. It requires detailed planning and hard work. That’s why they have structures and policies to help promote the ethical and efficient governance of the company. They also have internal and external auditors to monitor the compliance with those policies and procedures. Of all Kraft’s assets, the public’s trust is the one they value most. The governance policies, Code of Conduct and expectations of suppliers are all parts of the daily effort to preserve trust. Like any company, they sometimes fall short ‘With coffee supplies falling, consumers can expect to pay more for that morning cup of Joe’ () This statement is one of the negative effects that a supplier can have on the final outcome of the product produced, in this instant it is because their crops are becoming more and more scarce. But the standards, policies and systems make it clear to anyone who works for the company or uses their business. They’re working to create a more ‘delicious world’. In May 2003 Kraft Foods, saw one of its most popular products under attack. A lawsuit filed against the company claimed that its Oreo cookies contained Tran’s fatty acids. The lawsuit alleged that Kraft Foods used ‘hydrogenated vegetable oil’ in these cookies, which was detrimental to the health of consumers in the long run. The lawsuit demanded a ban on the marketing and selling of Oreo cookies to children in California. The lawyer, who filed the lawsuit in the general public's interest, also claimed that Kraft Foods did not even list the amount of Trans fatty acids present in Oreo cookies on its pack. However, Kraft Foods had already been in contact over there rights to what they need to include on the packaging, and no such ruling had been passed. This shows that Kraft are constantly making sure that they are not breaking the law within any aspect of their brands and it is a good example of Kraft being very productive and quick to act on any allegations put up against them. This leads to a good reputation in the business even though the ingredients is now banned from such products.
Kraft Foods sustainability starts at the farms, sustainability is a large business such as Kraft is very important because the amount of products they are producing using all different ingredients they want the ingredients to have easy accessibility for years to come.. Sustainable agriculture promotes the long-term sustainability of crops, the preservation of fertile soil, the economic wellbeing of farmers and the health of ecosystems they are using to create products. As one of the world’s largest purchasers of cocoa, coffee and other commodities, Kraft can influence the future of those crops and the communities that grow them. Kraft are partnering with other companies and governments around the world to increase the support of sustainable farming. The crops we buy often tell a story of family farming. Whether it’s coffee, cocoa or many of the other crops they buy, a large portion of them come from developing countries. A variety of circumstances, such as political unrest, poor soil conditions, lack of infrastructure and more contribute to the challenges faced by farmers. Smarter farming can lead to healthier farm communities and better quality crops for an even better final product. Buying certified commodities is a powerful means of promoting sustainable farming, supporting farmers and enabling consumers to make correct choices. ‘Kraft’s goal is to increase sustainable sourcing of agricultural commodities by 25% by 2015.’
They’re working to help bring more products to the market that has sustainably grown ingredients.
‘Kraft has been seen to oppose the fair trade movement, the 'market will find its own solution because countries and producers will be driven out of the market. Our role is on the demand side – our role as Kraft is to increase consumption'.’ ()
Kraft’s have taken a comprehensive approach to packaging that cuts waste, conserves natural resources and gives users a more satisfying experience.
‘Between 2005 and 2010, we cut nearly 100,000 metric tons (200 million pounds) of packaging from our supply chain. We’re working to eliminate another 50,000 metric tons (100 million pounds) by 2015.’ Key to Kraft’s reduction in packaging is their ‘Packaging Eco-Calculator’. It’s a tool they invented to help their packaging developers create more efficient, sustainable solutions based on data from the U.S. Environmental Protection Agency. ‘The Eco-Calculator figures the percentage of post-consumer recycled material in a given package design, along with the amount of energy and carbon dioxide emissions required to create the package. The Eco-Calculator also tells packaging designers how efficiently they’re using materials and how well their designs will fit our products’ physical dimensions.’ The tool is used along with other business practices, like economic assessments and ability to manufacture, in deciding a final design. ‘Sustainable Packaging Design, Sourcing and Partnerships Remove Weight Equivalent of More Than 150 Fully Loaded Jumbo Jets from Supply Chain’ this quote shows how creating the Eco-Calculator has helping the business hugely and made them more environmentally friendly. ‘Packaging is one of the first and last experiences consumers have with a food and beverages products.’ This is a great step forward and Kraft are not going to stop here, they are planning to lose more and more packaging each year as their researchers are looking for more environmentally friendly wrappers and materials to use. Along with their Eco-calculator they are expecting drastic changes and expect other large companies to follow.
A growing population is making more demands on the planet’s water supply than ever, so conservation is needed around the world. ‘We’ve reduced water consumption in our manufacturing facilities by 30 % since 2005. With a goal to reduce water use an additional 15 % by 2015, we’re reusing it, improving processes, maintaining equipment and educating employees.’ They’re working with global experts to estimate the amount of water used in their factories. ‘Kraft Foods to pay $8.1 million to settle lawsuit over groundwater contamination INDIANAPOLIS — Kraft Foods has agreed to pay $8.1 million to settle a class-action lawsuit over groundwater contamination at a former factory in Attica, Ind., The associated press reported. The lawsuit, which represents 130 families, claimed pollution from a former Kraft factory contaminated the groundwater beneath their homes, the article stated. In addition to the $8.1 million payment, Kraft was ordered to clean up the plant site and install mitigation systems in the affected homes, according to the story.’ This is an article which was published in tabloids and newspapers worldwide, this brought a huge amount of pressure to Kraft foods this kind of negative publicity can lose a company a huge customer base. This is a very negative and bad bit of publicity which Kraft Foods had to cope with, they should have made sure that all the correct actions had been taken before letting the case go to court which leads to poor reputation from consumers and surrounding areas. However, Kraft made sure they did everything to put it right and communicate appropriately with all parties involved.
“Every day, our success depends upon 127,000 capable, dedicated and diverse Kraft Foods employees around the world. Treating them well and providing them with a workplace that is safe is the right thing to do and essential for our long-term success. And that's how we're creating a performance-driven, values-led organization.”
Kraft Foods prohibits the use of forced labour in any of their operations, i.e., any work or service that a worker performs, including under threat of physical harm or other consequences. Kraft Foods are 100% against child labour the unlawful employment or exploitation of children in their workplace. Wherever the factory or place of work is Kraft comply with all minimum age regulations. All temporary workers used by Kraft Foods and all third-party contractors who may work on Kraft Foods premises are required to meet these minimum-age requirements. They prize a diverse and inclusive workplace and aim to promote cultural and individual differences around the world. ‘Kraft Foods does not discriminate in any of the following characteristics: race, colour, religion, gender, age, ethnicity or national origin, veteran status, disability, sexual orientation or preference, gender identity, marital status, citizenship status, genetic information, or any legally protected personal characteristic or status.’ With Kraft’s having such a strong guideline on their human rights it is essential that all brands and businesses whom deal with Kraft’s comply with all of their ruling so that they can’t be brought into distribute. This is a subject where many large companies have had bad publicity over. Such as Nike who were employing minors and making them work in unsuitable conditions, this made the global news and many people who used to shop with Nike have turned to their competitors instead. Kraft have always been known as great employers and a very reliable business who follow all human right movements and do not discriminate in any section of their work.
‘Kraft announced in a February 29 2011 regulatory filling that the Securities and Exchange Commission (SEC) is investigating the food and beverage company for possible violations of the Foreign Corrupt Practices Act (FCPA), which bars companies from paying bribes to foreign officials to keep or obtain business. According to the filing, Kraft received the subpoena on February 1 seeking information about a facility in India that Kraft obtained in its acquisition of Cadbury PLC in 2010.
Specifically, the subpoena has “primarily” requested information about “dealings with Indian governmental agencies and officials to obtain approvals related to the operation of that facility,” Kraft said. Kraft says it is cooperating with the U.S. government.’ () In a large business such as Kraft Foods it is essential they are very careful of how they process dealings and work with other businesses, employees and suppliers because one little slip up and they can be in the lime light for the wrong reasons with very serious outcomes leading to lawsuits and cases where it can lead to the closure of a brand or business area. If a business is corrupt or involves bribery in their work it also puts out a very negative public image for customers and consumers which will lead directly to falling sales.
Kraft selects suppliers (including consultants and other service providers) around the world based on whether their ethical standards align with their own. Kraft’s guiding principle is that they will not expect more from their suppliers than they expect of themselves. They created a summary of corporate social responsibility expectations in three statements. Kraft then communicate with the other party and they work together to create what they consider to be a simpler approach for everyone involved.
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