Principles in Action Summary 2010 Putting our Principles in Action to Make a Difference To People and Planet Through Our Performance © 2011 Mars, Incorporated and its Affiliates. All Rights Reserved. Mars, Incorporated Principles in Action Summary 2010 | Introduction Mars Introduction We have a passion for pets and produce some of the world’s leading pet food brands Mars, Incorporated. Chocolate and much more… When people think of Mars, most often they think of chocolate — and we do make some of the best-loved chocolate in the world. But we’re much more. We are a privately owned company with more than 65,000 Associates who are committed to delivering the best quality in pet care, making office breaks more refreshing with delicious teas and coffees, putting wholesome food on family tables and bringing smiles to millions around the world with our gum, confections, and of course, chocolate. Our business was built on the fundamental belief that, to endure, we must deliver mutual benefits for our business and all our stakeholders, including our Associates, retail customers, consumers, suppliers and communities. We are guided and governed in this effort by Mars’ Five Principles: Quality, Responsibility, Mutuality, Efficiency and Freedom. Our objective as a business is to put our Principles in action every day, to make a difference for people and the planet through our performance. This objective dates back to the philosophy of Forrest Mars, Sr. in the 1930s. As a privately owned company, we have traditionally communicated more about our brands than about ourselves as a business. But, today people want to know more about the businesses they choose to support. In this, our first major communication about how we put our Principles in Action, we share more about who we are and what we stand for. We explain our ambitions as a business committed to our Five Principles, and acknowledge where we are making progress and where we are still seeking the best ways forward. Thank you for taking the time to learn more about Mars. Please ask questions, tell us what you think on 001 9736913536 See a summary of how we performed. © 2011 Mars, Incorporated and its Affiliates. All Rights Reserved. SNICKERS ® , one of our many billiondollar brands, is produced all around the world, including in Waco, Texas, U.S. Mars, Incorporated Principles in Action Summary 2010 | Introduction | Letter from Paul S. Michaels Mars Letter from Paul S. Michaels To know Mars, Incorporated is to understand our heritage and The Five Principles that guide us every day What most people know about Mars is that we have a portfolio of brands that are loved by billions of consumers around the globe. What most people don’t know is that we are one of the world’s leading privately-owned corporations with more than 65,000 Associates, and that we touch millions more in the communities where we operate or source our ingredients. We have always been active in communicating about our products, but historically did not feel the need to say much about our company. Why change now? And, why this particular summary? Times have changed. It used to be that consistently delivering the highest quality and value in products and services was the most important thing a company needed to do to earn the trust of its stakeholders. Those expectations have in no way diminished, but today, there is also an expectation that companies demonstrate quality and values in everything they do to bring these products to market. Very reasonably, people want to know that they are choosing to support companies that meet their responsibilities to their Associates, consumers, customers, suppliers, communities and the environment. As president and CEO of Mars, I am proud that delivering against these responsibilities is at the very heart of who we are and has been for generations. To know Mars, Incorporated is to understand our heritage, and the Five Principles that guide us every day, are at the heart of how we operate, and have helped us become the successful global food business we are today. These Five Principles: Quality, Responsibility, Mutuality, Efficiency and Freedom, unite all of us at Mars across generations, geographies, languages and cultures. Our business purpose, first expressed by Forrest E. Mars, Sr. in the early 1930s, calls upon us to create mutual benefits for all of our stakeholders. This purpose, and the stewardship of the Mars Family, inspire us to put our Mars Principles in action in everything we do, and strive to make a difference to people and the planet through our performance. We do have a positive impact on the environment and the quality of life of many around the world, but we also have some challenges. lives of the millions of farmers that supply our raw materials. Some of these crops provide profitable livelihoods for growers. In others, like cocoa, there is the need to improve the prosperity of farmers – and ensure that these farming communities are reaping the benefits of supplying the global chocolate industry. We manage our environmental and social impacts by leveraging the best science possible to understand, chart and minimize the negatives, and maximize the positives – working with partners of all types: governmental, non-governmental, academic and corporate. Where Mars is a major global player in a given material – such as cocoa and rice – we can be leaders in progress toward sustainable, positive developments. Where we are less important consumers – as in grains and sugars – we are equally committed to playing our part through partnership with others better equipped to deliver positive change. Mars’ boldest environmental strategy is what we call Sustainable in a Generation: by 2040 our offices and plants will use no fossil fuels and emit no greenhouse gases, and we are developing similar long-term commitments for waste and water. In addition to an explanation of these targets, this summary describes how we are putting our Principles in action across our entire business, including our focus on our supply chain, health and nutrition of our products, and creating a workplace where all our Associates are free to demonstrate leadership, learn and grow. My thanks to all of the Mars Associates that bring our Principles to life every day and, in particular, to the Mars family that have enabled all of us to create a business of which we can be proud. My thanks also to the critical partners that have helped us move forward with our ambition to make a difference for people and the planet through our performance and who continue to work with us to tackle our on-going challenges and opportunities. We are on a journey as a company, and we are pleased to share with all our Associates and partners the roadmap we’re developing for the future and our progress to date. Our main environmental impacts occur in the fields, forests and oceans that supply the ingredients for our chocolate, confections, foods, pet foods and hot drinks. Our manufacturing also has an impact via carbon emissions, water use and waste generation. We are also focused on our social impacts through our products, and in our operating and sourcing communities. In addition to employing thousands in our manufacturing sites and contributing to the economic prosperity of our operating communities, we play an important role in the © 2011 Mars, Incorporated and its Affiliates. All Rights Reserved. Paul S. Michaels Mars, Incorporated Principles in Action Summary 2010 | Our Approach to Business | The Mars Five Principles Our Approach to Business The Mars Five Principles Efficiency We use resources to the full, waste nothing and do only what we can do best. Our strength lies in our efficiency, the ability to organize all our assets – physical, financial and human – for maximum productivity. In this way, our products and services are made and delivered with the highest quality, at the least possible cost, with the lowest consumption of resources; similarly, we seek to manage all our business operations with the most efficient processes for decision making. Freedom We need freedom to shape our future; we need profit to remain free. The Five Principles unite us across geographies, languages and cultures The Mars Five Principles of Quality, Responsibility, Mutuality, Efficiency and Freedom are the foundation of our culture and our approach to business. They unite us across generations, geographies, languages and cultures. Our Five Principles are synonymous with Mars and have been guiding Mars Associates throughout most of our company’s history. Every day we do our best to put our principles in action through our work and our relationships with our consumers, customers, business partners, communities and one another. Quality The consumer is our boss, quality is our work and value for money is our goal. Our company is dedicated to the highest quality in all the work we do. Quality is the uncompromising standard for our actions, and it flows from our passion and our pride in being part of the Mars community. Quality work, which results from our personal efforts, is the first ingredient of quality brands and the source of our reputation for high standards. Responsibility As individuals, we demand total responsibility from ourselves; as Associates, we support the responsibilities of others. We choose to be different from those corporations where many levels of management dilute personal responsibility. All Associates are asked to take direct responsibility for results, to exercise initiative and judgment and to make decisions as required. By recruiting ethical people well suited to their jobs and trusting them, we ask Associates to be accountable for their own high standards. Mutuality A mutual benefit is a shared benefit; a shared benefit will endure. We believe the standard by which our business relationships should be measured is the degree to which mutual benefits are created. These benefits can take many different forms, and need not be strictly financial in nature. Likewise, while we must try to achieve the most competitive terms, the actions of Mars should never be at the expense, economic or otherwise, of others with whom we work. © 2011 Mars, Incorporated and its Affiliates. All Rights Reserved. Mars is one of the world’s largest family-owned corporations. This family ownership is a deliberate choice. Many companies began as Mars did, but as they grew larger and required new sources of funds, they sold stocks or incurred restrictive debt to fuel their business. To extend their growth, they exchanged a portion of their freedom. We believe growth and prosperity can be achieved another way. Mars, Incorporated Principles in Action Summary 2010 | Our Approach to Business Mars Our Approach to Business The Five Principles on display at Mars Chocolate’s U.S. HQ in Hackettstown, New Jersey At Mars, we have a deep respect for the environment and communities in which we operate and acknowledge our considerable impacts on people and the planet. We rely on farmers and nature for many of our ingredients. We operate 132 factories worldwide, serve millions of consumers around the globe and employ more than 65,000 people across our diverse business segments. Being a privately owned company gives us the freedom to take a long-term view. We can make investments that demonstrate our responsibility not only to our owners, but to all the people and communities with whom we work. Our approach is focused on creating lasting, mutual benefits for our business and all those involved in its success. Open Workspaces Encourage Collaboration and Communication Open communication and collaboration among Associates of all levels is an important part of the way we do business. For eighty years, our buildings’ open floor plans have facilitated this way of working. Mars sites are open spaces with few enclosed rooms or individual offices — not even for our Chief Executive Officer Paul S. Michaels. There are no executive dining rooms or reserved parking spaces, or other divisive symbols of status at Mars. We are one team. We are a global company that acts locally. Our business segments are decentralized and, while many decisions are driven by needs in each market, we are always guided by our Five Principles of Quality, Responsibility, Mutuality, Efficiency and Freedom, which have shaped our culture and our business for decades. A company of our size and global scope affects people and the planet in many ways. We must identify the social and environmental impacts most significant (or “material”) to our business, and our stakeholders, and focus our efforts appropriately. We know that making principle-based decisions alone will not help us address these challenges. It is by working with others, including our customers, suppliers, governments, nongovernmental organizations, industry, academia and research centers that we can create a mutually successful future. We hope this website will start new conversations and create opportunities for additional successful collaborations. A typical Mars open-plan office © 2011 Mars, Incorporated and its Affiliates. All Rights Reserved. Mars, Incorporated Principles in Action Summary 2010 | Our Approach to Business What Sustainability Means to Mars Based on the foundation of our Five Principles, we seek to create lasting, mutual benefits for all those involved in our business success by creating positive social impacts, minimizing our environmental impacts and creating economic value. Without integrating all these aspects into our business, our company will not endure in the long term. We are working on strategies and targets for social and environmental impacts in all areas of our value chain and have already set long-term environmental goals for our factories and offices (which we call our “operations”), where we have direct control. We are committed to achieving zero fossil-fuel energy use and zero greenhouse-gas emissions by 2040, and are developing similar commitments for waste and water use. We have short-term targets to help us monitor our progress. Our Areas of Focus We focus on several key areas regarding our impacts on people and the planet. Our priorities are defined by what we see as our responsibilities, relevance to our partners and communities and our ability to create meaningful and lasting benefits. Wherever possible, we use science to define the challenge or opportunity and promote innovative thinking and solutions. Our focus areas are: Health and Nutrition: As a leading food business, we have a responsibility to help address challenges of health and nutrition. We tackle these challenges through a program of information, renovation and innovation backed by scientific evidence. This includes providing the information consumers need to make smart decisions about their caloric intake, renovating product formulas to reduce calories, sodium and partially hydrogenated vegetable oils, and innovation, including developing new products that are focused on more active, healthy lifestyles. Our Supply Chain: As a major user of agricultural products and other natural raw materials, we have a responsibility to ensure reliable supplies of our key ingredients in ways that improve the livelihoods of farming communities and limit impacts on natural resources. Our Operations: As a global manufacturer, we seek to operate at peak efficiency, reducing costs while ensuring that our activities have the least possible impacts on the environment. We are committed to achieving zero fossil fuel-energy use and zero greenhouse-gas emissions by 2040, and are developing similar commitments for waste and water use. Our Products: We are making it easier for people to consume our products and dispose of waste and packaging responsibly. Reducing packaging materials and the energy needed to make our drinks, snacks and foods is good for the planet and saves money for Mars, our retail customers and consumers. Working at Mars: Mars Associates are the core of what and who we are. We are committed to creating a workplace where all Associates are free to demonstrate leadership, learn, grow and make a difference for people and the planet through their performance at work. © 2011 Mars, Incorporated and its Affiliates. All Rights Reserved. Mars, Incorporated Principles in Action Summary 2010 | Our Approach to Business | The Story of Mars Our Approach to Business The Story of Mars Forrest E. Mars Sr entered the pet care business in 1935 In 1911, Frank C. Mars began making candies in his Tacoma, Washington, U.S., kitchen and established our first roots in the confectionery business. In the 1920s, his son, Forrest E. Mars Sr., joined his father in business and together they launched the now world-famous MILKY WAY® bar. In 1932, Forrest Sr. moved to the United Kingdom where he founded his own company with a dream of building a business model based on his philosophy of a “mutuality of benefits” for all stakeholders. This vision serves as the foundation of the Mars, Incorporated we know today. A natural entrepreneur, Forrest Sr. began the geographic expansion and diversification of the Mars business. In 1935, Mars entered the pet care arena. In 1940, he founded the M&M’S® business in the United States, and in 1943 he entered the food business. Forrest E. Mars Sr. made Washington, D.C., the headquarters of his diversified company, Food Manufacturers, which eventually grew larger than the original confectionery business that his father had started. In the late 1960s, Forrest Sr. acquired the business founded by his father, which had been headquartered in Chicago since 1929. He named the combined company Mars, Incorporated. In the decades Forrest Sr. led the business, he demonstrated his belief that a company can only endure and thrive if it is creating mutual benefits for all those involved — through the way he ran the business and in his documentation of this Mars business principle. The next generation of the Mars family, Forrest E. Mars Jr., John F. Mars and Jacqueline Badger Mars, led the globalization of Mars, Incorporated. They also carried forward the cultural foundation established by their father with the articulation of the Five Principles of Mars: Quality, Mutuality, Responsibility, Efficiency and Freedom. These themes continue to be deeply woven into the fabric of the Mars culture, its operations and its long-term view. Today, the stewards of these principles include the Mars family and thousands of Mars Associates. Led by nonfamily management since 2001 and h eadquartered in McLean, Virginia, in the United States, Mars continues to prosper as a Principlesbased business. As recently as 2008, Mars became a leader in gum and confections with the purchase of the Wrigley Company. Today, Mars has annual sales of more than $30 billion, and every day more than 65,000 Associates are putting the Five Principles in action to make a difference for people and the planet through performance. Read more about the history of Mars, Incorporated and our Five Principles. © 2011 Mars, Incorporated and its Affiliates. All Rights Reserved. Mars, Incorporated Principles in Action Summary 2010 | Our Approach to Business | Governance Our Approach to Business Governance Each segment has a sustainability champion and/or director, who sits on a corporate Sustainability Leadership Team (SLT) alongside the Chief Sustainability Officer. The SLT agrees Mars-wide strategy and policies on matters relating to sustainability and also includes representatives from our manufacturing, sales, marketing, purchasing, corporate affairs and science functions. A Sustainability Working Group, comprised of corporate-level sustainability managers plus representatives from each segment, develops policies and practices for approval by the SLT, with support from working groups that are developing our strategies for specific issues, such as human rights and sustainable palm oil sourcing. Mars Global Advisors Mars, Incorporated also seeks input from outside advisors on issues of importance to its business. The Mars Global Advisors are an advisory-only group of external experts who engage the senior management of Mars, Incorporated in strategic dialogues regarding major public policy, geopolitical and macroeconomic issues and trends, and how they affect business strategies and priorities. Members of the Mars Global Advisors group include: Associates at the Mars Symbioscience Makassar site in Indonesia We are a global company that is strategically aligned, but acts locally. Our business segments and markets may vary their approaches to reflect the needs of their own customers and markets. But, around the world, we share a commitment to putting our Five Principles in action to make a difference for people and the planet through our performance. Our governance and management structure is set up to ensure clear accountability and adherence to the Mars Five Principles across all business units and business practices and ensure we consistently act with integrity in all our dealings. “Essence of Mars” and other training and development programs, like our Legal Compliance Training, ensure all Associates understand that they are accountable for applying the Five Principles in their business dealings. Board of Directors and Management Team Mars, Incorporated is a privately owned company governed by a Board of Directors who are members of the Mars family. The company is run by a global management team led by President and CEO Paul S. Michaels. Read more about the Board and Management Team. I appreciate Mars’ willingness to listen to tough questions about their products and business. Their readiness to engage in this kind of challenging dialogue has resulted in tangible improvements in the choices they provide consumers as well as the information needed to make their decisions. David Kessler, Mars Global Advisor Setting Policy Our Global Food Policy Group sets globally consistent positions, policies and standards to ensure the Five Principles are reflected in the way we operate, while providing enough freedom to meet regional requirements. The group’s members represent all major functions and business segments. It is led by our Global Head of Public Policy. Our policies and standards cover diverse areas, with examples including our Supplier Code of Conduct, the Mars Marketing Code, and our global Quality and Food Safety Standards. Download all our policies here. Each of our business segments is putting strategies and resources in place to manage its impacts on people and the planet and to contribute to areas such as health and well-being. We also have measures in place to ensure these approaches are consistent and that best practices are shared across the business. Mars Food Associates © 2011 Mars, Incorporated and its Affiliates. All Rights Reserved. The establishment of Mars Global Advisors is a signal of Mars’ determination to harness external perspectives to help it meet the challenges of a rapidly changing world. The way in which the Advisors have been welcomed into Mars and invited to contribute to its principles-based approach to doing business, in my view, is unique. Alan Milburn, Mars Global Advisor Mars, Incorporated Principles in Action Summary 2010 | Our Approach to Business | Understanding Our Impact Our Approach to Business Understanding Our Impacts The water-filtration system at the Mars Food manufacturing site in Olen, Belgium A company of our size and global scope affects people and the planet in many ways. We must identify the social and environmental impacts most relevant and significant (or “material”) to our business and our stakeholders and focus our efforts appropriately. In 2010, representatives from across our business segments and functions worked together to formally identify our material impacts for the first time. We commissioned the Corporate Citizenship Company, an independent consultancy, to assess whether our sustainability programs addressed these impacts, were responsive to stakeholder concerns and in line with best practices. They found that “Mars has transitioned to a more formalized and robust materiality process to identify and address the issues that matter most to the company. All issues identified as being most important to the company are being addressed in some way at present, although some issues are more robustly managed than others.” The impacts covered on this website are all considered material. This section describes the impacts that are relevant across several aspects of our value chain. They are: Climate change Water use Land use and biodiversity We have created a structured approach to develop our understanding of each aspect of our value chain, as shown in the diagram. We assess the available science to complete three key tasks: 1.Prioritize impacts: identify our greatest impacts at each stage of the value chain 2.Develop metrics: identify the most scientifically credible way to measure each impact Social impacts. Quantifying Our Impact Quantifying our impacts across our value chain — from sourcing, manufacturing and product transport, to the nutritional value of our products — is a challenge. These measurements must be done in a scientifically credible and standardized manner because the use of varying methods by different partners can create confusion. Our work in this area rests on four pillars: Basing our business decisions on what is best for people, the planet and business performance Ensuring this work is integral to existing business processes, not a separate process Understanding, prioritizing and addressing our impacts throughout our value chain — from the supplier to the consumer Basing our decisions on scientific data and focusing on outcomes rather than processes. For example, measuring reductions in energy use is more important than measuring investment in energy efficiency. © 2011 Mars, Incorporated and its Affiliates. All Rights Reserved. 3.Set targets: identify science-based targets for each metric to improve our performance Next we assess the feasibility of achieving our targets based on existing knowledge and techniques. If we find that our targets are not feasible using existing approaches, we invest in further research to develop an alternative strategy. Much of that research involves partnerships with others. Once a strategy is developed, we lay out an implementation plan across our businesses and units. This plan may involve new technologies, practices and training for Associates, which require time and a staged approach. To measure our progress against these strategies, we track our metrics centrally, aggregating our results based on the performance of each business unit or segment. The results are used to assess the effectiveness of our strategies and define adjustments as necessary. Mars, Incorporated Principles in Action Summary 2010 | Our Approach to Business | Understanding Our Impact Our Progress to Date Our strategy for our factories and offices is clearest in the form of our Sustainable in a Generation (SiG) program. We are committed to achieving zero fossil fuel energy use and zero greenhouse-gas emissions by 2040. We are developing similar long-term commitments for waste and water use. See Our Operations for details of our progress. However, sourcing our raw materials leads to greater impacts than our factories and offices. We are beginning to apply the structured approach described above to develop similarly robust programs for each element of our value chain. Some metrics, such as greenhouse-gas emissions, are already well established, and our strategies for specific areas such as cocoa sourcing are at an advanced stage. In other areas, we are helping to define and standardize metrics and methodologies so we can identify ambitious targets. For example, short-term water-use-reduction goals keep us moving in the right direction while we work out the best long-term strategy for reducing our impact on water quality and availability. © 2011 Mars, Incorporated and its Affiliates. All Rights Reserved. Mars, Incorporated Principles in Action Summary 2010 | Our Supply Chain | Cocoa Our Supply Chain Cocoa We have developed a four-part approach to improving cocoa farming. We are investing in science to improve cocoa varieties, increase yields, improve resistance to pests and disease and increase water and nutrientuse efficiency. We are working with cocoa growers and national agricultural research institutes to build producer capabilities and apply the results of our research to rejuvenate aging farms. We have committed to sourcing only certified cocoa by 2020 and partner with certification programs that boost productivity and growers’ incomes. Through collaboration with governments and others, we expect to amplify the positive impacts of our initiatives. Most of the world’s cocoa is grown by more than six and a half million small holder farmers Mars is dedicated to making its cocoa supply chain sustainable. The Tropical Commodity Coalition witnesses and welcomes the strong commitment by Mars to source 100-percent certified cacao by 2020. The Tropical Commodity Coalition challenges Mars, in this difficult but very important quest, to collaborate with other major industry players, farmer organizations and civil society organizations for overall sustainability in the cocoa and chocolate sector. Gijs Verbraak, Tropical Commodity Coalition Our target is to source 100 percent certified cocoa by 2020 People love chocolate, but few know that most of the world’s cocoa is grown by more than five million smallholders in parts of West Africa, Southeast Asia and the Americas. For many years, these farmers have struggled with aging cocoa trees, pests and disease, depleted soils and unpredictable rainfall. The resulting low productivity and incomes mean farmers often lack education, information and financing to improve skills and output, keeping them and their families in poverty and limiting access to basic services like health care. As one of the world’s largest cocoa users, we are committed to helping to build a vibrant, sustainable cocoa industry from the farmer to the factory. Our business depends on a long-term supply of quality cocoa, and we believe this begins by increasing farmers’ yields, incomes and quality of life. Cocoa is a labor-intensive crop grown primarily in developing countries, and there has been sustained criticism of the labor practices used on cocoa farms. We have always been and continue to be deeply concerned about the use of child labor in cocoa farming. We do not accept the worst forms of child labor or trafficking in any form and are working closely with others in the industry to address these issues. We work with the International Cocoa Initiative on programs to educate cocoa communities about child labor and educate children in cocoa communities. Innovation in Agricultural Science The research we conduct and support will ultimately help increase growers’ productivity and incomes. We are breeding and distributing higher-yielding, more disease-resistant plants and developing better methods of pest and disease control. This work is led by the Mars Center for Cocoa Science in Bahia, Brazil, which opened in 1982. Today, the Center is a hub for world-class science and collaboration and leads our work on cocoa breeding, agroforestry systems and biodiversityrich environments and land rehabilitation. The results will enable social change, economic stability and environmental stewardship for the benefit of cocoa farmers throughout the world. To help boost the social and economic well-being of the local cocoa growing community, the Center also runs a school for farmers and children from the surrounding district of Barro Preto. Meanwhile, our collaboration with IBM and the United States Department of Agriculture’s Agricultural Research Center has resulted in Mars releasing the sequence of the cocoa genome so scientists worldwide can use it to develop more resilient cocoa crops. See the case study for more details. Mars Global Chocolate President Grant Reid signs Memorandum of Understanding to support a more sustainable cocoa industry © 2011 Mars, Incorporated and its Affiliates. All Rights Reserved. Mars, Incorporated Principles in Action Summary 2010 | Our Supply Chain | Cocoa Certification — Standards That Make a Difference Certification verifies that the cocoa we use is produced in a way that is good for farmers, the environment and the industry. Our certification criteria aim to go beyond existing international standards by introducing productivity measures that will ensure certification directly increases growers’ incomes. We are breeding and distributing higher-yielding, more diseaseresistant plants Working with Growers to Improve Capabilities In 2009, we became the first global chocolate company to commit to sourcing only certified cocoa by 2020. We intend to buy a minimum of 100,000 tonnes of certified cocoa annually from both Rainforest Alliance and UTZ CERTIFIED, and we are seeking additional certification programs to work with, to ensure we accomplish our 2020 target. We are on track — in 2010 we bought 16,000 tonnes of certified cocoa — five percent of our total volume purchased. In January 2010, GALAXY® milk chocolate bars in the U.K. and Ireland became our first chocolate products to carry the Rainforest Alliance Certified™ seal. Read 2011 news on mars.com. We work with cocoa farmers to help them implement more sustainable practices. The sheer number of farmers and lack of infrastructure in some countries make this difficult, but we are making progress. In 2009, we worked with international donor agencies, governments and others to establish Cocoa Development Centers (CDCs) in cocoa-growing regions in Asia. These centers provide farmers with the tools, techniques and training to cultivate high-quality yields. Farmers can also use planting materials from CDCs to establish Village Cocoa Clinics — local nurseries that facilitate the commercial distribution of cocoa plants, providing an additional source of income. Based on our success in Asia, we are expanding the program to Côte d’Ivoire through our Vision for Change initiative. Our goal is to set up 25 CDCs that will reach 50,000 farmers across the country, beginning in Soubré, the country’s main cocoa-growing region. A first step is our work with the National Agricultural Research Center (CNRA) in Côte d’Ivoire to select the best-available trees and graft them onto older, less-productive trees. We will then work with industry partners to create an additional 50 CDCs to reach 100,000 more farmers. We are delighted to be working with Mars to alleviate some of the critical social, environmental and economic issues facing the cocoa industry. Their noteworthy commitment to sustainability is helping to conserve natural resources and maintain livelihoods for cocoa farmers for generations to come. Tensie Whelan, President, Rainforest Alliance Mars Takes Top Citizenship Prize for Cocoa-Sourcing Programs In 2010, our efforts to improve economic development in Ghana’s cocoa-growing region were one of three projects chosen from 77 nominations to receive the U.S. Secretary of State’s 2010 Award for Corporate Excellence (ACE). The ACE awards are nominated by U.S. ambassadors around the world and honor American businesses that demonstrate good corporate citizenship abroad. “Through its development and training programs…Mars is helping to create jobs for…farmers, for drivers in the transportation industry and for workers at the ports,” said Donald Teitelbaum, U.S. Ambassador to Ghana. “Every one of these jobs helps a Ghanaian farmer, driver or shipper to pay school fees for his or her children, pay the cost of health care and provide other essential services.” Case study Unraveling the Cocoa Genome In 2010, Mars, IBM and the U.S. Department of Agriculture (USDA) completed a two-year effort to sequence and annotate the cocoa genome. See the case study for further information. © 2011 Mars, Incorporated and its Affiliates. All Rights Reserved. Mars is a founding and active member of the UTZ CERTIFIED cocoa program. With its bold move of committing to 100-percent certified cocoa by 2020, it has set a positive example for the sector and beyond. UTZ and Mars share a focus on making farmers more successful, and we’re proud to be working with such a forwardlooking company. Daan de Vries, Cocoa Program Manager, UTZ CERTIFIED. Mars, Incorporated Principles in Action Summary 2010 | Our Supply Chain | Cocoa Collaboration for a More Sustainable Cocoa Industry The challenge of creating a thriving cocoa industry is too great for us to tackle alone. We work in partnership with governments, nongovernmental organizations, industry, farmers’ groups and the scientific community to amplify the impact of our collective efforts. In 2009, Mars signed a Memorandum of Understanding with the government of Côte d’Ivoire as the cornerstone of our commitment to collaboration and investment. We are also working with the World Agroforestry Centre, the World Cocoa Foundation, the International Cocoa Initiative and others. Cocoa What We Look for in CocoaCertification Partners We require any certification program through which we source cocoa to work toward: Improving livelihoods and increasing farmers’ incomes through crop intensification and soil management, diversification and price equity Providing affordable, high-quality certified cocoa from diversified origins at competitive premiums Ensuring appropriate quality attributes of cocoa and meeting or exceeding all current food-safety requirements Building towards a fully transparent pipeline, including price and quality signals Growing into a mainstream scalable program, supported by national and international institutions and allowing for standardization of codes, training and auditing Case study My Cocoa Paper™ MY COCOA PAPER™ is a line of quality handmade paper products made in cocoa communities using 70-percent natural cocoa bark and 30-percent recycled office paper waste. See the case study for further information. © 2011 Mars, Incorporated and its Affiliates. All Rights Reserved. Seeking credibility through membership of the International Social and Environmental Accreditation and Labelling Alliance (ISEAL), independent monitoring and evaluation and third-party endorsement Including stewardship of the environment and biodiversity through shade management, crop diversification and protection of biodiversity and forest reserves Meeting the International Labour Organization’s eight core labor standards describing relevant human rights and labor conditions, including child labor Leading to community empowerment and participation by investing increased income to build socially and environmentally sound communities Mars, Incorporated Principles in Action Summary 2010 | Market Summaries | Mars Mexico Market Summaries Mars Mexico Mars began operating in Mexico in 1991. We established our first factory in the Municipality of El Marqués, Querétaro, in 1995, which has become one of the largest and most efficient Mars plants worldwide. In 2001, we acquired the LUCAS® brand, expanding our confectionery portfolio and taking over its Monterrey production site. Mars Mexico Key facts Along with our Querétaro and Monterrey plants, we now have a pet food factory in Poncitlán in Jalisco province and a chocolate factory in Montemorelos in Nuevo León. Mars Mexico is comprised of three business segments that lead their respective markets: Chocolate, Petcare and Wrigley. Our brands include PEDIGREE®, WHISKAS®, SNICKERS®, MILKY WAY®, M&M’S®, LUCAS®, SKWINKLES®, ORBIT® and LIFESAVERS®. Our annual sales are more than $800 million, we employ more than 2,000 Associates and create approximately 12,000 jobs indirectly in our supply chain. Principles in Action Mars Mexico participates in projects to help transform families’ lives. For example, through our partnership with Mitz, a nonprofit organization, we donate our waste packaging materials to artisans who use traditional techniques to weave them into bags and accessories. These products are sold in M&M’S® World Stores and online, providing artisans with a steady source of income. See the case study for more details. In 2010, Wrigley Associates launched a volunteering program focused on raising funds to support victims of natural disasters and for welfare initiatives such as orphanages and nursing homes. As of 2010, Wrigley had raised more than $20,000 in monetary and in-kind donations. Mars Petcare Mexico is committed to ensuring all dogs in Mexico have a home with responsible pet owners. In less than three years, the PEDIGREE® Adoption Drive has made this a reality for more than 8,000 dogs. Our PEDIGREEN program helps keep Mexico City clean by supplying containers to help dispose of the 300 tonnes of dog waste generated daily in the city. Since November 2004, we have provided more than 100 containers in two of the city’s districts, which collect more than 1,200 tonnes of dog waste each year. © 2011 Mars, Incorporated and its Affiliates. All Rights Reserved. Launched in 1991 Three business segments: Chocolate, Petcare and Wrigley 2,000+ Associates Five factories and five offices Popular brands include PEDIGREE®, WHISKAS®, SNICKERS®, MILKY WAY®, M&M’S®, LUCAS®, SKWINKLES®, ORBIT® and LIFESAVERS®