*4.7. Trading Company*

The central actor of the examined supply chain is the trading company (Company G). Company G has developed the central product of the supply chain and connects all actors in the supply chain. Two employees—one from sustainability management [IP7] and one from supply chain management [IP8]—were available for interviews. The supply chain management department maintains contact with all supply chain actors and interacts in case of disruptions or other challenges. The trading company has particular strong governance of its business relationships to the production and retail stages of the supply chain. Generally, the company pursues a sustainable mission: "Behind all the products, [ . . . ] there is of course something much bigger, namely our mission. [We want . . . ] to give something back to this planet through sustainable consumption and through doing something for the climate." [IP7].

The trading company uses several formal and informal mechanisms to coordinate the business relationships in the supply chain and its sustainability. Contracts on minimum purchasing quantities per year and order, prices, the desired method of communication, delivery conditions, and penalties are concluded exclusively with the producer in the supply chain. Sustainability aspects are not included in the contract. All other relationships are maintained on a transactional basis without contracts.

Certificates play a very important role in coordinating sustainability ambitions in the supply chain. The company's products are certified as organic and vegan. Some suppliers and producers are additionally Fairtrade certified, and some farms of the cocoa cooperative have the Control Union Fair Choice label. The packaging of the confectionaries is certified with a Plastic Free label. The carbon footprint of all products will also be communicated using a seal in the future. Due to many different seals and certificates on the market, IP8 would like to see more "[ . . . ] uniformly recognized certificates that are analyzed, monitored, [and] audited by an independent organization."

In addition to formal mechanisms, personal agreements and trust-based business relationships are pursued when working with producers and their suppliers. Interaction is often based on trust, as contracts make the company less flexible: "[ . . . ] but we [have] a very good relationship [ . . . ] with the suppliers and producers in a personal, professional context [ . . . ]" (IP8). The close and trusting partnerships enable a high degree of willingness to compromise. In the event of disruptions or overproduction in the supply chain, for example, the delivery quantities can be flexibly adjusted, strengthening economic (e.g., no contractual penalties due to insufficient delivery quantities) and ecological sustainability (e.g., no destruction of food in the event of overproduction). Additionally, information and data sharing is fostered in close and trusting relationships, which increases the transparency in the supply chain. The increased transparency also promotes the disclosure of all sustainability-related aspects. Since actors know their activities are transparently visible, they are more likely to comply with the agreed-upon sustainability standards. Otherwise, they will be seen as unreliable actors by the trusting partners, which could damage the long-term business relationship.

Next to the direct cooperation with the producer and the retailers, Company F is also interested in integrating the supply chain vertically and aims to establish contacts with the suppliers of the producers. Company F has specifically selected the cooperative for cocoa production in South America which supplies the main ingredients of the confectioneries. However, the contract manufacturer procures other ingredients of the confectioneries (e.g., sugar) from suppliers with whom the trading company has no close contact. IP8 states that contract manufacturers are rarely willing to disclose their trade relationships: "But of course, they won't tell us the exact name of this supplier, because they run the risk that we will then bypass them and source from them [ . . . ] directly." (IP8).
