EU legislation and economic downturn – sustainability in cocoa is more important than ever

Kate Clancy,​ the sustainability lead for Cargill’s cocoa and chocolate business, believes “when it comes to supply chains and costs and expectations on how society should run … I think that it actually means we will see increased interest in the sustainability of business and the sustainability of society at large, and if anything that will continue to create interest and expectation for the work that's being done.​

“And what I hope is that it will be increasingly mainstreamed and we'll accelerate the work that we're doing. So, I think the need will only increase, or, let's say the need is there and will remain … but I think the expectation to deliver will increase​.”

But with EU regulation expected to come into force later this year to ensure that supply chains are free from processes and products that cause deforestation. Companies must prove that their products are produced legally or will be unable to sell products in the EU that were produced on land cleared after 2020.

One of the issues flagged by the cocoa sector is that the new requirements may harm small-scale farmers and fail to make a visible difference to global deforestation. Another issue is that companies sourcing products such as cocoa from West Africa from individual farms may simply exclude them from the value chain all together, leaving farmers destitute.

Clancy​ says another way in which you can combat deforestation and address livelihoods, is “when a farmer knows that they own their land​ … the same way when you and I know that we actually own the house that we're living in, you're more likely to invest in it. ​

“You're more likely to fix the roof and maintain your garden because you actually have that security. So there's a lot of interconnections between the issues and it will be important for all stakeholders to appreciate those connection points.”​

Clancy says Cargill is working to make sure small-holder farmers aren't excluded from its value chain and can continue to make a livelihood from cocoa and other incomes in a secure way while protecting the environment.

In a comment article for Reuters, Matthew Spencer​ global director, landscapes at IDH, says: “If the EU regulation is applied with a heavy hand, it will make companies more risk-averse, and they will move to ‘safe’ sourcing areas that have been deforested decades ago. In parallel, producer governments will encourage exporters to supply growing demand in Asia, where there are no import restrictions.​

“But if the EU engages producer governments in their own plans to get to zero deforestation and uses the regulation as part of efforts to incentivise company investment in hotspot landscapes, then it will help turn the tide in production areas bordering our last great forests​.

One solution, highlighted in the academic website the conversation​, is tracing supply to villages or particular forests, which would be a fairer and more practical option. The Dutch organisation IDH Sustainable Trade Initiative applies this idea through their Sourceup platform. The platform highlights producing regions where commodities meet specific sustainability criteria.

Regarding rising prices on the global economy, Paul Schoenmakers​, Tony’s Chocoloney Head of Impact, tells ConfectioneryNews: “Cocoa is one of the few commodities that didn’t see a price rise. On the contrary, the cocoa price for farmers has dropped even further. At the same time, they see their costs for farming and a decent living increase. ​

“As a result, more cocoa farmers are pushed into extreme poverty. Poverty is the root cause of the problems in cocoa (illegal labour and deforestation), so getting farmers to earn a living income is a must.​

“The governments of Ghana and Côte d’Ivoire have renewed their pursuit for higher cocoa prices and sent a serious message by boycotting the WCF meeting in October 2022. However, most companies still refuse to pay more and continue to maximize their profits at the expense of human rights violations in their supply chains.”​

Gary Lewis​, President of NEODA and Chief Commercial Officer for KTC Edibles, says: “Although sustainability in the confectionery industry isn’t necessarily under threat, it’s fair to say there’s still work to be done – and choosing the right oils and fats is key to instigating and maintaining positive change.  As suppliers, we must continue to play an important role in driving sustainability by taking the initiative in sourcing sustainable oils and developing sustainable solutions​.”