Cocoa Sector Drives Sustainability Innovation Agenda

During the year Aidenvironment has worked on several assignments in the cocoa sector. For the International Finance Corporation (IFC) we developed a sustainable transformation model and conducted and in-depth investigation of the West African cocoa sector, together with our consortium partners International Institute for Environment and Development (IIED) and New Foresight. Aidenvironment also reviewed Solidaridad’s Cocoa Support Program and are currently evaluating cocoa-related programs by IDH and Fairtrade. UTZ Certified recently selected Aidenvironment to conduct a baseline study of the Indonesian cocoa sector. Many successes are there, however work still has to be done. The current dynamic in the cocoa sector is already generating interesting results and some potential lessons for other sectors are starting to emerge.

Cocoa production faces some persistent sustainability issues, such as high poverty levels among farmers, low yields, child labor, poor working conditions and declining interest in cocoa farming among the younger generation. Continuous public pressure and increasing industry concern about long-term supply security have created an interesting dynamic in which new partnerships are developing innovative solutions to meet the sustainability challenges. It is fascinating to see how the industry is urgently reaching out to farmers to secure supplies and meet ambitious sustainability targets, most of which are for certified cocoa.

Voluntary certification systems like UTZ Certified, Rainforest Alliance and Fairtrade International have been pushing their systems to deliver the increasing demand for certified cocoa and are increasingly under pressure to demonstrate and improve their impact. The increased call for impact rather than compliance is also pushing the industry to come up with new solutions. Often in partnership with NGOs or public sector, companies are investing in farmer organization and training, input delivery and social infrastructure. In turn, these are generating new kinds of service delivery models, supply chain relationships, and monitoring systems, as well as new insights into viable and sustainable farming practices.

The cocoa sector is also where non-competitive collaboration is being taken to another level, with the main industry players rallying behind the Cocoa Action common sustainability agenda. Meanwhile, governments in both origin and destination countries are trying to increase their leverage over the sector. The Ivory Coast government has recently been relatively successful in guaranteeing minimum prices and quality, while the EU is developing an ISO sustainability and traceability standard for cocoa imports.

If you have any questions on the cocoa sector or want to know how lessons from this sector could be applied in other sectors, contact Jan Willem Molenaar.