The Sustainability Lie: Many companies in the cocoa and chocolate industry engaged in greenwashing – Cocoa Barometer 2022
The Cocoa Barometer 2022 report administered by the VOICE Network has indicated that many companies in the cocoa and chocolate industry are engaging in ‘greenwashing’. The report posits that if the generally accepted definition of sustainable development by the Brundtland Commission—development that meets the needs of the present without compromising the ability of future generations to meet their own needs—is anything to go by, then many cocoa and chocolate companies are engaged in a sustainability lie.
According to the report, claims by many companies that their products are sustainable is deceptive considering the poor livelihoods of cocoa farmers, the degrading ecosystem and lack of development in areas where cocoa is sourced. Majority of cocoa farmers continue to live below the poverty line, find it difficult to feed their family, support their children in school and hire adult labourers to work on their farms. Companies therefore cannot claim their products are sustainable while these issues continue to persist in the cocoa sector.
Certification schemes not telling the full story of sustainable cocoa
According to Cocoa Barometer, the practice of companies basing their sustainability claims on certification schemes is misleading. This is because certification standards have largely been one-sided focusing mainly on farming standards—good agricultural practices, deforestation, and elimination of child labour and forced labour—and neglecting companies’ purchasing practices especially in relation to pricing.
In a baseline report released by the Swiss Platform for Sustainable Cocoa (SWISSCO), based on responses from 40 members (manufacturers, traders and retailers), it was reported that in 2021, about 97% of cocoa beans and 71% of total cocoa equivalents imported into Switzerland were sourced sustainably mainly from Ghana and Cote D’Ivoire. Meanwhile farmers in these countries continue to lament their impoverished livelihood mainly due to low farm gate prices for their produce.
Companies cannot boast of sustainable sourcing when the producers of the crop struggle to meet the basic needs. Companies can only talk about sustainability in the sector when they are willing to pay higher farm gate prices that would enable cocoa farmers earn a living income—the net annual income required for a household in a particular place to afford a decent standard of living (food, water, housing, education, healthcare, transport, clothing, and other essential needs including provision for unexpected events) for all members of that household. Until farmers enjoy a living income, cocoa cannot be sustainable.
Business as usual
Although the issue of living income has gained traction among industry players, cocoa and chocolate companies have not demonstrated true commitment towards achieving a living income for farmers and are rather engaged in ‘business as usual’. Whilst a number of these companies—Hershey, Barry Callebaut and others—continue to record high profits in the midst of the global pandemic and economic challenges, many farmers are nowhere close to earning a living income and harshly bearing the brunt of the growing inflation and rising cost of living.
If farmer poverty is accepted as the root cause of sustainability challenges in the cocoa sector—deforestation, child labour, forced labour etc—then sustainability interventions and programmes must address poverty challenges of cocoa farmers starting from how they can enjoy a living income. It is therefore not surprising that over decades of the implementation of several sustainability programmes by various international organisations and individual companies, the sector continues to be heavily bedeviled with poverty, deforestation, child and forced labour issues. This is because the problem has not been tackled from the root. According to the Cocoa Barometer “living income should be the starting point, not a finish line”.
Last year, the governments of Ghana and Cote D’Ivoire—the two major world producers of cocoa—boycotted the World Cocoa Foundation partners’ meeting on cocoa sustainability in Brussels. A move that was highly commended by various civil society organisations and farmers associations in the two countries. Both governments accused multinational cocoa and chocolate companies of blocking measures to improve cocoa farmers’ living income by failing to pay the Living Income Differential (LID). In 2019, the two countries introduced the LID which applies a premium of $400/tonne on the export price of cocoa. This is intended to increase the incomes of cocoa farmers to enable them achieve a living income.
Achieving cocoa sustainability
According to Cocoa Barometer, farmers can enjoy an appreciable living income when efforts by governments and corporations are geared towards good governance policies, good purchasing practices and good agricultural practices. Living income is pivotal to the survival of cocoa farmers and should be treated as a human right issue enshrined in due diligence regulations that seek to enhance sustainable sourcing of cocoa.
SWISSCO in their 2022 baseline report has highlighted their sustainability roadmap in tackling challenges in the cocoa sector by 2030. The platform targets four main areas of action: living income, deforestation, child labour and traceability.
In relation to living income, SWISSCO members have indicated their commitment to adopt a holistic approach to ensure that farmers earn a living income by 2030 focusing on four key determinants: price, yield increase, reduction in production costs, income diversification, and improvement of enabling conditions and local governance.