Cocoa sustainability reporting: NGOs call for more on impact than ‘empty’ numbers on reach

The Cocoa Barometer Consortium, made up of organizations such as Oxfam, UNICEF and Stop the Traffik, said reporting today focuses on successes measured by numbers of farmers reached rather than on changes to income and livelihoods.

“To put it bluntly: we don’t really know who is doing what, we don’t really know whether what is being done is actually working, and, therefore, we cannot know how close we are to achieving sustainability,”​ said the paper, available HERE.​​

Leaning from failures​

Antonie Fountain, managing director of the Voice Network and co-author of the report, said: "We are in a crisis in cocoa at the moment and we need a lot more transparency. Transparency will allow us to hold each other to account...without transparency there is no accountability, without accountability we can say basically anything we want."​

At the World Cocoa Foundation (WCF) Partnership Meeting in Washington D.C. last month he encouraged companies to be transparent on failures.

“The lessons learnt when it goes wrong are often not made public and that's a problem for everyone. ​

“…When something isn’t working you should share it so your competitors don’t have to make the same mistake."​

"…We're talking about non-competitive issues here - things like poverty, child labor, gender rights, land tenure and deforestation. That shouldn't be something that you sell more chocolate by,” ​he said.

Impact: Is it making a difference?​

Fountain alleged companies often measure success by reach, citing CocoaAction’s – a platform for cocoa sustainability for nine leading cocoa and chocolate companies -  intention to train 300,000 farmers by 2020.

"300,000 is an empty number in itself. How many cocoa farmers are there? 5.5m, so who's going to do the other 5.2m?" ​Fountain said.

He urged companies to report more on impact.

"If you train a farmer, that's not an impact. What is the effect of the training? Has the farmer actually been able to improve his livelihoods?"​

"So you've built a school - what's the effect of building that school? Are kids becoming less illiterate? What's the attendance rate?"​

Reporting income​

The NGO consultation paper urges companies to be transparent about farmer income and to align on a living income benchmark to measure success.

Nestlé Cocoa Plan: Farmer income

In a recent interview​​ with ConfectioneryNews, Christian Frutiger, global head of public affairs at Nestlé, said the company had established baseline figures for average cocoa farmers' incomes in the Nestlé Cocoa Plan. However, the company has not publicly reported the baseline and says it will first gather impact data before releasing numbers.

Fountain said: "Since poverty is the core problem we are all trying to solve, why aren’t you measuring that?"​

He said companies could go further by publishing average cocoa farm gate prices as well as taxes paid in cocoa origin countries.

The Voice Network chief applauded Barry Callebaut for releasing a study on farmer income earlier this year.

The study in collaboration with French Development Agency (AFD) found average incomes of around 91 US cents (CFA 568) per day for 700 cocoa growers surveyed in Côte d’Ivoire in 2013-2014. This is less than half of the World Bank’s extreme poverty line for Côte d’Ivoire ($2.40).

‘Glass bowl’​

Nicko Debenham vice president of Global Cocoa Sustainability at Barry Callebaut said at the WCF Partnership Meeting last month: "Poverty is the cornerstone of the challenge – my obsession is about poverty.”​

He said supply chain transparency was becoming a key topic as consumers seek ethical products, but said the whole cocoa sector, including governments and NGOs should be held accountable, not only industry.

“Social media has changed the world into a glass bowl into which you will be held accountable,”​ he said.

Comparable reporting​

The NGO consultation paper suggests the industry should align on reporting metrics and time periods - either by cocoa crop year (October to September) or calendar year.

Fountain said collecting data for the next Cocoa Barometer – a report on progress and challenges in cocoa sustainability – had been a challenge since companies often report different key performance indicators (KPIs) over varied periods, making it hard to compare data and to know what is really working.

"We're starting to see one or two of those things starting to happen within CocoaAction, which is a great first step,” ​he said.

“But a lot of that data is aggregated to just CocoaAction level, so we don’t know what individual member companies are actually doing, which means they are not accountable to their own commitments....We need to see who's pulling their weight."​

CocoaAction reporting​

CocoaAction – a platform that includes Mars and Mondelēz among others - reported its 2016 Annual Report​​ last week.

The report says only 3,100 of the 147,000 farmers reached by CocoaAction have adopted the full productivity package suggested by the training. It acknowledges this is because farmers face “financial hurdles”​ to rehabilitate and replant their farms.

The report contains data on farmers reached by training and levels of implementation (e.g. % of farmers applying the training) as well as average yields per hectare.

However, data is not broken down by member company and farmer income and average farm gate prices paid are excluded.

Legal ramifications​

But should companies be worried about reporting high levels or child labor and incomes that leave farmers in extreme poverty or even below national minimum wages?

Is it a recipe for lawsuits and adverse publicity?

Fountain said companies could consult national authorities in major chocolate consuming countries to mitigate risk from litigation.

"Having said that it is essential you are held accountable for transgressions, but I think we’re leaning in the cocoa sector, for example with child labor, the thinking has gone from outright forbidding because you just drive it underground.”​