The Retailer Cocoa Collaboration (RCC), a collaborative venture between several leading European retailers, has said that the introduction of the EU Deforestation Regulation (EUDR) is helping to improve the traceability of cocoa supplies.
However, some areas require further attention, with indirect supply chains seen as ‘risk hotspots’ for environmental and human rights issues.
The Retailer Cocoa Collaboration (RCC) has 11 members, Ahold Delhaize, Aldi Nord, Aldi Sued, Carrefour, Casino, Lidl, M&S, Metro, Sainsbury’s, Tesco and Waitrose.
According to a report conducted in association with 3Keel, which sent a questionnaire to nine global cocoa traders, almost all the commitments made to date cover the ‘direct’ portion of a trader’s supply chain, such as when the trader buys directly from a cocoa farmer.
This means that there are still opportunities for unchecked abuses to take place in indirect supply chains, such as human rights issues or deforestation, the RCC said.
On the positive side, the average portion of a trader’s direct supply of cocoa traceable to the farm has increased from 52% in 2022 to 71% in 2023, with three traders able to report near-full traceability of their direct supply chain.
In 2022, the average proportion of a trader’s indirect supply of cocoa traceable to farm was just 9%. In 2023, this increased to 22%.
‘A step in the right direction’
“This increase in traceability is a step in the right direction,” commented Holly Cooper, the report’s lead author. “But traders source as much as 97% of their cocoa indirectly, so this means that overall, the sector is not yet ready for the EUDR.
“More fundamentally, this lack of traceability means the sector has significant blind spots in its ability to understand and address sustainability risks in the cocoa supply chain.”
Cocoa prices soaring
Cocoa prices have seen a significant acceleration in recent months, driven by poor harvests in key producing regions – which on the one hand could prove beneficial for farmers, if they receive higher incomes, but also have the potential to exacerbate supply chain disruptions.
“With global supply tight and prices exceptionally high, there is real risk that progress on addressing environmental and social issues could be stalled or even reversed in the scramble for high-quality supply,” Cooper added. “The lack of policies and commitments covering indirect supply make these particularly high-risk.”
Certification schemes remain a key tool for supporting improved practices and demonstrating a commitment to sustainable production, the RCC added. The proportion of supply chain certification has increased, it noted, with the Rainforest Alliance the most prevalent independent scheme.
