Eliminating Deforestation from the Cocoa Supply Chain

Climate Focus and the NYDF Assessment Coalition have spent considerable time highlighting the deforestation impact from the big 4 forest risk commodities, and the global importance of efforts to transform these supply chains laid out in our NYDF goal 2 report.  Another important commodity, cocoa, has received less attention as a driver of deforestation. However, an increasing sensitivity for deforestation by cocoa, combined with an awareness of productivity and livelihood limitations of smallholder farming, has led to cocoa companies being increasingly active in sustainability through deforestation-related commitments, programs, and sustainable certification.

Climate Focus, in collaboration with the BioCarbon Fund, the Forest Carbon Partnership Facility (FCPF) and the World Cocoa Foundation, is pleased to release a new report Eliminating Deforestation from the Cocoa Supply Chain. Our analysis includes an examination of the cocoa supply chain, its associated deforestation, and the role and limitations of certification schemes to reduce deforestation. In addition, the deforestation-related commitments from cocoa companies are analyzed across the value chain by looking at commitment types, implementation, and the enabling environment. The company commitments’ data included in our analysis are based on a combination of extensive research of public company and NGO materials, and company surveys and interviews.

Our findings are compared with lessons from palm oil since it has the most similarities to cocoa due to its large contingent of smallholder producers and their limitations that exacerbate deforestation. Finally, we describe our vision for zero-deforestation cocoa with key principles:

• Protection of natural primary and secondary forest: Companies can commit not to source cocoa associated with the deforestation of natural forest.
• Legality: For producers and consumers, it is a priority to eliminate illegality within the cocoa supply chain.
• Transparency: Companies, policy makers, and advocacy groups need to know who is driving deforestation and where.
• Integration into long-term strategies: For the public sector, this means anchoring policies in long-term development strategies and legal frameworks. For the private sector, efforts that are supported at the CEO level and form an integral part of all operations will have the best success.
• Operation at Scale: Larger-scale programs allow the establishment of incentives across a landscape, and economies of scale in information and extension services.

These principles can be operationalized through several key strategies that we describe in the report. Our work is meant to inform industry, governments, and development partners to be effective actors in a zero-deforestation cocoa future. Collectively, these stakeholders could invest in both cocoa smallholders and the cocoa forest landscape, as a mutually beneficial approach to securing the viability of cocoa production and the region’s climate resilience. The World Bank Group is active in the sustainable cocoa dialogue, and continues to help both Ghana and Cote d’Ivoire develop emission reductions programs that aim to create incentives for more sustainable cocoa landscapes by paying for verified emission reductions.  To further this goal, more analysis will begin exploring the technical, financial and incentive barriers and opportunities to advance climate-smart cocoa at the farmer level. You can see the World Bank’s own featured story on the cocoa report.

In addition, our work is part of a larger effort in 2017, whereby the World Cocoa Foundation and leading cocoa producers are developing a global public-private framework of action to address deforestation in the cocoa supply chain. This framework is planned to be presented at the United Nations Climate Change conference in Bonn, Germany in November 2017.

This publication is also available at: https://openknowledge.worldbank.org/handle/10986/26549   http://bit.ly/cocoaforest