MEASURING IMPACT IN CACAO PRODUCTION SUMMER ALLEN
SUSTAINBILITY: RELEVANT OR USEFUL? RESILIENCE Focused on resistance to and recovery from shocks (Rodriguez-Niki, 2015). TRIPLE BOTTOM LINE Idea that a business should have a social and environmental boJom line as well as economic (Elkington 1998). Scope tends to be limited (Rodriguez-Niki, 2015). SUSTAINABILITY “development that meets the needs of the present without compromising the ability of future genera8ons to meet their own needs.” -Bruntland Commission Report “Our Common Future” 2
HISTORY OF SUSTAINABILITY AS A CONCEPT • The Bruntland Commission report published in 1987, Our Common Future, discussed the links between development and the environment including social issues. • ‘Sustainability’ can be viewed as a framework for evaluaUng the long-term effects of human acUons. • Sustainability is the foundaUon of the United NaUons 2030 Agenda for Sustainable Development and its Sustainable Development Goals (SDGs) (IISD). 3
SUSTAINABILITY Profit Economic Goals Healthy Ecosystem Efficiency Reduced Loss Incomes EducaUon Resilience Environmental Social Goals Goals Sustainability is a system in which goals can work together to assure that all sectors remain viable and healthy. Ex: water quality 4 Graphic Source: Authors’ adapta8on from FAO (2013)
CHALLENGES FOR ACHIEVING SUSTAINABILITY • Global Issues: Climate change, resource depleUon/degradaUon, populaUon growth, and inequality. • Values and behavior: A change in values is needed to limit overuse and move towards sustainability (Limits to Growth, 1972). • Measurement : Complicated as it transcends sectors and Ume periods in which we oben work. The only way to assure sustainable management of resources is through measurement or at the least, targeted observa8ons over 8me. 5
MEASUREMENT • Improves efficiency and effecUveness of programs • Assures a resilient supply chain • Provides informaUon for donors, boards, and consumers • IdenUfies boJlenecks • Supports progress across all realms (people, planet, and profit) 6
MEASURING SUSTAINABILITY Ø Metrics obtained through: Ø Interviews with producers organizaUons Ø Surveys with producing households Ø Tracking prices and quanUUes over Ume Ø QualitaUve measures of community projects and producUon over Ume Ø There are many ways of tracking what is (or isn’t) sustainable, with some more effecUve than others. 7
ECONOMIC INDICATORS • Rural incomes • Poverty measures (various) • Access to salaried employment • Long-term contracts or opportuniUes • Savings and credit opportuniUes • Agricultural producUvity and growth • Price paid/received and price volaUlity • Capacity development • Quality measures • Inequality 8
SOCIAL INDICATORS • Labor rights • Gender equality • Community development • Wages • Work with marginalized communiUes • Living and working condiUons • (water, educaUon, sanitaUon) • Food security and nutriUon 9
ENVIRONMENTAL INDICATORS • Soil health • Water use and quality • Biodiversity • Use of chemicals • Tree cover • Carbon sequestraUon and miUgaUon 10
BRIEF OVERVIEW OF PRIORITIES AND REPORTING 11
PRIORITIES OF CERTIFYING AGENCIES/CORPORATE SUST. PROGRAMS CERTIFYING AGENCIES: • UTZ Female ParUcipaUon • Rainforest Alliance Child Labor/Labor Rights • Fair Trade(FLO) Farm producUvity/mgmt • USDA organic Producer Org or Trg CORPORATE SUSTAINABILTY Community Development PROGRAMS: Traceability • Cocoa AcUon (World Cocoa FoundaUon)* Quality/Flavor • Cocoa Life (Mondelēz) Price>CommodityPrice • Forever Chocolate (Barry Ecological PracUces Callebaut) 0% 20% 40% 60% 80% 100% *Barry Callebaut, Cargill, Ferrero, Hersheys, Mars, Mondelēz, Nestlé, and % of Corporate Sust. Programs Olam. % of cerUfying agencies Informa8on compiled from company reports by Kers8n Ross, FCCI 12
PRIORITIES OF SPECIALITY CHOCOLATE COMPANIES A few prioriUes are Female ParUcipaUon assumed due to exisUng Child Labor/Labor Rights cerUficaUon and not explicitly stated: Farm producUvity/mgmt child labor, traceability and Producer Org or Trg ecological pracUces. CerUfied "Direct" RelaUonship Includes: Community Development Askinosie Dandelion Traceability Equal Exchange Felchlin Chocolate Quality/Flavor Gui\ard Chocolate Madecasse Chocolate Price>CommodityPrice Taza Chocolate Theo Chocolate Ecological PracUces TCHO Chocolate Valrhona Chocolate 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Zo\er Chocolate 13 Informa8on compiled from company reports by Kers8n Ross, FCCI
REPORTING AND TRANSPARENCY Theo: Valrhona: TAZA Commitments: Third Party AudiUng LT partnerships in 11 countries • Direct RelaUonship (visits verified) Quality Premiums 17 community projects since 2012 • Premium of ≥ $500/tonne above Transparency: Cocoa Pricing Responsible Purchasing Charter NYICE; floor of $2,800 SpecificaUons Goals for reducing energy & water • Quality (≥75% fermentaUon & ≤7% Fair Trade and Organic consumpUon moisture) Regular Visits Working on agroforestry project • USDA CerUfied Organic • Annual Transparency Report Source: hJps://www.tazachocolate.com/pages/taza- hJps://www.theochocolate.com hJps://www.valrhona-chocolate.com/commitment direct-trade 14
SUFFICIENCY OF PRIORITIES IDENTIFIED While these prioriUes stated are necessary for business planning, are they sufficient? …It depends… What is the ulUmate goal? If goal is understanding the supply chain and changes in that supply chain across the social, economic, and environmental sectors, consistent observaUon of these sectors and how they reflect the prioriUes is necessary. If the goal is communicaPng impact or assuring the model is “sustainable” to consumers or targeUng specific concerns they have, clear indicators and measurement is also necessary. 15
CREDIBILITY CONUNDRUM • The issue with any claim by any product or service is the assumpUon of credibility. • Findings generally show that cerUficaUon leads to very heterogenous effects within and among villages, based upon how producers respond; challenges faced by producers are oben downplayed (Ruben, 2017). • Consumers are reaching burnout and are more skepUcal about standards. “ The Fair Trade Scandal: MarkePng Poverty to Benefit the Rich.” (2014) Ndongo Samba Sylla. • [Based upon the book’s findings] “The fair-trade labelling movement has been more about easing consciences in rich countries than making serious inroads into poverty in the developing world.”—The Economist 16
METHODS OF ASSURING IMPACT OR PROGRESS 17
ISEAL ALLIANCE • To address the credibility of parUcular standards, ISEAL Alliance provides some guidance. • ISEAL has set up principles for standard systems that target parUcular goals and provide trainings. • There is a strong focus on poverty reducUon • Connect with other indicators such as COSA, SSI, FAST, IRIS indicators measuring: • Progress of producer groups along the outcome pathways • Household-level impacts • The major standard bodies are members of ISEAL. • ISEAL also conducts some studies on progress and producer needs through external funding. 18 Source: h\ps://www.isealalliance.org/
SELECT UTZ INDICATORS 19 Source: h\ps://utz.org/wp-content/uploads/2015/12/UTZ-program-indicators-version-4-2017.pdf
UTZ EXAMPLE • Wageningen published this year research from the Ivory Coast and financed by UTZ, IDH and Nestlé (Ingram, et. al 2018). • While they did find higher incomes for cerUfied farmers, the authors found that incenUves are insufficient to moUvate cacao value chain shibs towards sustainability; support for resilience is needed. • CerUficaUon, training, and services together, however, does have an impact on producUvity and incomes. • Services (access to credit, ferUlizers, etc) and training packages should be tailored to the needs of the producers. Source: h\p://library.wur.nl/WebQuery/wurpubs/538747 20
LESSONS • Tracking standards requires oversight and financing • All of these principals (for example, the measurement of sustainability) are defined by the standard so there remains a gap in transferability. • Outside of these standards, tracking sustainability in terms of social, economic, and environmental goals is expensive and Ume-consuming. • Consumers can view reports covering a range of indicators; oben unclear on what should be a concern for them in their purchases. 21
COMMITTEE ON SUSTAINABILITY ASSESSMENT (COSA) • Comprehensive list of social, environmental, and economic indicators • Primarily works with large projects to track a variety of indicators. • Demand-driven and funded by external donors or organizaUons. • Requires planning, funding, and control in the producing areas. 22 Source: COSA Measuring Sustainability report
EXAMPLES OF INDICATORS 23 Source: COSA Measuring Sustainability report
INDICATORS What are issues of concern? Ex: poverty What are the metrics for analyzing these issues? Ex: household incomes, etc. What are appropriate the limits and Ume horizon? Ex: annual, seasonal, adult household members How much will uncertainty or unknown factors influence assumpUons? Ex. Crop loss, sickness, urgent family needs, local conflict, drought/pests Adapted from Rodriguez-Nikl (2015) 24
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