No shortcuts to environmental goals: “A just transition demands a whole market shift”

At the Marmalade Festival in Oxford on 2 April, Global Canopy held a panel discussion focusing on deforestation and associated human rights abuses. The panel – public policy lead for Tony’s Chocolonely Belinda Borck, Global Canopy Deputy Executive Director Helen Bellfield and Farmz2U founder Aisha Raheem – discussed the importance of data, laws and transparency to drive real change.

By Ritu Johny

Social Media Officer, Global Canopy

Data is power

Over 90% of deforestation is driven by agricultural expansion for a handful of commodities – like beef, soy, palm oil, cocoa, coffee, rubber and timber. Within the nature space, data on deforestation is the strongest and as Trase co-director Helen Bellfield told the event, it can give companies a real focus.

“A lot of the deforestation risks are quite concentrated, especially in large countries. Half of Brazil’s soy exports in 2022 come from municipalities with less than 5% of its soy deforestation and conversion. A regional benchmarking system enables companies to identify and focus their efforts on areas with the highest level of risk,” Helen noted.

In the EU, cocoa is the top commodity for deforestation exposure. It’s the second biggest deforestation driver in the UK. Tony’s Chocolonely’s Belinda Borck explained their five-pronged approach to sourcing, claiming their chocolate bars are ‘99.95% deforestation-free’.

“Starting with traceability, which involves unlocking environmental, operational and social data on human rights abuses, to offering a higher price for cocoa, and working directly with partner cooperatives, we track progress over a five-year period,” Belinda said. 

She called for a dramatic change in data ownership and compensation. “Farm owners should have the rights to hold and sell their data. The companies sourcing from similar or the same farmers should be open to sharing that data.”

Aisha Raheem, CEO of Farmz2u, a company that promotes climate adaptive and resilient food systems by increasing visibility in supply chains, added that the starting point for data ownership is transparency. ”Farmers are now getting less than six per cent of profits from a chocolate bar. Data ownership doesn’t mean anything to them unless it translates to more money. The industry dominance by the three cocoa giants needs to shift and farmers have to start getting paid a competitive rate.”

Focus on effective legislation

Our 10th Forest 500 report revealed a valuable lesson from a decade of tracking deforestation action – depending on voluntary action from companies and financial institutions is not enough. Legislation is essential to drive change.

At the same time, Aisha Raheem highlighted the crucial question of how laws work in practice. “Regulation is great, but it’s all about implementation.” 

“Without solving the fundamental problem of fair prices or properly managing the regulation, the farmers may face unintended consequences of an additional burden of the cost of compliance. It is imperative to change the corporate mindset of ‘cut costs, keep profits high’,” Aisha added. 

Helen Bellfield agreed and cautioned the European Union deforestation regulation (EUDR) cannot be seen as a silver bullet. 

“Corporates should avoid shortcuts to achieve environmental and social impact goals by clipping supply chains and rather focus on investing in ground solutions. A just transition demands a whole market shift involving long term outcomes across landscapes, not just individual farms.”

Helen Bellfield, Global Canopy Deputy Executive Director

“And the EUDR should be supported by complementary policies to include smallholders and vulnerable groups and help them comply and access this market. It’s also important to invest in national traceability systems especially in large domestic markets like Brazil and China, to avoid ending up with a two-tier market,” Helen added. 

While a lot of companies on the Cocoa Forest Initiative report great stats on direct supply chains, there exists no data on indirect supply chains. Helen warned that these transparency gaps are huge because indirect supply chains are bigger than direct supply chains in many cases.

According to Aisha, visibility in supply chains should apply across the industry and not just for a small group. “Companies have to take up responsibility to make their supply chains more transparent and traceable. Greater visibility in the supply side will help buyers to exercise more agency.”

Massive prevalence of child labour

Deforestation goes hand in hand with human rights abuses. In Ghana and Côte d’Ivoire in West Africa, where Tony’s Chocolonely sources its cocoa from, child labour is a major concern, Belinda revealed. 

“Over a period of five years or more – the minimum time span of the chocolate company’s partnership with cooperatives – the prevalence rate reduces from around 50% to 20% in two or three years,” Belinda said. It plunged to nearly 3.9% in the case of their longest-term cooperative, she added.

“Raising awareness at community level, finding individual solutions and changing mindsets are key to tackling illegal labour. Prevention is better than remediation,” Belinda concluded.