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2 26th WCF Partnership Meeting & Cocoa Sustainability Trade Fair - Day 1 October 15-16, 2014 Copenhagen, # WCFPM

3 Thanking Our Sponsors

4 Embassy of Côte d Ivoire in Denmark Visit the Cocoa Sustainability Trade Fair Embassy of Côte d Ivoire in Denmark

5 WCF Partnership Meetings Serving as the global platform for sustainable cocoa since 2000

6 Welcoming New Members in 2014

7 WCF Member Companies PT. Hope Indonesia Quality Candy Raul Ocazionez Foundation Tulip Cocoa As of September 2014

8 Carsten Lyngsø Thomsen CEO, Toms

9 Carsten Lyngsø Thomsen, CEO

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13 Carsten Lyngsø Thomsen, CEO

14 Barry Parkin WCF Chairman Bill Guyton WCF President

15 Cocoa Break

16 Defining Sustainability, Standards and Certification Introduced by: Panelists: Howard-Yana Shapiro, Mars, Incorporated Jason Clay, World Wildlife Fund

17 Do Standards and Certification= Sustainability? Howard-Yana Shapiro, PhD Chief Agricultural Officer, Mars, Incorporated The 1 st Mars, Incorporated Fellow Senior Fellow Plant Sciences, The University of California, Davis Distinguished Fellow, The World Agroforestry Centre 17 WCF Copenhagen 22 October 2014

18 No matter how many opinions you line up, you can t vote nonsense into truth! Modified from Kevin Cameroon CycleWorld 2014

19 Why Cacao Science Must Translate to Sustainability? Without new science the industry will stagnate, one has to only look at current low yields, little disease resistance, climatic unadaptability to see the future No single scientific advance will sustain the industry Soils are as important as sequencing Microbiomics are as important as marketing Phytoecology is as important as pathogenicity Needs to be demand- driven not supply-led (esp. by farmers) Possible Feasible Practical Profitable Not all of science developed will work Critics will coat it with caveats, conditions, qualifiers Remember the biggest consumers of cacao are pests, disease and insects It will cost money, real change always does

20 Why Certification?

21 $100,000,000

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23 37% of the rural children in Africa are stunted! Physically! Neurologically! Economically!

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25 Aflatoxin/Ochratoxin Causes liver cancer and stunting Found in cassava, cacao, maize, peanuts, millet, rice, sorghum, sunflower seeds trees nuts and many spices.

26 How do we measure the sustainable health of the cacao sector?

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28 Perspective on easy definitions Sustainability Production of cacao in an economically, socially & environmentally responsible manner that ensures farmers livelihoods and security of supply for current and future generations Standards Criteria which must be met when producing cacao in order to ensure that sustainability is realized Certification Third party verification that the cacao meets the criteria in the standard and is therefore considered certified 28

29 Easy Hard

30 What is hard to define?

31 Winner and losers Problem based (utility, not pure curiosity) Social, Cultural, Environmental, Ecological, Economic change Testing hypothesis, constructs, paradigms Systematic/experimental approaches Observations (repeated) Independent thinking, deductive reasoning Documented and shared Undergoes critical peer review routinely (credible) Validated, revalidated, revisioned (robustness) Unplanned serendipity Really progressive, building on base of evidence and knowledge

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33 Scale and Impact Scale Wasted Opportunity Sector & Livelihoods Transformation Certify Prosperity Certify Certify Poverty Niche success Impact

34 Issues and Opportunities Consumers concerns Chasing cash premiums Passing annual audits Fragmented efforts Profitable farming businesses Investing in inputs & training Adoption of modern techniques Action aligned to consistent goals

35 Why should I care about future generations what have they ever done for me? Groucho Marx

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37 Lunch & Cocoa Sustainability Fair Dansk Industri Foyer

38 Current Developments and Next Steps in Cocoa Sustainability Moderator: Panelists: Bruce Wise, International Finance Corporation Gerard Manley, Olam Han Loke Fong, International Cocoa Organization (ICCO) Joost Oorthuizen, IDH/The Sustainable Trade Initiative Massimiliano Wax, Rizek Cacao Sona Ebai, World Cocoa Foundation

39 Future ISO/CEN Standards: A Tool for Mainstreaming Sustainable Cocoa Presenters: Jack Steijn, CEN Committee on Sustainable and Traceable Cocoa Nicko Debenham, Barry Callebaut Panelists: Antonie Fountain, Voice Network Edouard N guessan, Le Conseil du Café-Cacao (Côte d Ivoire) Isabelle Adam, European Cocoa Association Joseph Larrose, Touton Pierre Etoa Abena, Office National du Cacao et de Café (Cameroon)

40 ISO/CEN Standards: A Tool for Mainstreaming Sustainable Cocoa National Mirror Committees and delegates to international ISO meetings Civil Society Liaisons from international organizations ISO International Standards Organization DEFINING SUSTAINABLE COCOA Governments Producer Countries Industry Trade Associations CEN European Committee for Standardization World Cocoa Foundation 2014 All rights reserved

41 CEN/ISO Standards: A Tool for Defining and Mainstreaming Sustainable Cocoa Management System (EN ISO ) Defines: Management in Farmer Organization Leadership, Resources, Documentation Planning, Farm Development Plan Monitoring, measurement, improvement People (EN ISO ) Planet (EN ISO ) Defines: 3 levels of Performance Requirements entry (max years to be set) medium (max years to be set) high (end level) Indicators Profit (EN ISO ) Traceability (EN ISO ) Conformity Assessment (EN ISO ) (based on ISO 17065) Defines: Traceability of Sustainable Cocoa Defines: Requirements for 3 rd party conformity assessment bodies (certification) World Cocoa Foundation 2014 All rights reserved

42 The Path Forward for Certification Presenter & Moderator: Jerwin Tholen, KPMG Advisory N.V. Panelists: Andreas Kratz, Fairtrade International Daan de Vries, UTZ Elan Emanuel, Fair Trade USA Götz Schroth, Rainforest Alliance

43 Presentation by: Jerwin Tholen, KPMG Advisory N.V. The Path Forward for Certification Presentation WCF meeting 15 October, 2014

44 The voluntary sustainability standards (VSS) deserve credit for their role as a driving force in mainstreaming sustainability Standards Farmer level and chain of custody standards launched Scheme identity with target impacts Global recognition Mars, Hershey, Ferrero, Natra and others have committed to 100% sustainable cocoa by 2020 using Utz, Rainforest Alliance and Fairtrade Certified chocolate across the world (e.g. Utz on products in 108 countries) Scaling up Niche to 20% of certified cocoa in a few years # auditors increased Funds acquired for implementation / farmer development Sources: KPMG (2013) Raising the Bars, KPMG (2014) A Taste of the Future Presentation The Path Forward for certification October 15th, 2014

45 Effects mentioned in articles/#of articles Literature also cites more positive than negative effects of certification Most mentioned: Access to education and training, Farmer economy, Local natural environment. Positive effect No effect Negative effect Positive effect No effect Negative effect Positive effect No effect Negative effect Coffee Cocoa Cotton Access to education & training Working conditions Gender equality Farmer economy Local natural environment Group level Sources: KPMG (2013) Improving smallholder livelihoods: Effectiveness of certification in coffee, cocoa and cotton Presentation The Path Forward for certification October 15th, 2014

46 Key mechanisms of certification should impact farmer income Price ΔPrice (premium) Base yield ΔVolume (GAP, Planting material, Fertilizer) Volume Sources: KPMG (2011) Sustainable Cocoa Fund Study Cost/benefit analysis of cocoa certification in West-Africa, KPMG (2012) Advantages and disadvantages of coca certification Presentation The Path Forward for certification October 15th, 2014

47 ..however, there are huge challenges ahead in order to contribute to true sector sustainability Standards Prove yield increase and community impact (basic education, child labor prevention, women s empowerment) Improve (transparency on) internal control systems, premium distribution Show advantages over proprietary sustainability programs / national standards Global recognition Sell certified products in Brazil, China, Colombia, India, Russia, South Africa, Turkey and Vietnam (70% of worlds confectionary growth) Scaling up Decrease % unsold certified cocoa Find ways to include less profitable farmer segments Knowledge sharing good practises (pre-competitive) Presentation The Path Forward for certification October 15th, 2014

48 Thank you! Contact:

49 Cocoa Break

50 Perspectives on the Meeting Theme: Connecting Sustainability, Standards and Certifications Moderator: Bill Guyton, World Cocoa Foundation Panelists: Edouard N guessan, Le Conseil du Café-Cacao Jason Clay, World Wildlife Fund Nicko Debenham, Barry Callebaut Stephen Opuni, Ghana Cocoa Board

51 Day 1 # WCFPM

52 Reception & Dinner Reception: 6:00 6:45, Foyer Dinner: 7:00 9:00 pm, Top Floor Dining # WCFPM