Sustainable Procurement of Cocoa

Relevance to our business

The Fuji Oil Group’s industrial chocolate business uses cocoa-derived raw materials such as cocoa liquor,^*1 cocoa butter,^*2 and cocoa powder^*3 as key raw materials.
Small farmers make up the majority of producers in cocoa-producing regions such as Ghana, Côte d’Ivoire and Ecuador, giving rise to a complex web of social issues. These include poverty and, linked to this, the challenges of children’s education and child labor, climate change impacts, low productivity due to lack of knowledge and supplies, and the clearing of forests to make more room for farming. Solving these issues requires a multifaceted approach.
Moreover, the COVID-19 pandemic altered the business landscape, making future changes in cocoa demand harder to predict. This adds extra complexity to the supply chain issues we have a responsibility to address. Under these circumstances, we recognize that we can contribute to the sustainable procurement of cocoa by supporting cocoa farmers.

• *1 Cocoa liquor: A term used in chocolate/cocoa production factories; cocoa liquor is made by removing the shells of cacao beans and grinding the nibs (inside the cacao beans) into a smooth, liquid state.

  *2 Cocoa butter: Vegetable oil obtained by pressing cacao beans

  *3 Cocoa powder: Dry powder made by grinding what is left after the cocoa butter has been removed from the cacao beans

Basic approach

In August 2018, the Fuji Oil Group formulated the Responsible Cocoa Beans Sourcing Policy to deliver the joy of food through sustainable cocoa products long into the future. In 2020, we set medium- to long-term goals and KPIs to realize the sustainable procurement of cocoa beans.
Moving forward, we will work on raising farmers’ income, ending child labor, restoring forests and promoting agroforestry by planting trees and improving supply chain transparency, among other initiatives.

• Responsible Cocoa Beans Sourcing Policy (PDF, 79KB)

Management system

The Chief Strategy Officer (CSO) oversees initiatives in this area. The subcommittee on cocoa, which is part of the Global Sustainable Sourcing Committee implements measures following our roadmap for 2030.
The ESG Committee,^*1 an advisory body to the board of directors, has been monitoring the progress and results of initiatives as a material ESG issue.^*2 The ESG Committee reports insights to the board of directors for review.

• *1 Follow the link below to learn more about the ESG Committee.

  https://www.fujioilholdings.com/en/sustainability/approach/

• *2 Follow the link below to learn more about material ESG issues.

  https://www.fujioilholdings.com/en/sustainability/materiality

Goals / Results

Analysis

To implement the Responsible Cocoa Beans Sourcing Policy, we succeeded in setting new KPIs and setting a direction for our efforts over the next 10 years.
Blommer Chocolate Company (U.S.), which became a member of the Fuji Oil Group in 2019, played a major role in this. Even before the company joined our Group, it had begun planting trees through the World Cocoa Foundation's^*1 Cocoa & Forests Initiative,^*2 and this supported the smooth expansion of our initiatives.
In our new program to support cocoa farmers in Ghana, cooperation from local partners enabled us to identify farmers to support. Going forward, we will implement this program following a three-year plan.

• *1 Follow the link below to learn more about the World Cocoa Foundation.

  https://www.worldcocoafoundation.org/

• *2 Follow the link below to learn more about the Cocoa & Forests Initiative.

  https://www.worldcocoafoundation.org/press-release/cocoa-forests-initiative-reports-progress-despite-challenging-year/

Next step

Crucial elements of our initiatives for sustainable procurement of cocoa include helping farmers to become financially independent (by planting trees, providing instruction on agricultural techniques and other measures), providing educational opportunities to the children of farming families, and ending child labor. To address these issues, we set the following goals for FY2021.

• *1 We plan to expand the program by adding 1,100 families more to the 1,250 families that received support in FY2020 (2,350 families cumulative).

  *2 Good Agricultural Practices

Solution-based approaches to implementing the Responsible Cocoa Beans Sourcing Policy

Restoring forests by planting trees

The Fuji Oil Group will partner with the U.S. non-profit One Tree Planted to plant 100,000 shade trees of different varieties on cocoa plantations and surrounding areas in Ghana in 2021.This region has lost biodiversity due to widespread deforestation. Local communities and small farmers are also affected by an increased frequency of floods and droughts caused by rising greenhouse gas emissions. By distributing a variety of saplings to cocoa farmers and planting them in the region, we will help promote biodiversity and improve soil health. Cocoa farmers will also be able to earn a profit by selling the fruits and spices they harvest from the planted trees. Also known as agroforestry, this practice can contribute to better livelihoods for farmers.
Alongside these activities, Blommer Chocolate Company (U.S.) will plant trees and carry out other projects through the World Cocoa Foundation’s Cocoa & Forests Initiative.

Introducing CLMRS and providing educational opportunities to children

The Fuji Oil Group’s approach to ending child labor — a significant human rights issue in the cocoa industry — focuses on introducing the Child Labour Monitoring and Remediation System (CLMRS) and providing educational opportunities to children of farming households. The problem of child labor in Africa has a number of causal factors, including poverty, the challenges of sending children to school, and the fact that children are generally needed to help out on family farms, therefore assessing the number of child laborers in this region is difficult. The Group has been introducing the CLMRS as part of our community support program^*1 in Ghana and Côte d’Ivoire. With the CLMRS, we monitor each farming household to determine their family composition and track whether children of school age are attending school. When we identify a child that cannot go to school, we assess their circumstances and set up a forum in the community to talk about corrective measures. Blommer Chocolate Company (U.S.) also launched the L.I.F.T. Program,^*2 which is building elementary schools and providing educational materials in Côte d’Ivoire to provide children with education opportunities.

• *1 See the section “Community support program.”

  *2. L.I.F.T. stands for Livelihood, Infrastructure, Food and Technology.

CLMRS framework

Implementing a community support program

The Group is conducting a community support program in Ghana and Côte d’Ivoire to address child labor, deforestation and other issues surrounding cocoa. Our goal is to remedy various issues in our cocoa bean supply chain by offering direct assistance for farmers that participate in the program. These include the introduction of Good Agricultural Practices (GAP), providing shade tree saplings of different varieties, and offering assistance for ending child labor, such as raising awareness and conducting community-led collection of household information. In addition to our existing program and initiatives in producing regions, we take a multifaceted approach that includes participation in multi-stakeholder projects, reflecting input from our stakeholders. These include agroforestry for raising farmer’s income, managing the handling of fertilizers and agricultural chemicals, supporting the Living Income Differential (LID),^* conserving forests by planting trees, and improving children’s education and nutrition through the Jacobs Foundation.

• * A method of setting a minimum purchasing price on cocoa beans to raise the income levels of cocoa farmers.

Participation in the World Cocoa Foundation (WCF)

Fuji Oil Group is a member of the World Cocoa Foundation since 2012. The World Cocoa Foundation is a non-profit international membership organization whose vision is a sustainable and thriving cocoa sector ― where farmers prosper, cocoa-growing communities are empowered, human rights are respected, and the environment is conserved.
Blommer Chocolate Company (U.S.) is a founding member of the World Cocoa Foundation and currently holds a seat on the WCF Board. The company has demonstrated a leadership role through participation in the WCF flagship programs, African Cocoa Initiative, Cocoa Livelihoods Program, Cocoa Action and the Cocoa and Forests Initiative. In response to the challenge of COVID-19, Blommer joined other industry members in financially contributing to a WCF fund that will provide needed education and supplies to cocoa growing communities in their fight against the virus.

Handling of certified cocoa-derived raw materials

Fair Trade

Industrial Food Services (Australia), Fuji Oil Europe (Belgium) and Blommer Chocolate Company (U.S.) obtained the Fairtrade certification, which aims at promoting sustainable development of small producers and workers in developing countries. The Fuji Oil Group produces and sells products made from Fairtrade-certified raw materials according to customer requests.