Progress Report on Investor Expectations and Corporate Benchmark in Cocoa

A staggering number of over 100 million child labourers are working in agriculture worldwide. Two million of those are found in the worlds’ two top producing countries of cocoa, Côte d’Ivoire and Ghana.

GES has engaged the cocoa industry for many years to increase its effort in tackling the issue of child labour. As a part of its long-term engagement, GES published its second public report on the issue, including investor expectations and a corporate benchmark of leading cocoa and chocolate companies.

Last year’s report, which was first of its kind investor report on the topic, was backed by more than 60 institutional investors world-wide supporting GES’ call for increased efforts by the cocoa industry to combat widespread child labour in its supply chain.

One year ahead we present our follow-up report. The same expectations still stand. This new report includes an updated benchmark and further reflections on key sector developments during the last year, in relation to combatting child labour.

Key findings from the report point to a conclusion that there have been considerable developments in the roll-out of child labour monitoring and remediation systems (CLMRS) in cocoa-growing communities in the past year and that they have become a mainstream practice among larger cocoa and chocolate companies.

In terms of tackling poverty, a root cause of child labour, the report presents that the current status of investor efforts and expectations to move towards living incomes for cocoa-growing farmers is rather mixed. Cocoa prices fell to very low levels towards the end of 2016 and all through 2017 and while prices have recovered slightly this year, they remain low. Although the reality for cocoa-growing farmers is challenging, there is a lot more recognition of and efforts to promote a living income from the industry and others, compared to previous years.

Recent studies have provided important data on actual levels of farmer income and living income in cocoa-growing communities and one study points to actual income levels in Côte d’Ivoire being at an average 37 per cent of a living incom. More studies are underway and focus on the issue from the cocoa industry has notably increased. Investors are expecting concrete measures to be taken, and for child labour in cocoa to decrease and ultimately be eliminated. A large-scale survey commissioned by the US Department of Labor, from 2015, showed the prevalence of two million child labourers in cocoa in Côte d’Ivoire and Ghana. In the upcoming harvest season 2018/19 the follow-up survey will be conducted and this will be the litmus test that shows if efforts from the cocoa industry and others have, in fact, been effective.

Download the report in PDF