Sweet: Chocolate goes climate-positive with carbon insetting

Patrick Fortyr
5 November 2015

People love chocolate. Last year’s global consumption of this delicious and timeless treat was approximately 8 million tonnes, as more and more people can afford it. In particular, demand is rising sharply in in the new middle classes of China and India. The chocolate industry is highly competitive with global players dominating the market. For small producers there is only one way to succeed: superior quality and a unique selling proposition. Consumers are willing to pay royally for grand cru premium single-origin, organic, infused dark chocolate harvested at full moon. Thus, developing a new unique selling point is no small feat.

Kakao_Panama

Photo by ©ForestFinance

One new and extremely interesting possibility is the promise that chocolate products are free of adverse environmental impacts. That is, climate-neutral or even climate-positive chocolate. But how is this done and is it actually true?

German-based ForestFinest Consulting, a well-renowned cocoa and land-use expert, guided a small-scale chocolate manufacturer to achieving a climate-positive product. The premise of this idea is the transformation of the cocoa fields and surrounding area into a carbon-certified climate-protection project. Thus the following steps were carried out successfully:

  1. Feasibility Study. Starting with a feasibility study, several implementation possibilities were discovered revealing realizable agroforestry systems and different certification schemes that fitted the needs of the manufacturer.
  2. Land-use project implementation. The chocolate manufacturer decided on the most suitable option and mandated the land-use consulting with appropriate implementation and monitoring. The changed land-use concept, comprising the planting of additional shade trees and other measures, increased the carbon sequestration of the cocoa fields and surrounding area.
  3. Carbon certification. The suggested Gold Standard certification was passed and offered an opportunity to use the carbon credits for the company’s own chocolate production.
  4. Carbon Footprint calculation. Calculation of the sequestered carbon as well as a product carbon footprint calculation of the chocolate established the basis for comparison.
  5. Green communication guideline. As the sequestered carbon exceeded (production harvesting, transportation, packaging, and manufacturing) emissions, the chocolate manufacturer was able to produce and communicate climate-positive chocolate.
Insetting - Offsetting

©ForestFinance

This entire process is called insetting. It allows the company to avoid buying voluntary emission reductions (VERs) from external sources for offsetting purposes. Instead, the chocolate manufacturer improves and secures their supply chain by implementing climate-protection measures internally. Apart from the high quality of the chocolate, the insetting process allowed the development of a new and unique selling proposition. Promoting the chocolate as climate-positive due to carbon sequestration within the supply chain presents a new marketing opportunity. In addition, the surplus of generated carbon credits allowed the company to sell carbon credits on the voluntary market, generating additional revenue.

Wald_Panama

Photo by ©ForestFinance

In this project, the sales and marketing of carbon credits was facilitated by ForestFinest Consulting. Beside the economic benefits, follow-up research and monitoring revealed improvements in soil quality and an increase of biodiversity in the project area. Engagement of local stakeholders, especially job creation for the local people, ensured the project’s success and sustainability. This example reveals that insetting strategies support several aspects of the newly developed global goals and sends a message to the upcoming COP21 in Paris. The creation of socioeconomic and environmental value is possible in a sustainable, climate-friendly way. And it is happening despite indecisive politics!

An insetting process aims to optimize value chains by creating and valuing ecosystem services, such as carbon sequestration. It benefits business by creating additional revenue streams, increasing the resilience of value chains, and developing new corporate social responsibility strategies and communications.

Key messages:

  • Insetting allows the inclusion of climate-protection measures within the supply chain with the additional possibility of making agricultural products climate-positive.
  • Premium positioning of product and/or brand.
  • Improvement of supply-chain efficiency and possible generation of additional revenue.

For further information on insetting and land-use related topics please contact ForestFinest Consulting: info@forestfinest-consulting.com

About the author

PatrickPatrick Fortyr has a master’s degree in geography (M.Sc.) with a focus set on the several dimensions of climate change. He started working for CO2OL in 2013 and is responsible for insetting processes, carbon footprinting and carbon markets.