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APPENDIXPAGE 48 INTRODUCTION ENCOURAGING WAY FORWARD, CONCLUSION APPENDIX 4 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 5 INTRODUCTION

LETTER FROM

Dirk Van de Put, DIRK VANChief DE Executive Officer,PUT Mondelēz International At Mondelēz International, we’re passionate about chocolate. With brands like Cocoa Life was built on a bold ambition to ultimately Cadbury Dairy Milk, Milka, support our global chocolate business and we’ve Côte d’Or and Lacta, that’s no surprise. Millions of worked relentlessly to build the foundation to meet people around the world buy our beloved chocolate that goal. Through the combined efforts of our brands each year, and that’s why it’s so important dedicated teams at Mondelēz International, in close that our products are made the right way. partnership with farmers, communities, and other Cocoa is the essence of our chocolate, and an stakeholders around the world, we’re accelerating important part of our business. With demand for our program. By 2025, all the cocoa for all our chocolate rising, to drive our business growth we chocolate will be sustainably sourced through Cocoa need to secure a sustainable supply of its essential Life. This is a huge milestone for our program, our ingredient; we need a thriving cocoa sector. This team and our company. requires sustainably produced and forest-friendly By investing, supporting and believing in Cocoa ALL OUR cocoa, now and in the future. Only by tackling Life, we are at the forefront of the fight against the complex challenges farmers face can we climate change. Empowering farmers and their secure cocoa farming for generations to come. communities to become more productive and That’s where Cocoa Life, our signature cocoa climate-resilient is enabling us to secure sustainable sustainability program, comes in. supplies of raw materials for the future. That’s one In April 2019, I was fortunate to travel to Ghana of the many reasons I’m so proud of what our team CHOCOLATE and Côte d’Ivoire to visit some of the farmers and has achieved. We know we can’t address climate stakeholders we partner with as part of Cocoa change alone. But we are focused and committed WILL SOURCE THEIR COCOA FROM Life. I saw first-hand how we are working every to playing our part to grow opportunities for BRANDS day to improve farming practices, create thriving farmers, their communities and our planet to communities, and empower farmers to achieve thrive. And crucially, it moves us a step closer sustainable livelihoods and become more resilient to meeting our goal to build positive impact for to climate change. people and our planet. Since we first launched Cocoa Life in 2012, we At Mondelēz International, our Purpose is to have equipped hundreds of thousands of farmers empower people to snack right, and because we BY to grow more cocoa on their farms, empowered believe that Cocoa Life’s approach is the right more than 1,400 communities to drive their own one for farmers and consumers, we’re proud to COCOA LIFE development, and scaled up our approach to accelerate our program and build on the impact 2025 source 43% of our chocolate through the program. we’ve created. INTRODUCTION ENCOURAGING WAY FORWARD, CONCLUSION APPENDIX 6 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 7

CONNECTIONS ARE KEY TO A THRIVING FUTURE FOR COCOA

Christine Montenegro McGrath, Vice President and Chief of Global Impact, Sustainability, and Well-being, Mondelēz International and Vice-Chair, World Cocoa Foundation I AM PASSIONATE ABOUT COCOA Our consumers care about the provenance of our ingredients and the welfare of the farmers who LIFE BECAUSE OF THE CRITICAL grow them – making this connection crucial to our A HOLISTIC APPROACH TO COMMITMENT TO A CONNECTIONS IT MAKES. business. That’s why we’re accelerating our impact TACKLING ROOT CAUSES SECTOR-WIDE STRATEGY IN and embedding Cocoa Life across all our brands, so As a sector, we’ll never sustain our impact if every CONNECTIONS BETWEEN THE that consumers across the world can be confident time we fix one problem we create another. That’s ORDERWe can’t doTO it alone.AFFECT Only CHANGEa sector-wide, long-term FARMERS WHO GROW OUR that the brands they love are made the right way. why, from the beginning, we designed an integrated strategy, with coordinated action by industry “ approach focused on getting to the root of the players, producing and consuming governments, Cocoa Life is particularly close to my heart complex challenges cocoa farmers face. and civil society will lead to lasting change. ESSENTIAL INGREDIENT, COCOA, AND because we built it from the ground up, starting THE CONSUMERS WHO CHOOSE OUR with an ambition to create something that had Cocoa Life creates connections. On the The on-the-ground action we’ve been taking has never been done before: a program that is holistic ground, we use connections to drive change. been crucial to driving change, but the challenges CHOCOLATE BRANDS; BETWEEN OUR by design, has partnership at its core, and is For instance, by empowering women in cocoa the sector faces – from deforestation to poverty COMPANY’S MISSION, SNACKING committed to learning by doing. So it’s humbling farming communities we also help keep children in and child labor – are sector-wide. Our learning for me when we achieve accolades from experts schools, encourage climate-positive choices, and reaffirms that we will only be successful if different MADE RIGHT, AND THE VERY in their field such as Save the Children, Sedex, create additional sources of income that can be players join forces and collaborate to create the BEGINNING OF OUR SUPPLY CHAIN; Unilever and the Food and Drink Federation. invested back into farms. Everything is connected. right environment for change. Our results show that the holistic approach is AND BETWEEN FARMERS’ SUCCESS What makes me especially proud of the results right, and we urge more players to adopt it. Cocoa is the essence of the chocolate we all love, shared in this report is that they give me the vital to our business, our industry, and the livelihoods AND DOING GOOD BUSINESS. confidence that we are on the right path to growing Critically, if cocoa farming is to be a business of of the men and women who grow our cocoa. a thriving cocoa sector. What we have learned also choice, farmers need to be able to connect cocoa Transparency is core to Cocoa Life, which is why my tells me that we’re just scratching the surface of growing to commercial success. We all share the mission is for the learnings in this report to mobilize the sector’s potential. I know that for a thriving responsibility for helping make this a reality. others to join us in creating a movement for lasting cocoa sector tomorrow we have to make changes change to ensure that cocoa is made right. today, and Cocoa Life’s results so far tell us what that means: ENCOURAGING WAY FORWARD, COCOA LIFE ANNUAL REPORT 2018 INTRODUCTION CONCLUSION APPENDIX 8 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 9 ENCOURAGING RESULTS

ON THE JOURNEY TO Just as the Cadbury Our size and our focus on improving the whole picture SUSTAINABLEbrothers did over 100 allowsCOCOA us to create positive change at scale. The data years ago, Cocoa Life is we are sharing on our reach and program scope in our on the ground, working origin countries gives a glimpse into this. Meanwhile, hand-in-hand with our the breadth of our partnerships underscores the NGO and supply chain action-oriented alliances we’re forming. partners and the men As Amartya Sen’s exploration of international Cathy Pieters, Global and women who grow our development, Development as Freedom, explains, Director, Cocoa Life cocoa. We’re on a mission working on the factors behind the symptoms is to transform the sector and ensure a sustainable crucial in order to make a real difference – rather than supply of cocoa for chocolate lovers today and making surface improvements. We are so proud to see in the future. We think our experience gives us a quantitative and qualitative evidence of the great work unique perspective. Our holistic approach starts we’re doing through Cocoa Life. It’s inspiring to see the by tackling the root causes of the challenges cocoa process of empowerment unfold on the ground. farmers face. We’re seeing encouraging results to support this approach. In the section below, we Our latest data set focusing on issues such as share our four key global observations, learnings women’s empowerment, income diversification, and opportunities we are taking on to increase child protection, and community action planning the impact of our interventions. We invite you to is particularly powerful. It demonstrates how COCOA LIFE’S APPROACH explore these results with us and identify learnings community-owned actions, enable change – as that are relevant for our sector and beyond. long as these actions work in tandem with national LOOKS AT DISRUPTIVE structures for sustainability. At Cocoa Life, an integrated approach has guided YET INNOVATIVE WAYS our activities since the beginning. The challenges The strength of our community-owned actions facing cocoa farmers are too interwoven and is shown in data captured by Ipsos. This includes OF INVOLVING THE LOCAL complex to be solved by just one organization, or the Community Development Committee and “ by focusing on one challenge area alone. We’ve community member interviews, quantitative evidence PEOPLE TO CHANGE THEIR MINDSET AND seen the knock-on effects of historic attempts on community-owned funding for community to improve one area in isolation, leading to other projects, and progress data on Community Action ATTITUDES AS WELL AS TO IMPROVE areas suffering. For instance, in the mid-1970s Plan and Community Development Committee public policy designed to capitalize on the activation. THEIR CAPACITY TO GROW THEIR COCOA cocoa boom in Côte d’Ivoire ultimately drove We hope you find this chapter outlining what we’ve 1 BUSINESSES. THIS APPROACH IMPROVES deforestation. A similar case was seen recently learned about impact informative and enlightening. 2 with vanilla in Madagascar. It’s very important to us at Cocoa Life: only by LIVELIHOODS AND EMPOWERS COCOA evaluating our impact can we continually assess our 1 Ruf, François. (2017). The myth of zero-deforestation cocoa in Côte d’Ivoire. work and course-correct where needed, and by doing GROWING COMMUNITIES.” ETFRN NEWS. 58. https://www.researchgate.net/publication/318084256_The_ so boost the livelihoods of our farmers, ensure the myth_of_zero-deforestation_cocoa_in_Cote_d'Ivoire 2 Nancy Kacungira (2018). Fighting the case of vanilla thieves in Madagascar. sustainability of our cocoa, and grow opportunities. Jane Nyambura, Regional Manager Africa, BBC. https://www.bbc.co.uk/news/resources/idt-sh/madagascar_vanillla Ethical Tea Partnership, and Cocoa Life Advisor INTRODUCTION ENCOURAGING WAY FORWARD, CONCLUSION APPENDIX 10 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 11 11

FARMERS38,417 REACHED COMMUNITIES447

FARMERS37,654 REACHED COMMUNITIES296 HIGHLIGHTS FROM FARMERS40,769 REACHED COMMUNITIES676 GHANA Yaa Peprah Amekudzi, Head of Cocoa Life, Ghana OUR ORIGINS CÔTE D'IVOIRE “The Cocoa Life program INDONESIA Andi Sitti Asmayanti, Mbalo Ndiaye, celebrated 10 years in Ghana 935 24 Head of Cocoa Life, Indonesia FARMERS REACHED COMMUNITIES Head of Cocoa Life, in 2018. Over the last decade we Côte d'Ivoire have transformed the communities “Cocoa Life enables farmers to “The Cocoa Life program has been we work in and continue to create participate in village planning and DOMINICAN REPUBLIC instrumental in leading and positive impact in the cocoa sector development meetings, integrated David Preece, developing the Cocoa & Forest at community and policy level.” with existing Development Planning Head of Cocoa Life, Initiative. Through our concrete actions Deliberations (Musrembang). Through Dominican Republic on the ground, we were able to inspire the the Cocoa Life Community Action “The self-run savings and loan scheme wider cocoa industry to design a long-term Plan we have increased the established in Cocoa Life communities and strategy for addressing deforestation number of community members managed by community members enables across the entire cocoa supply chain.” involved in Musrembang and them to better manage finances and development planning capacity plan for the future. Bringing people within the community.” together in this way shows how relatively small actions can have a significant impact on a community.”

FARMERS25,000 REACHED COMMUNITIES30 FARMERS100 REACHED COMMUNITIES3

INDIA BRAZIL KP Magudapathy, Jens Hammer, Head of Cocoa Life, India Head of Cocoa Life, Brazil “We have a great opportunity to connect Cocoa "Cocoa Life continues to drive economic, social and environmental benefits for cocoa farming Life in Brazil to consumers in a meaningful way communities, driving positive change in India. Cocoa Life’s work in remote locations and and bring them closer to all the great work we marginalized communities has provided opportunities for the farmers: working with them to offset do on the ground. The program is helping carbon emissions from our factories by planting cocoa trees. We are proud that our commitment families thrive by offering a brighter to the environment has been recognized, and our India Business Unit has been granted the E&Y future for their communities.” Certification forCarbon Positive, Water Positive and Zero Waste to Landfill.” INTRODUCTION ENCOURAGING WAY FORWARD, CONCLUSION APPENDIX 12 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 13

COCOA LIFE We source of our chocolate through FARMERS142,875 COMMUNITIES1,476 PROGRESS 43% COCOA LIFE IN NUMBERS

COCOA FARMING AS A Cocoa seedlings Cocoa-farming Youth trained on 8,428,682distributed demonstration764 cocoa-related9,893 enterprises WorkingPROSPEROUS hand-in-hand with BUSINESS cocoa plots farmers to make cocoa farming a business of choice. We help farmers become more Nurseries Farmers trained, coached or 86 having a142,875 farm development plan productive, so they can increase their on Good Agricultural Practices income from cocoa.

Communities with a Child Labor Monitoring Village Savings and Loan Community members Community and Remediation499 System or equivalent Associations1,817 operational involved18,678 in additional EMPOWERED AND INCLUSIVE Communities with members50,540 trained on 1,355 Income Generating financial literacy a CODEC and Activities EmpoweringCOCOA the COMMUNITIES men, women and youth Community Action Plan activated Communities with Child VSLAs linked to within cocoa communities to lead their own Protection Committees finance49 institutions Community 619 members74,318 trained development and improve their livelihoods on gender awareness Community through entrepreneurship. CAP projects 29,297 1,019 Community members and Community members who members trained completed in farmers116,004 educated on issues of 70,921 on business communities participate in VSLAs, of which child labor and forced child labor more than 70% are women management

Community Farms mapped FORESTS ARE 114,380members and and93,416 monitored farmers trained on ProtectingCONSERVED and restoring AND the land RESTORED and Good Environmental forests where cocoa is grown, together Practices with the farmers and communities.

Economic shade 1,232,059trees distributed INTRODUCTION ENCOURAGING WAY FORWARD, CONCLUSION APPENDIX 14 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 15

As the third-party evaluator for Mondelēz IMPACT IMPACT IMPACT IMPACT International's Cocoa Life program, Ipsos LEARNING 1: LEARNING 2: LEARNING 3: LEARNING 4: has witnessed the evolution of the program’s Cocoa yield is More resilient Growing Cocoa Life impact on the ground in Côte d’Ivoire, Ghana, continuously communities new income farms avoid Indonesia, and the Dominican Republic over improving can steer generating priority the past three years. Cocoa Life’s localized their own opportunities protected areas approach to delivering program components development increases and forests across and within its cocoa-growing origins income, but means that impact must be considered through LEARNING AREAS MEASURING “ not fast enough a context-driven lens. to move all farmers out of The strength of Cocoa Life’s partnerships poverty OUR IMPACT in each origin is essential to amplifying the KPIs: sustainability benefits of the program, which Manuel Kiewisch, can be quite significant for communities and Global Cocoa Life Net income Monitoring and individuals. Life skills training and community from cocoa Evaluation, Verification, capacity building activities in Indonesia 1 and Learning Manager inspired women in the Lampung, Sumatra region to band together to produce, package, Cocoa “No great feat can be achieved alone”. This productivity and sell snacks made from cocoa and food 2 mantra guides Cocoa Life’s work with farmers crops. Cocoa Life’s work with women in this Increase in women’s and communities, and also applies to this report. community was the catalyst for a diverse series of participation in Evaluating how Cocoa Life impacts lives on the impacts, directly touching on increased farmer 3 decision-making process ground is both important and challenging. household income in the short term and leading It would not be possible without the partners to increased economic resilience in the long term, Increase capacity in the who commit to maintaining a rigorous and and rippling into other socio-economic areas. This 4 community to plan and independent perspective: supplemental income was often critical to meet advocate for their own and increase their children’s education expenses. social development Ipsos is an international research organization that surveys and interviews a representative Meanwhile, professionalization and business Net income sample of Cocoa Life farmers in every Cocoa skills lessons encouraged female entrepreneurs from sources to seek innovative means of selling their goods, 5 other than cocoa Life origin country every year. Ipsos acts as a magnifying glass; examining the program, whilst including eCommerce channels. This would ultimately formalize their inclusion in financial Cocoa farmers’ remaining independent of it, pointing us towards services. We often see similar stories as a result reduced vulnerability opportunities to increase our impact. 6 to external shocks of Cocoa Life’s important sustainability work. Flocert is an international certification body that Ipsos is proud to contribute to Cocoa Life’s Reduction in child labor carefully records all business transactions right program learning and development.” 7 and forced child labor along our supply chain to improve transparency and fairness. It continuously collects information Elisa Bernd, Vice President, and Leila Scott, Director, Ipsos Increase in career from our direct suppliers and farmer organizations opportunities for to verify the flow of cocoa from Cocoa Life 8 youth in cocoa sector families living in vulnerable situations. It is highly communities into our supply chain, and the diverse and impacted by issues that can’t be solved benefits that flow from Cocoa Life back to the Helping future farming by any one single actor. This report offers a small generations through cocoa farmers. 9 sustainable natural glimpse into the complexity of the challenges resources use on farm Ipsos and Flocert are two links in a long chain of at hand. We encourage everyone to browse the actors: suppliers, implementing NGOs, business information available in this report and contact us if Increase in conversation units, and cross-industry partnership platforms you want to know more. Addressing the challenges 10 of forests and such as CocoaAction, that help us understand the starts with understanding and taking responsibility maintenance of reality on the ground. Farming life in the origins for our impact, and we thank everyone for playing ecosystems is made up of hundreds of thousands of farming their part in creating lasting change. INTRODUCTION ENCOURAGING WAY FORWARD, CONCLUSION APPENDIX 16 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 17 KPI 1 KPI 2 KPI 6 KPI 8 Net income Cocoa Cocoa farmers’ Increase in career from cocoa productivity reduced opportunities vulnerability to for youth in external shocks cocoa sector

IMPACT LEARNING ONE An improvement in farm efficiency is usually accompanied by a positive change in farmer behavior. Cocoa farmers who have spent three years with Cocoa Life and taken part in training modules tend to apply Good Agricultural Practices – such as weeding, pruning, and shade COCOA YIELD IS management – more diligently, as shown in the diagram below. The effect of an optimized Good Agricultural Practices scheme on farm efficiency Our results show that as we help cocoa farms Life farms in similar circumstances; for a recent has been confirmed by Mondelēz’s research and CONTINUOUSLY IMPROVING development project: ‘Targeted Good Agricultural become more efficient, their yield increases. This crop year in Ghana, we found that Cocoa Life is an important development, as farms that can trees produced on average 15% more fruit than Practices.’ The applied research found that a do more with less land are in fact able to free land trees on non-Cocoa Life farms. This is shown in high-performing, targeted scheme could even to be used for other income-generating activities, the graph below. The production and subsequent raise farm productivity to 3000 kg/hectare (ha) helping make cocoa farming a prosperous ripening of the fruits is a good indicator of the in individual cases (average results are about business. Results indicate that Cocoa Life farms health of the cocoa trees and for the yield that 1225 kg/ha per year) over two years and could are typically more productive than non-Cocoa the farmer can expect from them. double farmers’ return on investment from their land. We know that a significant subset of Cocoa Life farms are ready to support an optimized Good Agricultural Practices scheme. GHANA MAIN CROP TREE POD COUNT PERFORMANCE TYPICAL OF RECENT YEARS’ CHANGE IN THE APPLICATION WEEDING OF GOOD GHANA INDONESIA

Fruits on trees Fruits AGRICULTURAL +29% +23% PRACTICES OVER THREE YEARS IN COCOA LIFE PRUNING Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar GHANA INDONESIA +42% +59% Non-Cocoa Life Cocoa Life

PLANTING OF SHADE AND NON-COCOA TREES GHANA All Ghana and INDONESIA Indonesia figures taken +12.5% +2.5% from 2015-2017/2018 INTRODUCTION ENCOURAGING WAY FORWARD, CONCLUSION APPENDIX 18 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 19

THE TRAINING HAS BEEN VERY BENEFICIAL TO US BECAUSE IT HAS HELPED US GROW Acknowledging the diversity of cocoa farming as a rework their farming approach. Encouragingly, we business has enabled Cocoa Life to classify farmers found that Cocoa Life farmers are increasingly “MORE COCOA TREES. BEFORE I in groups, in order to create tailored responses to investing in their future: in 2017, 52% of Cocoa their needs, as well as better measure and improve Life farmers in Côte d’Ivoire undertook some WOULDN’T NURSE THE TREES, AND the impact the program has on their farms. level of farm rehabilitation, and boosted their MY COCOA WASN’T BOOMING. For example, in Ghana we found that the group resilience by integrating non-cocoa trees and of farmers that initially had the lowest farm complementary crops into their farms. THE EDUCATION ON NESTLING efficiency improved by about 93% over three We also found that methods that make cocoa years. Meanwhile, the group with the highest farming a prosperous business for one farmer SEEDLINGS HAS REALLY HELPED performance at the start began to rehabilitate might not work for another. For instance, even and diversify their cocoa farms – an activity that though older and younger Cocoa Life farmers ME GROW MORE COCOA.” is necessary in order for farmers to continue depend equally on farming for their livelihoods, improving farm efficiency long term – leading to we found that older Cocoa Life farmers are more Farmer, Ahodwo Nyamebekyere, a temporary decrease in their cocoa production reluctant to try new farming techniques and are Ahafo Ano North, Ashanti, Ghana (-38%). This decrease will continue for a few more less able to invest in their own labor compared to years until the new crops bear fruit. Current cocoa younger farmers. To add to this, the global average production, farm potential, and overall business age of Cocoa Life farmers is 53 years. This points resilience all exist in a delicate balance, and benefit to the importance of encouraging young farmers from individual attention. to see cocoa farming as a business of choice as part To aid in this decision, we increasingly promote of a sector-wide strategy for lasting change. individual farm development planning which aligns farmer's interests with the potential of their farm Through our program, we have learned that and household to ensure that short-term windfalls farm efficiency is best improved through a are accounted for through diversified income, until tailored training program. We can do more the farm can reach higher levels of productivity. in the future by concentrating our efforts A holistic approach is key to addressing the on providing the right support for the right root causes of unsustainable farming. While a farmer, based on shared understanding high percentage increase in farm efficiency is between the cocoa farmer and Cocoa Life. a step in the right direction, it is not the end of Efficient farming frees land to be used for the intervention needed. For example, while we other means, which addresses one driver of have seen farmers in the deforestation and allows for complementary IN 2017 lowest-performing group in diversification efforts alongside cocoa to Ghana improve their cocoa improve farmer resilience and livelihoods. productivity from 100 kg/ ha to 194 kg/ha per year, this We have also learned that efficiency gains in is still not enough to support cocoa are limited, and even steep gains will OF COCOA LIFE the livelihoods of farming not provide enough support for some farming FARMERS IN CÔTE families operating on small families to live exclusively from cocoa. 52%D'IVOIRE UNDERTOOK landholdings. Creating lasting change requires us to address SOME LEVEL OF FARM For some farming families, root causes from all perspectives, through REHABILITATION, the best support will be a systemic and holistic strategy – of which helping them to identify cocoa is a key part. AND BOOSTED supplementary business THEIR RESILIENCE paths, or to completely INTRODUCTION ENCOURAGING WAY FORWARD, CONCLUSION APPENDIX 20 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 21 KPI 3 KPI 4 KPI 6 KPI 7 Increase in Increase capacity Cocoa farmers’ Reduction in women’s in the community reduced child labor and participation in to plan and vulnerability to forced child labor decision-making advocate for external shocks process their own social development IMPACT LEARNING TWO Whilst competition is a successful indicator of already led communities, together with Cocoa Life, empowered communities, we recognize that to explore innovative funding mechanisms so that limited government funding is also a challenge, they can drive new development projects. These which is why we are stepping up our support to mechanisms are shown in the overview below. MORE RESILIENT unlock more funding channels. This process has OVERVIEW OF PRIORITIES SET OUT IN COMMUNITY COMMUNITIES CAN STEER ACTION PLANS AND FUNDING APPROACHES TOP 3 COMMUNITY TOP 3 COMMUNITY TOP 3 MOST COMMON ACTION PLAN PROJECTS THAT FUNDING MECHANISMS PRIORITIES ATTRACTED FUNDING (incl. joined funding) THEIR OWN DEVELOPMENTIn Ghana we see an example of how empowering communities to take on their own development CocoaCOMMUNITY farming communities ACTION can PLANNING become drivers of 1. Education infrastructure 1. Access to safe drinking water 1. Government Authorities change. Through the use of planning and advocacy agenda can tackle the root causes of the complex (40% of communities (31% of communities attracted (32%) tools, our communities have been able to attract the challenges cocoa farming communities face. selected as ‘most important’) funding for project) There, implementing partners such as the Institute 2. NGO with/or without funding and resources needed for them to develop. In 3 2. Access to safe drinking water 2. Education infrastructure Support from Cocoa Life the process, they have taken ownership for steering for Democratic Governance (IDEG) mobilized (19% of communities selected (20% of communities attracted (18%) their own development — an important step because women’s groups to lobby the government to focus as ‘most important’) funding for project) more on rural development issues. Through our 3. Village fund sector change will only be sustained if local actors feel 3. Health facilities 3. Transport/ road infrastructure (16%) evaluation we’ve seen cases where the program’s empowered to do so. CÔTE D'IVOIRE (15% of communities selected (19% of communities attracted community empowerment initiatives have been as ‘most important’) funding for project) By 2019, 92% (1,355) of all 1,476 Cocoa Life farming so successful that they have created competition communities have developed Community Action among communities for government funding. Plans (CAP), 1. Transport/ road infrastructure 1. Education infrastructure 1. NGO with/or without BY 2019, which enable (24% of communities selected (30% of communities attracted Support from Cocoa Life them to advocate as ‘most important’) funding for project) (68%) for their own 2. Education infrastructure 2. Access to safe drinking water 2. Village fund OF ALL 1,476 COCOA LIFE development and EVERY COMMUNITY LOOKS (17% of communities selected (23% of communities attracted (61%) as ‘most important’) funding for project) FARMING COMMUNITIES secure funding TO THE DISTRICT ASSEMBLY GHANA 3. Government Authorities HAVE DEVELOPED92% to achieve their [GOVERNMENT AUTHORITIES] 3. Access to safe drinking water 3. Health facilities (41%) priorities. In Côte (16% of communities selected (9% of communities attracted COMMUNITY ACTION PLANS d'Ivoire, 83% AND IF I TELL YOU THE NUMBER as ‘most important’) funding for project) of community leaders that had taken part in community action OF LETTERS WE HAVE WRITTEN “ 1. Transport/ road infrastructure 1. Transport/ road infrastructure 1. Government Authorities planning successfully elevated projects beyond their TO THE DISTRICT ASSEMBLY (60% of communities selected (80% of communities attracted (65%) local community structures, integrating them into as ‘most important’) funding for project) official village or district development plans. And YOU WILL BE AMAZED.” 2. Village fund 2. Access to Agricultural 2. Education infrastructure (26%) 88% of cocoa farmers agreed or strongly agreed Extension Service (67% of communities attracted 3. NGO with/or without that CAPs are actively contributing to improving Village leader from Manfia (13% of communities selected funding for project) Support from Cocoa Life community in Ghana as ‘most important’) conditions in their communities. 3. Health facilities (3%)

INDONESIA 3. Access to safe drinking water (53% of communities attracted (7% of communities selected funding for project) as ‘most important’)

3 The “Institute for Democratic Governance” (IDEG) implements since November 2015 the “Civic Empowerment of Cocoa Communities” project with remarkable success in training local leadership. INTRODUCTION ENCOURAGING WAY FORWARD, CONCLUSION APPENDIX 22 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 23

As a key element of our holistic approach, CAPs SAVINGS AND LOAN GROUP encourage inclusive communities by enabling more MEMBERS CONTRIBUTE AND voices to be heard. For instance, women’s and DURING COMMUNITY MEETINGS, young-adult groups are included in their design. WOMEN'S GROUPS WERE THE LOAN MONEY TO THEMSELVES We do this because as well as playing a crucial role in households and communities, these groups are STRONGEST ADVOCATES FOR UNTIL THE END OF THE typically marginalized and not present in decision “ making processes, despite being a major part of YEAR, THEN THEY SHARE IT the cocoa sector’s labor force. As a result of the program we’ve seen communities AND WITH THE INTEREST. IN ONE become more inclusive. In Ghana, for example, in 2018, 47% of community leaders changed COMMUNITY, I TALKED TO their behavior and made a conscious effort to THREE LADIES WHO WERE involve women’s groups in official community HEALTH planning meetings, whilst 32% also chose to involve VERY HAPPY WITH THE young-adult groups. AMOUNT OF MONEY THEY EDUCATIONImproving the conditions under which cocoa HEALTHA holistic approach AND EDUCATION is crucial for sustained is farmed is bigger than one cocoa farm, HAD SAVED. THE LOANS HELP SAVINGSMaking cocoa AND farming LOAN a prosperous GROUPS business also long-term change. For instance, we found that community, country or even the entire cocoa involves supporting farming families in increasing women’s groups play a key role in addressing the sector. We can’t do it alone. Only coordinated THEM TO PAY SCHOOL FEES their resilience and ability to withstand the impacts challenges cocoa growing faces, and therefore we action spanning local communities, national of crop seasonality, small land size, and changes capitalize on their power as change agents. During governments, civil society, and more will lead AND AVOID PETTY TRADERS. in weather patterns. Village Savings and Loan community meetings, women’s groups were the to lasting change and improve living conditions SOME TAKE THE LOAN AS Associations (VSLAs or savings and loan groups), strongest advocates for health and education in remote rural areas. Empowering local people which allow community members to actively save and related community infrastructure (table on page to advocate for this change through community SEED CAPITAL FOR THEIR take small loans, have proven a trusted institution 21 shows how as a result, education became a action planning has been an important step, high CAP and funding priority). We also saw for community members to cope with volatility. but we need more support. That’s why we are that empowered women took on a larger share TRADING. IT IS HELPING.” By 2019, with Cocoa Life’s support, 1,817 savings of household decision-making, which benefited stepping up our efforts to build innovative and loan groups have been established across all children, family well-being, and overall resilience. funding strategies and partnerships that allow District assembly member of our origin countries, with over 70,000 members Wahana Visi Indonesia found that in Indonesia local leaders to realize their projects. Sekyere East in Ashanti, Ghana (73% of members are women). Evaluation shows female participants of savings groups said their top that over three years in the Cocoa Life program, Savings and loan groups have proved two ambitions were: first, to “pay for education” cocoa farmers in Ghana managed to increase successful, especially when led by women (40% of respondents) and, second, to “pay for their total savings by about 24%. Our partner or youth groups as they allow those who are medical expenses” (28% of respondents). Wahana Visi Indonesia found that in Indonesia 87% typically excluded from decision making in of members have built a savings buffer to cover cocoa communities to take a lead in tackling essential needs such as food, clothing and education the root causes of the complex challenges for three months or more. Some savings and loan their communities face. In the future, Cocoa groups have been so popular that they are unable to Life plans to increase the reach and scale of take on additional members, creating the demand these groups, as well as to help connect cocoa and opportunity to scale and improve the program. communities with formal banking services such as credit, to widen and professionalize what these savings groups offer. INTRODUCTION ENCOURAGING WAY FORWARD, CONCLUSION APPENDIX 24 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 25

CASE STUDY:

“Before Cocoa Life partnered with Sikaboutou, A major accomplishment for us is the there were no organizations dedicated to construction of a health clinic co-funded by HOPE RETURNS community development. The community Cocoa Life, the Conseil du Café Cacao and comprised a number of hamlets, who shared the community. Even surrounding communities no common agenda. With the support of chose to help fund the clinic. Sikaboutou,TO a community SIKABOUTOU of Cocoa Life and CARE International, a local Our 24 savings groups provide opportunities for approximately 6,000 people, Community Development Committee was set entrepreneurship and solidarity, increasing our was one of the first four up, which worked through community leaders resilience as a farming community. Before the cocoa farming communities to develop a CAP. The CAP brought cohesion program, a few people met during periods of to join Cocoa Life in Côte and structure to the hamlets, and united them intense farming activities to help each other in d'Ivoire in 2013. This is the under a common goal. Sikaboutou is now about response to lack of labor. story of N'DRI N'Guessan to achieve the status of official village. Because of the work carried out under the CAP I now I cannot forget the benefits of improved PIERRE, a 48-year-old cooking stoves. Cocoa Life taught us a new cocoa farmer and President proudly say: if you want to understand Cocoa Life, come to Sikaboutou. technique for building stoves at no extra cost, of the local Community which has reduced the exposure of our mothers, Development Committee. Thanks to training, sensitization and crucially an women and girls to the smoke and heat of the ongoing presence on ground that has built trust fire, while reducing the amount of wood needed daily, behaviors in the community have evolved for cooking and therefore the burden of time positively and attitudes have changed. There is less in getting it. The next step is for these women gender-based violence; people trust community to be able to turn this technique into an income leadership; conflicts are better managed; and generating opportunity by building stoves in people come together to raise resources. These other households and communities. achievements have changed their lives. Beyond all these achievements, the most With the knowledge we have gained, the Committee even initiated the process for important for us is the strengthening of transforming Sikaboutou into an official village social cohesion in Sikaboutou. Looking – which is about to be completed. We have an at the configuration of the Community effective system that has enabled us to facilitate Development Committee and its access to birth certificates for 77 children. inclusivity, we work hand-in-hand with Because of the community development work, people from all social and ethnic groups. a private investor saw the opportunity to build Our cultural diversity is our strength and a high school, which has created a better future charm. Thank you Cocoa Life and CARE for children and is a great relief for their parents. International for helping restore the Thanks to what Cocoa Life has taught us about dignity of the cocoa farmers we are, while lobbying, we convinced the Conseil du Café improving the living conditions in our 4 Cacao to improve the main access road to the communities.” village, making the community more economically competitive. In other words, Cocoa Life brings 4 Conseil du Café Cacao is the body that regulates cocoa in Côte people the capacity to take care of themselves. d’Ivoire. http://www.conseilcafecacao.ci/ INTRODUCTION ENCOURAGING WAY FORWARD, CONCLUSION APPENDIX 26 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 27 KPI 3 KPI 5 KPI 6 KPI 7 KPI 8 Increase in Net income from Cocoa farmers’ Reduction in Increase in career women’s sources other reduced child labor and opportunities for participation in than cocoa vulnerability to forced child labor youth in cocoa decision-making external shocks sector process

IMPACT LEARNING THREE Through evaluation, we have learned that for many cocoa farmers, overall net income from cocoa is not enough to support their household year round. That said, cocoa farming is still the largest reliable source of cash income for the majority of farmers. That means that cocoa farming beats NEW INCOME other opportunities to earn income in rural areas, but this truth is potentially keeping farming households in cocoa despite them not having the right conditions to create a sustainable livelihood GENERATING own evaluation we know that, on average, farmers from it. For cocoa farming to be sustainable long-term, we need farmers to be able to choose lost additional income earning opportunities across it as a prosperous business of choice, not simply be their households. OPPORTUNITIES forced into it as the only viable way to earn a living. In anticipation of a longer-term, sector-wide, Only coordinated action beyond the cocoa sector coordinated income strategy, we currently offer ...BUT NOT FAST ENOUGH TO MOVE ALL FARMERS OUT OF POVERTY will create this change. workshops to grow new income opportunities and INCREASE INCOME increasingly advocate governments and other key Non-cocoa income complements nearly every Cocoa farming needs to be a prosperous cocoa farming family’s livelihood. Often cocoa actors to support the rural sector with sufficient business of choice. That means generating farmers themselves are also petty traders, investment. By the end of 2018, we supported enough income when combined with other local livestock raisers, or service providers. We learned over 18,500 households in starting new income income opportunities to support the livelihoods that the availability of opportunities is one of the earning activities. Encouragingly, from ABANTU of rural households. As part of our evaluation main factors determining the level of household for Development—a key implementing partner work we measure on-farm and off-farm income. resilience. In Indonesia, about 90% of cocoa in Ghana—we learned that households which This helps us understand the impact we have farmers have several options to earn income participated in these activities increased their through our holistic approach. We have also used with an average of 2.9 different sources. In Côte non-cocoa income by 37% compared with before new partnerships, for example with the Living 5 d’Ivoire about 66% of farmers have an average business start-up phase . But we cannot create a Income Community of Practice, to review our of 2.1 different sources of income. Being closely diversified local economy on our own, which is why measurement methods and ensure our results will tied to local economic context, non-cocoa income we are calling for a sector-wide strategy. be comparable against latest income benchmarks. increased significantly The majority (68% across all our origin countries) We’ve seen overall income of Cocoa Life BY THE END OF 2018, among cocoa farmers of participants in business start-up workshops were households rise over three years, driven both WE SUPPORTED OVER in Indonesia by about local women, often wives to or laborers for local by cocoa and non-cocoa income. We do see 120% between 2015 cocoa farmers. As part of our holistic approach, we fluctuations, but these are mainly due to local and 2018. However, in see that increasing the contribution women make farming conditions and economic factors. In Ghana we saw modest to their household’s income increases their share Indonesia, between 2015 to 2018, overall cocoa increases of about 6% of financial decision-making significantly, and raises income improved by about 13% with upward and HOUSEHOLDS IN STARTING NEW alongside decreases their community standing. It empowers them. We downward movements depending on location and of about 37% across learned that 88% of women in Côte d’Ivoire who year. In Ghana, we saw farmers in some regions 18,500INCOME EARNING different regions during participated in business start-up workshops saw improve their cocoa income by 6% while farmers ACTIVITIES the same time frame. their income increase thanks to their new activities. in other regions decreased their income by 26%, The outside context of The share of cash income generated by women partially due to a 20% reduction in overall cocoa a depreciating currency and a budget shortfall in increased 32% among participants in ABANTU’s farming area over the same time frame – mainly Ghana at this time cannot be ignored. From our activities in Ghana. Importantly, 56% of women in the result of plant disease or farm diversification. Ghana also said that they are solely in charge of the 5 Typical business activities supported are: soap making, cassava processing, income they earn themselves, and they typically oil palm and coconut oil production, petty trading, food vending, making of pastries, and food crop farming such as vegetable cultivation. invest it in family well-being and education. INTRODUCTION ENCOURAGING WAY FORWARD, CONCLUSION APPENDIX 28 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 29

IT JUST FEELS DIFFERENT WHEN I GET TO BUY THINGS WITH MY OWN MONEY – IT “FEELS GOOD KNOWING THAT I CAN PAY OFF THINGS WITH MY OWN MONEY. IT FEELS EVEN BETTER WHEN I CAN PROVIDE SOME MONEY FOR MY KIDS”.

Woman participant in Tettikengrarae, Soppeng, Indonesia

We have learned that sustainability and household resilience in cocoa farming communities does not depend on cocoa alone—in reality, across several communities, over-reliance on cocoa might create unsustainable conditions. We want to see empowered cocoa farmers who have chosen cocoa farming as a prosperous business among competitive opportunities. We advocate for broader partnerships and stakeholder support to grow income opportunities within local economies, because we know the true root cause of poverty is a lack of opportunity. Local Community Action Plans guide the way: cocoa communities immediately press for working transport infrastructure, safe drinking water, and access to quality education. At the same time, we commit to scale up our support for local entrepreneurs to start new business activities, and to course correct where needed based on our impact evaluation, to focus on addressing barriers to entry and market access. INTRODUCTION ENCOURAGING WAY FORWARD, CONCLUSION APPENDIX 30 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 31 KPI 9 KPI 10 Helping future Increase in farming generations conversation through sustainable of forests and natural resources maintenance of use on farm ecosystems

IMPACT LEARNING FOUR We aim to map 100% of farms within Ghana, Côte Through our experience we have learned that d’Ivoire and Indonesia by the end of 2019, but we taking responsibility for your supply chain need national structures in place to secure lasting is possible when strong partnerships are change. Governments must continue to review created. Engaging farmers and communities the legal classification and update the boundaries by providing information and training about of protected areas. Encouragingly, national bodies the importance of environmental protection COCOA LIFE FARMS AVOID are engaged and currently reviewing national is crucial, but we have to go further by forestry codes to ensure that the cocoa sector monitoring the exact location and expansion can access reliable information and clear process documentation to support the protection of of farms. In the future, we will continue PRIORITY PROTECTED forests. In the future, Mondelēz is committed to to explore innovative schemes such as deforestation free cocoa across all of its cocoa supply. Payments for Environmental Services (PES), Encouraging and enabling cocoa farmers and farms they source from. Our interactive online map to incentivize farmers and communities to AREAS AND FORESTS As part of a sector-wide, long-term strategy, protect forests and adopt forest-friendly communities to protect the land where cocoa is available here allows any user to see the approximate we became a founding member of the farming techniques such as planting grown has been fundamental to our approach. location of Cocoa Life farms. We partner with World Cocoa Foundation’s Cocoa and Forest Understanding where and under what conditions Global Forest Watch to analyze how Cocoa Life complementary crops alongside cocoa. Initiative6 (CFI) in 2018. Through the CFI, cocoa is produced is critical to encouraging farms interact with forested and protected land, But we know we can’t do it alone. Legal environment and forest-friendly farmer behavior. allowing us to intervene if farmers expand into governments, cocoa actors, and civil society frameworks need to come from governments The most efficient way to achieve this is to map protected areas. act together to create a deforestation free to provide security and clarity to rural and monitor farms. Since 2016, we have partnered cocoa supply chain, jointly committing to smallholder farming families who themselves with our suppliers to locate and map the farms that actions and targets. In line with the CFI, are often operating in vulnerable conditions. supply our cocoa across Côte d’Ivoire, Ghana, and we have investigated all 93,000 parks and Indonesia, providing transparency about their location. wildlife reserves in Ghana and Côte d’Ivoire. About 63% (93,000) of these farms, spanning over 166,577 ha, have been mapped already. Many farmers do not have adequate information about the size of their land, location, and legal COCOA LIFE HAS TAUGHT US status, so our mapping efforts also support them THAT THE CHANGES IN THE in understanding how to get more out of their farms – helping them build better businesses. WEATHER CONDITIONS ARE From evaluation we have learned that farmers tend to over-estimate the size of their farms and "Mondelēz’s Cocoa Life program has been diligently A RESULT OF THE CUTTING sometimes the difference can create misleading “ working to identify cocoa supply chain areas in assumptions about effectiveness and farming need of improvement, a critical step towards DOWN OF TREES IN THE techniques. During a 2018 study in Indonesia, the meeting their no deforestation goals. The World average farm size according to farmers was 4.9 ha, Resources Institute is proud to support Mondelēz FOREST. THEY HAVE TAUGHT with an estimated 3.5 ha of that land planted with in this effort through Global Forest Watch Pro – cocoa. However, a satellite-based mapping exercise an online platform that helps measure the impact US NOT TO ALLOW THIS ON showed on average 0.79 ha was planted with cocoa. of supply chains on forests. We look forward to continuing to work with Mondelēz and other Cocoa OUR FARMS AND THEY GIVE Since 2016, we have openly published our farm & Forests Initiative stakeholders to measure and mapping updates online, to promote a coordinated manage deforestation within the cocoa sector.” US TREES TO PLANT HERE.” strategy and supply-chain transparency. This milestone marked the first time any large cocoa Caroline Winchester, Global Forest Watch Commodities Farmer, Ayomso company had disclosed locations of the cocoa and Finance Research Analyst, World Resources Institute 6 https://www.worldcocoafoundation.org/initiative/cocoa-forests-initiative/ INTRODUCTION ENCOURAGING WAY FORWARD, CONCLUSION APPENDIX 32 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 33 WAY FORWARD, RENEWED FOCUS

AS OUR PROPRIETARY EXPANDING

SUSTAINABILITY PROGRAM Encouraged by the progress we are making and COCOAthe impact Cocoa LifeLIFE creates, we are proud to COCOA LIFE IS SIMPLY ‘HOW commit that all our chocolate brands will source WE DO BUSINESS’ AND IS their cocoa from Cocoa Life by 2025. This means “ that we will know where our cocoa is grown, that FULLY INTEGRATED INTO ALL it doesn’t come from protected forests and that appropriate due diligence is in place to address the OF OUR SOURCING DECISIONS. child labor risk. Today, we source 43% of our chocolate through THIS IS IMPORTANT BECAUSE Cocoa Life, and we have everything in place now to scale this up. In order to ensure that we continue WE NEED A ROBUST SUPPLY creating a positive impact CHAIN TO GROW OUR TODAY, WE SOURCE while introducing more farmers and communities CHOCOLATE BUSINESS. I AM to Cocoa Life, we felt it important to review the PROUD OF THE PROGRESS WE Cocoa Life framework OF OUR CHOCOLATE – which defines why our ARE MAKING TO IMPROVE THROUGH program exists and how 43% it delivers on the ground. THE LIVES OF THE FARMERS COCOA LIFE As a result, we have AND WE HAVE brought an even stronger WHO GROW OUR COCOA AND EVERYTHING IN PLACE focus to our key areas AM KEENLY EXPLORING NEW NOW TO SCALE THIS UP of intervention. INNOVATIONS THAT WILL FURTHER MODERNIZE COCOA FARMING AROUND THE WORLD.“

Mark Dady, Senior Vice President, CPO & Global Supply Chain Strategy INTRODUCTION ENCOURAGING WAY FORWARD, CONCLUSION APPENDIX 34 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 35

IT IS OF GLOBAL IMPORTANCE THAT COCOA LIFE, THE LARGEST SINGLE “ Our interventions on the ground focus on We need thriving cocoa growing OUR COMPANY SUSTAINABLE COCOA making cocoa farming a prosperous business, communities that are empowered to while ensuring the communities they are part drive their own development, that have the capacity and knowledge to identify PROGRAM, FULLY RECOGNIZES AS A of are inclusive and empowered, and forests development needs, design action FRAMEWORK are protected and restored. plans and secure the funding needed TOP PRIORITY OF THEIR PROGRAM TO to achieve them. We need women’s voices to be heard and for women to be That's CONSERVE AND RESTORE FORESTS. TOWe have a visionSCALE to make cocoa right. UP influential and economically empowered, why our mission is to lead the transformation because women’s empowerment of the cocoa sector. We do this by implementing THIS PRIORITY IS ALONGSIDE benefits all. We believe the work of our holistic program in partnership with others, children is education and play. Our sharing what we've learned on the journey, and by EMPOWERING COCOA COMMUNITIES interventions are focused around addressing these themes as advocating for policy change. We need to modernize AND ENSURING SUSTAINABLE well as bringing stronger cocoa farming and We are creating a movement for lasting change, resilience through promoting make sure that in rooted in deep understanding, sector-wide LIVELIHOODS FOR COCOA FARMERS. entrepreneurship and access the future, farmers collaboration and partnership. to financial services. IT IS ONLY WHEN PLACED AT choose cocoa because To deliver on our mission, we have it is a productive crop 5 principles that guide all our actions: THIS LEVEL OF IMPORTANCE CAN that provides a good livelihood. Therefore, INCREASE TRANSPARENCY INTERVENTIONS BE SUFFICIENTLY our first area of focus BY CONNECTING CONSUMERS includes interventions TO COCOA GROWERS FOCUSED AND SUBSTANTIAL TO that strengthen cocoa farmer organizations and We believe that conserving the 1 ALWAYS AIM FOR COCOA MAKE A REAL DIFFERENCE.” help farmers grow more cocoa land and forests is a promise to future GROWING COMMUNITIES on less land. Informed by knowledge generations. Under this key area, we focus TO SUSTAIN THEMSELVES BY Andrew Bovarnick, Lead Natural Resource Economist and gained from agricultural research, and by on maintaining cocoa ecosystems by protecting the grouping farms into comparable groups, we BUILDING CAPACITY AT ORIGIN Global Head, United Nations Development Programme’s land and forests. All Cocoa Life farms are satellite Green Commodities Program, and Cocoa Life Advisor stimulate the adoption of Good Agricultural mapped and monitored, allowing us to identify 2 Practices in a targeted way. In addition, we MAKE GREATER IMPACT BY areas at risk of deforestation and take action to We believe that integrity and accountability are as provide access to fertilizer, crop protection, prevent this. Interventions include systematically CREATING TRANSFORMATIVE improved planting materials and financial PARTNERSHIPS important as sun and water. That’s why understanding including Good Environmental Practices in farmer the impact of our interventions, while maintaining full knowledge – at the right time and with the coaching, promoting and piloting agroforestry models right support. We believe farmers shouldn’t 3 RESPECT HUMAN RIGHTS, WITH transparency of our supply chain, is a program essential. where appropriate, and implementing Payment for have to farm cocoa because it’s the only Environmental Services mechanisms with Redd+ A FOCUS ON CHILD RIGHTS AND We continue to ensure independent evaluation of our viable business option for them but because and the relevant ministries to incentivize farmers and program impact by working with Ipsos, and Flocert WOMEN’S EMPOWERMENT it is a prosperous business. For that to be communities to restore the forests. 4 will continue to verify the volume and premium flow the case, returns from other crops and rural ENSURE BUSINESS RELEVANCE in our Cocoa Life supply chain so we maintain full development overall also need to increase. transparency. Furthermore, we will continue to work 5 with classic smallholder farming models but also explore more innovative ways of engaging with smallholders through, for example, aggregated farms. INTRODUCTION ENCOURAGING WAY FORWARD, CONCLUSION APPENDIX 36 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 37

CASE STUDY:

When Cocoa Life started, we rolled out standard Building on our learnings from this project, we farmer field training, where one farmer trainer then worked to identify the key factors affecting A TARGETED would train groups fluctuating from 50 to 100 adoption of Good Agricultural Practices: farmers, and sometimes even more, at once. The • Access to the right inputs, such as fertilizer, at the right time approach didn’t take into account the fact that • Access to labor to apply the required GOOD each farm and each farmer is different. The interventions challenges on each farm were so unique that • Ability to prioritize the most effective this approach did not lead to the improvements intervention for each specific farm AGRICULTURAL we had hoped for. So we developed a more targeted system: one better suited to individual With this in mind, we created a targeted GAP farms’ challenges. system to help farmers prioritize which actions would be most effective, and tested it with them. We have We are now introducing individual coaching and PRACTICES now concluded the trial phase in Ghana, which the use of Farm Development Plans across our training program. We believe this will allow us to involved providing tailor-made recommendations have more relevant recommendations, adapted supported by soil analysis to farmers across 40 APPROACH IN to each farmer who will have to decide what farms. We also provided assistance for farmers investment they are prepared to make on their farm. to implement the recommendations. In Ghana and Côte d’Ivoire, we decided to The results after 3 years are very encouraging. GHANAOver the years of Cocoa Life we go one step further and have been testing On average, we almost doubled the yield on cocoa have listened and responded to ‘Targeted GAPs’. We believe about a quarter of farms: from 667 kg/ha to 1225 kg/ha per year, and farmers’ needs, and evolved our Cocoa Life registered farms could be offered we greatly increased farmers’ annual net income. these. We devised this pilot using insights and approach to improve our impact. learnings from the Mapping Cocoa Productivity Some of the best feedback has come from the We’ve learned that there is no project we ran with the University of Reading, farmers themselves. Isaac Awiakye Amoah, a ‘one-size-fits-all’. The key to lasting the Cocoa Research Institute of Ghana cocoa farmer from the Adiembra community in change is a holistic program with (CRIG) and the Indonesian Coffee and Cocoa Ghana, said: “I took part in the targeted GAPs targeted interventions, tailored to Research Institute (ICCRI). This project studied project because my yield was not high - I needed community needs. Nowhere has how different farming practices impacted more. I have learnt that when I use GAPs, my smallholder cocoa productivity on more than this been more clearly observed yield increases. I now no longer need to borrow 300 farms over 3 years – looking at all the than through our work to embed money to pay for my children’s university fees.” Good Agricultural Practices within different factors that affect a farm. our cocoa-growing communities. We found that the key factors affecting yield size We’re incredibly pleased with these results, but included fertiliser application, fungicide application there’s no time to lose. We are now moving (against blackpod disease), planting density and into the next phase: designing and setting up soil nutrient content. The amount of shade partnerships to validate our approach across recorded was also often below recommended 500 farms in Ghana. We are confident that levels, leading to the insight that additional this targeted system, responsive to individual shade planting may benefit many cocoa farms. farm needs, will create tangible, positive Overall, the study’s results highlighted that benefits for farmers in our cocoa supply chain, there was considerable potential for yield increase on cocoa farms if practices improved. helping them to grow opportunities and improve their livelihoods. INTRODUCTION ENCOURAGING WAY FORWARD, CONCLUSION APPENDIX 38 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 39

CASE STUDY:

Our approach to eliminating child Cocoa Life in the long-term, they also focus labor is three-pronged: it focuses on on building the capacity of the communities A HOLISTIC prevention, monitoring and remediation, themselves, as well as that of public authorities with a heavy emphasis on addressing to support them and fulfil their duty to protect the root causes of child labor. human rights. That means, as part of our APPROACH TO CLMRS, we: • Set up and train Child Protection Committees to become the focal point PREVENTIONCocoa Life’s holistic approach addresses the ELIMINATING within the community and primary liaison root causes of child labor around poverty to school and district authorities and lack of rural development. Through • Use government-developed tools to our Community Action Plans, we develop support national policies and avoid the CHILD LABOR interventions to: Respecting and promoting human rights is a key principle creation of parallel systems • Increase income from cocoa farming as of our framework as part of our work to ensure our cocoa • Share all data with the authorities and well as additional sources communities are empowered and inclusive. Central to this work refer identified cases for remediation • Empower communities to advocate for are our efforts to eliminate child labor and protect the rights of whenever needed their own development children. • Take a broader lens and consider child • Empower women at household and rights beyond child labor, for instance When a new community joins the Cocoa Life program, our community levelmmnity level NGO partners on the ground conduct a needs assessment, setting up child reading clubs to empower involving the local community. The assessment covers human Prosperous cocoa farms mean farmers are less children to advocate for their own rights likely to rely on their children to support in their rights issues such as forced labor and child labor. Based on We are working with local authorities and work. Empowered women and communities, this assessment and with support from partners, community partners towards having a CLMRS in place who understand their development needs, will members develop a Community Action Plan. This plan enables in all 1,123 Cocoa Life communities in Ghana push for their children to remain in school. our partners to implement a range of activities to address and Côte d’Ivoire. By the end of 2018, 403 identified issues. Working with communities, we then communities in Ghana were already covered by equip them with the skills they need to advocate for a community-based CLMRS. their own development, safeguard their livelihoods MONITORINGIn Côte d’Ivoire and & Ghana, REMEDIATION where extensive and prevent issues like child labor in the long-term. Working through industry and research, including studies commissioned by multi-stakeholder platforms, we also call for Mondelēz International, confirms a high risk of industry and governments to join forces to child labor in the cocoa sector, we are working create comprehensive, systemic solutions. with local authorities and partners to roll out In order to be effective, we need strong community-based Child Labor Monitoring public-private partnerships and widespread and Remediation Systems (CLMRS). recognition that child labor is a symptom of When we say ‘community-based’, we mean deeper underlying issues, such as poverty and that like Cocoa Life, the CLMRS is centered lack of rural development. In order to make true on communities. To ensure the CLMRS are and long-lasting positive change, these issues sustainable and able to run independently of must be addressed at their core. INTRODUCTION ENCOURAGING WAY FORWARD, CONCLUSION APPENDIX 40 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 41

"MONDELEZ INTERNATIONAL IS A KEY CASE STUDY: PARTNER FOR US IN CÔTE D'IVOIRE. I AM IMPRESSED BY THEIR CONTINUED Maintaining cocoa ecosystems “COMMITMENT TO PROTECTING AND and protecting the landscape DRIVING has been core to the program RESTORING FORESTS, AND WE ARE since it was launched. Our innovative Payments for DELIGHTED TO LEARN WITH THEM REFORESTATION Environmental Services (PES) AS THEY SCALE UP THEIR PES PILOT pilot project in the Nawa region of Côte d’Ivoire is a great example FROM THE NAWA REGION. TOGETHER, of our broad-reaching approach EFFORTS IN to protecting our forests. WE HOPE TO CREATE A DYNAMIC AND Reforestation work needs to SOLID COCOA SUPPLY CHAIN WHILE CÔTE D’IVOIRE generate financial value to those involved, in order to ensure it continues. But reforestation is TRANSFORMING THE LIVELIHOODS OF a big commitment both from FARMERS AND THEIR COMMUNITIES." a financial perspective and in terms of time and resources. The PES scheme alleviates Mr. Alain-Richard Donwahi, Minister of Water and Forests, some of these upfront costs Côte d’Ivoire to farmers.

Payments for Environmental Services are voluntary contracts created with farmers or ATThe purposeCOCOA is toFARMER support cocoa LEVEL: farmers to communities, wherein economic incentives invest in productive agricultural practices, are offered for adopting agreed farming which are respectful of the environment and practices that protect and restore forests. forests, such as agroforestry – which means Within Cocoa Life, PES combines two planting of non-cocoa tree crops on their approaches: farms. PES incentives can take the form of seedlings, technical support for plantation management, and a financial bonus ATThis involvesCOMMUNITY cocoa growing LEVEL: communities for success. This allows farmers to in a collective conservation and diversify sources of income, reforestation effort, through a plan and preserve and restore for land use. the landscape they work in. INTRODUCTION ENCOURAGING WAY FORWARD, CONCLUSION APPENDIX 42 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 43

SO FAR,

OVER So far, over 900 smallholder farmers in Côte PES AS AN ENABLER FOR d’Ivoire have signed contracts as tree planters in 900 return for PES incentives. This forward-looking SMALLHOLDERIN CÔTE D’IVOIRE WOMEN’SWomen often feelEMPOWERMENT the impacts of climate project is not only seeing great success in terms change most immediately, as they tend to be of the number of farmers signing up; it is also HAVEFARMERS SIGNED CONTRACTS AS TREE PLANTERS in charge of their household’s food security. providing many local women with new economic IN RETURN FOR PES INCENTIVES Climate change makes it increasingly difficult opportunities. Through community-level for women to have access to key amenities contracts, the scheme also provides social including water, food, firewood and medicinal infrastructure such as schools, clinics and wells plants. So in partnership with organisations in exchange for successful reforestation or including Impactum and CARE International, conservation. we have been working to develop a green entrepreneurship program for women in Côte To implement the pilot we work closely with d'Ivoire, helping them build livelihoods while our partners: NGOs Impactum and CARE preserving the environment. International, as well the EU REDD Facility and the government of Côte d’Ivoire. The project, which combines PES with reforestation and agroforestry, supports the Such genuine collaboration between creation of nurseries to grow food and shade a range of public and private partners tree seedlings. These are essential for a healthy is generating positive results. We are and varied forest and provide shade to help committed to continuing to drive cocoa trees thrive. these projects in all our cocoa-growing We connected six women-led savings and loan communities: by the end of 2022, we groups to three tree nurseries, which they now aim to have 20,000 farmers signed run. The women receive regular training on tree up to PES schemes in Côte d’Ivoire. In production techniques and how to manage the Ghana, we aim to target 10,000 farmers nurseries. We provide them with a continuous from 50 communities with PES. And supply of seeds for timber and food trees in Indonesia, our goal is 3,000 PES such as mahogany and acacia. Once grown, contracts.7 By working hand-in-hand seedlings are distributed to cocoa farmers with our communities and creating the registered under the PES scheme or sold by right incentives we can achieve this goal, the women, creating an additional income and grow opportunities for both men and stream for their savings and loan groups. women in all our origin countries.

7 Source: CFI Action Plans INTRODUCTION ENCOURAGING WAY FORWARD, CONCLUSION APPENDIX 44 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 45 CONCLUSION

At the World Cocoa Foundation, we are impressed with Mondelēz’s strong global leadership on the Cocoa & Forests Initiative. Ending deforestation in the cocoa supply chain is a complex LOOKING TO THE and difficult journey. Its CFI action plans, developed with national and “local governments, lay out a series of We take pride in the encouraging results set out innovative and powerful interventions inOPPORTUNITIES this report, and in working with our partners A HIGH-LEVEL AHEAD STRATEGY that will truly drive change in the to deliver them. These results are only possible supply chain and show the company’s through working in partnership and by listening SUPPORTED BY LONG-TERM determination to protect and restore to the wisdom of our external advisors from AtCOORDINATED Cocoa Life, we have ACTION set the wheels in motion forests. Mondelēz is already making leading environmental, policy and humanitarian great progress through its Cocoa Life to ensure our activities contribute to this broader program with concrete actions to tackle organizations: their expertise and outside strategy. As a signatory and founding member perspective keeps us on the right course. They issues on the ground and by innovating of the Cocoa & Forests Initiative, we are proud with the introduction of Payment for challenge us to expand our goals and policies and to have been a driving force in this sector-wide Environmental Services among others.” hold us accountable to continuous improvement. commitment to tackle deforestation. We, alongside each ratifying member, now have our Richard Scobey, President, I’ll never forget the experiences I’ve had 8 working hand-in-hand with cocoa farmers. own action plan with concrete targets that ladder World Cocoa Foundation Some of my favorite moments have been up to the wider goals. The result will be much more starting needs assessments and finding than the sum of its parts. success through true cooperation and Public-private partnerships (PPPs) are a powerful co-creation. It’s so powerful seeing the light tool. Working with World Cocoa Foundation in someone’s eyes as they have that ‘aha!’ (WCF) and the International Cocoa Initiative moment: as they realize that they are part “ (ICI), we support a systemic approach to address of the solution and they have the ability to steer their own development. I remember the root causes of child labor in close partnership one community member telling me that with governments, development partners and civil thanks to her involvement in her Community society organizations. Development Committee, her confidence We are proud to be a founding and active member increased and she had taken on the challenge of CocoaAction.9 Over the past four years to steer the focus of her community’s of CocoaAction, the industry has started to development plan. Through her training and implement programming aligned on a common support from the VSLAs she had also secured additional income for her family, helping approach built on shared best practices. We position her as a co-decision maker alongside learned that the industry cannot drive the change her husband and enabling her to send her needed on its own and a multi-stakeholder two daughters to school, whereas previously approach especially with governments is critical to they just sent their sons. This is where address the complex topics we are trying to tackle empowerment starts." in a non-competitive way. We remain committed to CocoaAction and will proactively share the Cathy Pieters, Global Director, Cocoa Life. learnings in this report to help guide future actions, with more stakeholders onboard. But the job is far from done. As a sector, we still have a long road ahead, and our journey so far has 8 Cocoa Life (2019) Action Plans: Ending deforestation, promoting forest restoration and sustainable production in the cocoa supply. chain. https://www.cocoalife.org/~/media/CocoaLife/ taught us that we need: en/download//article/Cocoa_Life_Action_Plans_March_5_2019.pdf 9 https://www.worldcocoafoundation.org/about-wcf/cocoaaction/ INTRODUCTION ENCOURAGING WAY FORWARD, CONCLUSION APPENDIX 46 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 47

HOLISTIC ACTION TO Cocoa Life and Fairtrade evolved their ToTACKLE build truly ROOT sustainable CAUSES livelihoods, we must look at partnership in 2016 to work together all factors contributing to the amount of income a on new innovative programs to improve household needs: from the size of the household, to sustainable livelihoods for cocoa farmers, THANK YOU TO additional sources of income and farm productivity. to strengthen farmer organizations, and Starting at the root, we are working with Fairtrade to increase farmers' resilience in the face to understand the building blocks of a sustainable of climate change. Our latest joined livelihood. Then we will look at where our Cocoa Life “research project aims to identify ways OUR PARTNERS program is delivering, and identify potential gaps. to scale up, innovate and create lasting impact for cocoa farming communities in We hope our encouraging results inspire more Ghana and Côte d’Ivoire, complementing industry members to implement integrated each of our programs and using an approaches and broaden their impact at scale. approach that allows us to investigate what works and improve. EXTERNAL INDUSTRY We know that in order for cocoa farming to deliver ADVISORS PLATFORMS for farmers and their families now and in the The research allows us to see a picture future, it must become a prosperous business, and of the whole sector effort, identifying the landscape must be protected. That’s why we opportunities for designing and delivering programs. The results will work closely with farmers to address the whole point the way forward not only for picture. We coach them on Good Agricultural Cocoa Life, but for any interested actor CHOCOLATE VERIFICATION Practices that help them grow more cocoa designing programs or working in West on less land. We introduce them to innovative Africa with cocoa farmers. Mondelēz BRANDS & RESEARCH agroforestry techniques (with financial incentives) and Fairtrade will publish the study later TOGETHER BODIES that encourage crop and income diversification, in the year. Based on the outcomes of and promote the conservation and protection of this landscape study, we are in a position WE GROW forests. We also develop tailored plans for farmers, to design programs with farmers using OPPORTUNITIES laying out the actions individual farmers can take innovative approaches and introduce to get the most from their land. One size does not interventions to positively disrupt fit all, which is why we invest in developing targeted the cocoa sector and allow farmers to coaching programs for our farmers, in order to increase their incomes and improve their livelihoods in a sustainable way.” IMPLEMENTING GOVERNMENTS generate solutions that last. PARTNERS However, beyond working with individual farmers, Naomi Somerville-Large, Monitoring, Evaluation we as a sector need to be open to exploring new, and Learning Manager, The Fairtrade Foundation innovative farming models that will take cocoa into the future as a modern crop. We need to be agile, flexible and adaptable in order to guarantee a sustainable supply of cocoa. Cocoa is the essence of our chocolate, so we must Only by implementing a sector-wide, holistic, ensure it is made right. We believe getting it right long-term strategy, and one that is supported by at the root gives us the best chance. Success will coordinated action by industry players, producing not be found by acting alone, and this is why we and consuming governments, and civil society, are building a movement for lasting change: to will we achieve this lasting change. scale our holistic approach through productive, collaborative partnerships. INTRODUCTION ENCOURAGING WAY FORWARD, CONCLUSION APPENDIX 48 COCOA LIFE ANNUAL REPORT 2018 RESULTS RENEWED FOCUS 49 APPENDIX

COMMUNITY ACTION ShadeECONOMIC trees / SHADEare an TREESimportant GOOD AGRICULTURAL WeREFORESTATION encourage farmers to ThePLAN development (CAP) of part of sustainable cocoa CocoaPRACTICES Life (GAP) farmers receive plant non-cocoa trees both these plans is facilitated farming; they safeguard training in best practice on their farms and in forests by expert NGO partners cocoa against too much farming methods to increase affected by deforestation AGRICULTURAL and implemented by the sunshine and heat and productivity and yields. We in order to protect the BarryIMPLEMENTING Callebaut PARTNERS CadburyCHOCOLATE Dairy BRANDS Milkw OUR PARTNERS GLOSSARYEXTENSION SERVICE communities to ensure improve soil quality. This also facilitate access to inputs environment and help CARE International Côte d’Or The application of scientific their development has a positive influence such as improved planting maintain cocoa ecosystems. Cargill Daim research and new knowledge socially, economically on long term productivity, material and fertilizers. Ecom Freia to agricultural practices and environmentally. help safeguard biodiversity, Fairtrade Green & Black’s through farmer education. Communities determine and can provide additional RETURN ON INVESTMENT Olam Marabou their own community income for farmers. AnIPSOS independent international WeOF THE make FARM recommendations Save the Children Milka AGROFORESTRY development actions – research organization that to Cocoa Life registered Solidaridad Suchard On Cocoa Life registered including forest protection works on the ground to farmers to help to increase Swisscontact farms, farmers are and restoration – to FarmFARM MAPPINGmapping is usually done measure our program and productivity, such as making UNDP encouraged to plant encourage ownership. by people walking around the the impact we have. They financial investment on the VSO AidanEXTERNAL McQuade ADVISORS non-cocoa trees alongside farm with a GPS device to look at 10 key performance farm. Before making such World Vision Ghana Andrew Bovarnick cocoa crops. This supports delimit the boarders. It helps indicators - such as cocoa recommendations we ensure Abantu (Ghana) David McLaughlin soil quality, encourages COMMUNITY DEVELOPMENT us understand farm sizes and yield and reduction in child the farmers will recover the Child Rights International Jane Nyambura diversification and provides COMMITTEESCommittees (CODEC) established locations. Understanding labor - to assess whether money invested and make (Ghana) Mil Niepold new sources of income. through facilitation by Cocoa where and under which we’re creating the right additional margin through Right To Play (Ghana) Life to ensure that CAPs are conditions cocoa is produced change in these areas. increased productivity Institute of Democratic CHILD LABOR MONITORING ‘owned’ by the community. allows prevention of farms generated by the investment. Governance (Ghana) InternationalINDUSTRY PLATFORMS Cocoa Initiative (ICI) AND REMEDIATION SYSTEMS These committees are expanding into the forest. We therefore look at the Treeglobal (Ghana) World Cocoa Foundation (WCF) LIVING INCOME COMMUNITY (CLMRS) formed by elected members, return on investment, or AgroEco (Ghana) A structure embedded in representing all groups of the AnOF PRACTICEalliance of partners net income generated Impactum (Côte d’Ivoire) our cocoa supply chain community. RefersFARM PRODUCTIVITY to the volume of dedicated to the vision of by the farm activity after Earthworm (Côte d’Ivoire) IPSOSOTHER which aims to identify and cocoa produced on Cocoa thriving and economically considering the investment ADVANS (Côte d’Ivoire) Flocert remediate cases of child Life registered farms. stable communities. As made. Conacado (Dominican Republic) TNC (Brazil) labor. Our CLMRS approach GrowingCROP DIVERSIFICATION a variety of crops Analyzing this information a partner, we use the REDDOM (Dominican Republic) Magic Bus (India) is centred on communities on a farm and off-farm. This will help us to support Cocoa community to review our Fuparoca (Dominican Republic) World Resources Institute/Global and focuses on building the expands production-related Life farmers in increasing the measurement methods VILLAGE SAVING AND LOANS Rizek (Dominican Republic) Forest Watch capacity of the communities activities and also reduces production of cocoa. and ensure our results are ASSOCIATIONS (VSLAS OR WAHANA VISI INDONESIA Jacobs Foundation (Côte d’Ivoire) themselves, as well as that of risk to farmers by allowing comparable against the latest ASAVINGS flagship AND activity LOAN GROUPS)of public authorities to support them to spread their income benchmarks. Cocoa Life, their purpose them to fulfil their duty to income-generation over FLOCERTAn independent is to encourage savings GhanaGOVERNMENTS Cocoa Board protect human rights. multiple crops. international certification and access loans for cocoa Conseil du Café-Cacao body that we work with. PAYMENT FOR ENVIRONMENTAL farmers. Members of a Indonesian Coffee & Cocoa SERVICES (PES) COCOA & FORESTS It continuously collects Economic incentives offered VSLA make small, regular Research Institute (ICCRI) DEVELOPMENT PLANNING INITIATIVE (CFI) information from our to farmers for adopting monetary contributions to Kerala Agriculture University A collective group of DELIBERATIONS direct suppliers and farmer agreed agroforestry a shared pool, from which (India) companies, industry A(MUSREMBANG) local community planning organizations to verify practices, as well as forest they may each take out CEPLAC (Brazil) and governments to end structure in Indonesia, the flow of cocoa from protection and reforestation. low-interest loans. At the National Board for Small-Scale deforestation and promote which puts in place capacity Cocoa Life communities end of a one-year cycle, the Industries (NBSSI) Ghana forest restoration and to drive community into our supply chain, and sum of the pool is shared Ministry of Environment Côte protection in the cocoa development. the benefits that cocoa PUBLIC PRIVATE out among members based d’Ivoire supply chain. farmers receive. Verification ThesePARTNERSHIPS are cooperative (PPP) on contributions made, and Ministry of Water & Forests Côte provides transparency and arrangements between two a new contribution cycle d’Ivoire enables us to quantify Cocoa or more public and private begins. Life’s impact on farming sectors of a long-term communities. nature. 50 COCOA LIFE ANNUAL REPORT 2018

AWE sustainable BELIEVE cocoa supply begins with empowered cocoa farmers Integrity and accountability are as important as sun and water Partnership is the key to lasting change Efficient farming practices lead to financial security The work of children is education and play Gender equality benefits everyone Conserving the land and forests is a promise to future generations

COCOA LIFE: GROWING OPPORTUNITIES TOGETHER