Enhancing supply chain sustainability

Background

Swiss chocolate makers are increasingly held accountable for the environmental, social, and economic impacts of their supply chains. Despite numerous sustainability initiatives, many challenges remain, and diverse supply chain actors need to build resilience to better face increasing shocks in global chains. Addressing sustainability and resilience in supply chains requires an understanding of the current situation, the major challenges, and the effectiveness of sustainable sourcing practices.

Aims

The project followed three aims: 1) To assess the sustainability of specific supply chains providing cocoa to the Swiss market. Based on these results, we could then design, implement, and evaluate targeted interventions. 2) To evaluate the relationships between diverse supply chain partners and how farmers view the sustainable sourcing practices in their supply chains. 3) To advance resilience research by developing and testing a farm-level resilience assessment framework.

Results

Areas of sustainability challenges and impacts

We found that the farm level had the largest environmental impact in cocoa supply chains, which are mainly influenced by land-use change and input use. When assessing farm-level sustainability through a comprehensive lense, major sustainabiltiy challenges were identified in the governance and social dimensions. While environmentally-friendly cocoa production brought important co-benefits regarding human health and resource conservation for farms' long-term productivity, these came at the expense of farm investment and profitability. The evaluation of the supply chain interventions targeting pesticide use on cocoa farms revealed that relying purely on farmer training is not sufficient to achieve the wide-spread adoption of sustainable cocoa farming practices.

Benefits and disadvantages of sustainable sourcing practices

Farmers perceived both benefits and disadvantages from the sustainable sourcing practices in their supply chains. Farmers’ relationships with their direct buyers were complex and variable, with  trust in, and commitment to, their direct buyers depending on a range of factors, including the duration of the professional relationship and the availability of competitors. Conflicts mainly arose due to prices, insufficient communication, and lack of support. The responding farmers collectively expressed a wish for training to be less theoretical, and to be more practice-oriented and supportive for the farmers.

Transformation and supply chain resilience capacity

Short-term absorptive (e.g. economic robustness), medium-term adaptive (e.g. economic adaptability), and long-term transformative (e.g. social infrastructure) capacities are three distinct capacities defined by resilience theory. Our results showed that farmers with high short-term absorptive capacities, e.g. through diversified livelihoods or the adoption of good agricultural practices, could  counter the effects of the Covid-19 pandemic more strongly. This suggests that studies on farm resilience should differentiate between the three individual capacities and address specific strategies against known risks, instead of aggregating results to one single resilience score.  We also identified important ways in which farmers can increase their resilience, such as reduction of travel or cultivation of subsistance crops. This, however, holds important trade-offs with the general resilience of supply chains.

Implications for research

Our project extended the knowledge of sustainability and resilience of cocoa supply chains. The in-depth analysis at farm-level enabled us to identify the main trade-offs and synergies between sustainability dimensions. Environmental-social trade-offs included food security, dietary diversity, and on-farm job creation. Liquidity, profitability, and internal investments represented environmental-economic trade-offs. Synergies were found within the themes of human health and long-term productivity.

We examined the effects of sustainable sourcing practices and developed suggestions for improvement. These include combining information measures with incentives, promoting good crop mangement for pesticide reduction, and strengthening the buyer-supplier relationships Two frameworks were developed and tested: one for buyer-supplier relationships within sustainable sourcing practices and another for general farm-level resilience assessments.

Implications for practice

Our findings and recommendations are mainly intended for our partners from the Swiss chocolate sector and to inform private sustainability governance along the cocoa and other global supply chains. However, the challenges they face: namely socio-economic challenges in producer communtities, insufficient adoption of good agricultural practices, and increasing legal requirements in consumer countries, are common in the cocoa sector. Therefore, the results and suggestions are also relevant to public stakeholders and institutions, and can support the establishment of effective interventions for supply chain sustainability.