IROs identified (grouped)
| Group | Impacts | Risks | Opportunities |
|---|---|---|---|
| Climate and Environmental | - Significant greenhouse gas emissions - High water usage - Deforestation - Intensive resource use | - Increased operational costs due to carbon pricing - Regulatory fines for water pollution - Supply chain disruptions from climate-related events - Volatility in raw material prices | - Investment in renewable energy - Water-efficient technologies - Restoration projects - Sustainable raw material sourcing |
| Supply Chain Management | - Dependence on non-renewable resources - Fair wages and safe working conditions - Elimination of child labor | - Supply chain disruptions from unethical practices - Resource scarcity - Legal liabilities related to labor violations | - Building a responsible supply chain - Strengthening supplier relationships - Innovation in alternative materials |
| Social Responsibility | - Employee well-being - Impact on local communities - Health and safety of products | - High turnover rates - Labor disputes - Community opposition - Loss of consumer trust | - Enhanced employee engagement - Community development initiatives - Transparent practices - Enhancing brand loyalty |
| Governance and Compliance | - Ethical business practices - Effective risk management - Transparent decision-making processes | - Legal penalties - Reputation damage - Strategic failures - Inefficiencies from inadequate management practices | - Building a trustworthy brand - Improved operational efficiency - Enhanced investor confidence |
| Resource and Operational Efficiency | - Intensive use of raw materials - Dependence on non-renewable resources | - Resource scarcity affecting production continuity | - Innovation in eco-friendly materials - Implementing energy-efficient processes |
| Community and Stakeholder Engagement | - Impact on local communities - Access to education and healthcare in cocoa regions | - Social unrest affecting production areas | - Collaborative projects enhancing local infrastructure - Fostering goodwill through community initiatives |
| Product Transparency and Health | - Health and safety of food products - Transparency in labeling and sourcing | - Decline in sales from negative perceptions | - Growing market for ethically sourced and healthy products - Enhancing brand loyalty through transparency |
Ranking
| Matter | Impact Materiality | Risk | Opportunity | Financial Materiality (Risk + Opportunity) | Double Materiality (Combined) |
|---|---|---|---|---|---|
| E1 Climate Change | 4 | 4 | 3 | 4 | 4 |
| E3 Water & Marine Resources | 4 | 3 | 2 | 3 | 4 |
| E4 Biodiversity | 2 | 3 | 5 | 5 | |
| E6 Resource Use and Raw Materials | 4 | 4 | 3 | 4 | 4 |
| S1 Own Workforce | 3 | 2 | 2 | 3 | |
| S2 Workers in the Value Chain | 5 | 4 | 3 | 4 | 5 |
| S3 Affected Communities | 3 | 2 | 2 | 3 | |
| S4 Consumers and End-users | 4 | 4 | 3 | 4 | 4 |
| G1 Business Conduct | 4 | 3 | 2 | 3 | 4 |
| G2 Management and Control | 2 | 3 | 3 | 3 |
5: critical, 4: significant, 3: important, 2: informational, 1: minimal
Decisions of Ranking
E1 Climate Change
- Impact Materiality:
- Significant greenhouse gas emissions from production and transportation
- Vulnerability to extreme weather affecting cocoa yields
- Risk:
- Increased operational costs due to carbon pricing
- Supply chain disruptions from climate-related events
- Opportunity:
- Investment in renewable energy reducing long-term costs
- Development of climate-resilient cocoa varieties
E3 Water & Marine Resources
- Impact Materiality:
- High water usage in processing and farming
- Potential water pollution from agrochemicals
- Risk:
- Regulatory fines for water pollution
- Scarcity of water resources affecting production
- Opportunity:
- Implementation of water-efficient technologies
- Certification for sustainable water management practices
E4 Biodiversity
- Impact Materiality:
- Deforestation for cocoa plantations reducing biodiversity
- Habitat loss impacting local ecosystems
- Risk:
- Loss of ecosystem services vital for agriculture
- Reputational damage from biodiversity degradation
- Opportunity:
- Restoration projects enhancing ecosystem health
- Partnering with conservation organizations for sustainable practices
E6 Resource Use and Raw Materials
- Impact Materiality:
- Intensive use of raw materials like cocoa, sugar, and packaging
- Dependence on non-renewable resources
- Risk:
- Volatility in raw material prices
- Resource scarcity impacting production continuity
- Opportunity:
- Sourcing sustainable and certified raw materials
- Innovation in alternative, eco-friendly materials
S1 Own Workforce
- Impact Materiality:
- Employee well-being and fair labor practices
- Training and development opportunities
- Risk:
- High turnover rates affecting productivity
- Potential labor disputes or strikes
- Opportunity:
- Enhanced employee engagement and satisfaction
- Attracting talent through strong HR practices
S2 Workers in the Value Chain
- Impact Materiality:
- Fair wages and safe working conditions for suppliers
- Elimination of child labor in cocoa farms
- Risk:
- Supply chain disruptions from unethical practices
- Legal liabilities related to labor violations
- Opportunity:
- Building a responsible and reliable supply chain
- Strengthening supplier relationships through support programs
S3 Affected Communities
- Impact Materiality:
- Impact of farming practices on local communities
- Access to education and healthcare in cocoa regions
- Risk:
- Community opposition to business operations
- Social unrest affecting production areas
- Opportunity:
- Community development initiatives fostering goodwill
- Collaborative projects enhancing local infrastructure
S4 Consumers and End-users
- Impact Materiality:
- Health and safety of food products
- Transparency in labeling and sourcing
- Risk:
- Loss of consumer trust due to unethical practices
- Decline in sales from negative perceptions
- Opportunity:
- Growing market for ethically sourced and healthy products
- Enhancing brand loyalty through transparent practices
G1 Business Conduct
- Impact Materiality:
- Ethical business practices and anti-corruption measures
- Compliance with industry standards and regulations
- Risk:
- Legal penalties from non-compliance
- Damage to reputation from unethical behavior
- Opportunity:
- Building a trustworthy and reputable brand
- Attracting investors through strong governance
G2 Management and Control
- Impact Materiality:
- Effective risk management and internal controls
- Transparent decision-making processes
- Risk:
- Poor governance leading to strategic failures
- Inefficiencies from inadequate management practices
- Opportunity:
- Improved operational efficiency and accountability
- Enhanced investor confidence through robust governance
Stakeholder Interview Summaries
Consumers
- Demand for ethically sourced and fair-trade products
- Concerns about product health and safety
- Preference for transparent labeling and sourcing information
- Desire for environmentally friendly packaging
- Willingness to pay premium for sustainable products
Customers (Retailers)
- Requirement for consistent supply of high-quality cocoa
- Interest in sustainability certifications (e.g., Fair Trade, Rainforest Alliance)
- Need for transparency in supply chain practices
- Demand for environmentally friendly packaging options
- Preference for partners with strong CSR initiatives
Employees
- Importance of fair wages and safe working conditions
- Desire for training and development opportunities
- Interest in company’s sustainability and CSR efforts
- Need for a diverse and inclusive workplace
- Concerns about job security and company’s long-term sustainability
Supply Chain Partners
- Requirement for sustainable sourcing practices
- Interest in long-term partnerships and stability
- Need for compliance with environmental and social standards
- Demand for transparency and traceability in supply chain
- Opportunities for collaboration on sustainability initiatives
Cocoa Producers
- Concerns about fair pricing and market stability
- Need for support in adopting sustainable farming practices
- Interest in training and capacity building
- Desire for access to better infrastructure and resources
- Concerns about climate change impacting cocoa yields
Other Raw Material Producers
- Interest in sustainable sourcing of materials like sugar, packaging
- Need for efficient resource use and waste management
- Desire for fair trade practices and equitable pricing
- Concern about regulatory compliance and environmental impact
- Opportunities for innovation in sustainable materials
Financial Providers (Investors, Banks)
- Focus on company’s sustainability performance and reporting
- Interest in risk management related to environmental and social factors
- Desire for transparency and accountability in governance
- Consideration of sustainability in investment decisions
- Opportunities for funding sustainable projects and growth initiatives
Local Communities
- Impact of farming practices on local livelihoods
- Access to education and healthcare facilities
- Employment opportunities and fair labor practices
- Environmental preservation and reduced pollution
- Support for community development projects
Regulators and Governments
- Compliance with environmental and social regulations
- Enforcement of labor laws and fair trade standards
- Incentives for sustainable business practices
- Monitoring of supply chain transparency and ethical sourcing
- Collaboration on sustainability initiatives and reporting standards
NGOs and Advocacy Groups
- Promotion of fair trade and ethical sourcing
- Monitoring of environmental and social impact
- Advocacy for workers’ rights and elimination of child labor
- Partnership opportunities for sustainability projects
- Demand for transparency and accountability in reporting
Shareholders
- Interest in long-term financial performance and sustainability
- Demand for robust risk management strategies
- Desire for transparent and regular sustainability reporting
- Support for initiatives that enhance brand reputation
- Focus on governance practices and ethical business conduct