Navigating EUDR: compliance and beyond | Cocoa

Supporting businesses with regulatory compliance and advancing sustainability.

Why sustainability legislation matters

Sustainability legislation has expanded rapidly in recent years. Increasingly, addressing issues such as deforestation and human rights risks within supply chains is no longer a voluntary choice by responsible businesses but a legal obligation for all. New regulations have the potential to accelerate the transition to sustainable business practices and deliver positive impacts for people and planet at scale. But they also bring challenges.

If not carefully implemented, such legislation may increase administrative burdens without driving meaningful change on the ground and may disproportionately affect producers, further entrenching existing supply chain inequalities. There is a risk that a strong focus on compliance may cause businesses to focus solely on their own sourcing footprint, rather than encouraging broader, more holistic industrywide progress.

Credible voluntary sustainability standards (VSS) have been laying the groundwork for companies to implement responsible practices for years, offering tools, frameworks, and collaborative approaches that help businesses navigate this evolving regulatory landscape.

With decades of on-the-ground experience, credible VSS are uniquely positioned to address deforestation and land conversion. They provide the strongest available evidence of impact and effectiveness, making them strong partners for businesses aiming to meet new deforestation- and conversion-free (DCF) requirements while building more resilient and responsible supply chains.

Crucially, these systems go beyond compliance. They help businesses proactively tackle broader environmental and social issues, creating long-term value and preparing them for future regulations.

This case study is part of a series that looks at how credible VSS are responding to one of the most important legislative developments: the EU Deforestation Regulation (EUDR), which aims to prevent products associated with deforestation from being sold on the EU market.

By leveraging proven standards, facilitating reliable data exchange, and managing risk across complex supply chains, credible VSS are critical in helping businesses meet DCF requirements. These case studies show how credible VSS drive not only compliance but also meaningful transformation across sectors and supply chains.

The cocoa supply chain

Cocoa is produced from the seed of the tropical Theobroma cacao tree and is the key ingredient in chocolate products enjoyed by millions of consumers across the globe. Cocoa production is concentrated in West Africa, particularly Côte d’Ivoire and Ghana and mostly grown by smallholder farmers. It is a primary livelihood source for approximately six million farmers around the world.

The cocoa sector faces several significant challenges. Rising global demand for the raw commodity and economic pressures on farmers have resulted in rapid expansion of cocoa production in key tropical forest zones of the world. Intense cocoa production and the need to replace aging trees has led to expansion of production into forested zones. Cocoa farmers' livelihoods are increasingly at risk due to deforestation driven by economic pressure, and climate change, which is causing declining productivity and profitability.

Yellow cocoa pods growing on cocoa tree

Key players and credible VSS

Various sustainability standards, certification systems and collaborative initiatives aim to improve the livelihoods and incomes of cocoa farmers while enhancing production practices. Two prominent international VSS active in the sector are the Rainforest Alliance and Fairtrade International.

Other standards include ISO 34101 – the first sustainability standard for an agricultural product adopted by the International Organization for Standardization (ISO) – and the emergent African Standard for Sustainable Cocoa (ARS-1000). Governments in both Côte d’Ivoire and Ghana have made ARS-1000 mandatory.

Beyond these standards, several groups and alliances are working to improve sustainability and transparency across cocoa supply chains. For example, the World Cocoa Foundation plays a central role as the primary multi-stakeholder body focused on sectorwide governance and sustainability. Other initiatives include the Cocoa & Forests Initiative, and company-led efforts like Cocoa Life (Mondelēz International) and Nestle's Income Accelerator Program, developed in partnership with the Rainforest Alliance, among others.

Understanding the EUDR: challenges and requirements for cocoa

The EUDR applies to seven commodities, including cocoa. It requires businesses selling these products in the EU to conduct due diligence to ensure they are legally produced and not linked to deforestation or forest degradation after 31 December 2020. While aimed at driving sustainability, compliance presents some specific challenges for the cocoa sector.

What products are in scope of EUDR?

Currently, the EUDR applies to a wide range of cocoa-related products. This includes raw cocoa materials such as beans, shells, husks, and other waste, as well as processed products like cocoa paste, cocoa butter, and cocoa powder. Importantly, certain finished goods – including chocolate and other manufactured cocoa-based products – are also within scope. Unlike cocoa, some other commodities (e.g. palm oil) are limited to raw materials under the regulation. You can access the full list of cocoa-related products covered in annex 1 of the EUDR.

How credible VSS can support businesses with regulatory compliance

Credible VSS offer a range of system capabilities and strategies to support company due diligence and, in turn, regulatory compliance. However, they are not a substitute for companies’ own responsibility to demonstrate compliance with the EUDR.

For cocoa, both the Rainforest Alliance and Fairtrade International's systems can support with EUDR, ensuring certified producers and partners are well equipped to meet its requirements. Below, we summarise some key points; a more detailed overview of how each organisation supports EUDR compliance can be found on their websites:

A worker in a cocoa factory pours baskets of yellow ripe cacao pods onto a pile of bulk large cocoa

Beyond compliance

There is a risk that the EUDR and similar regulations could encourage businesses to reduce their sourcing exposure to smallholders and favour large players in an effort to reduce the cost of due diligence and mitigate risk. This could weaken businesses’ supply chain resilience and reduce incentives for smallholders to avoid land-use change and deforestation. Sustainability systems offer an effective and inclusive way to strengthen supply chains, meet corporate sustainability goals, and prepare producers, manufacturers and sourcing companies for evolving regulations.