This Easter, people will indulge in a significant percentage of the eight million tonnes of chocolate consumed globally each year.

While it’s one of the world’s favourite confections, the production of chocolate can cause deforestation and there are often questions surrounding the ethics of the labour supply chain.

A global scorecard, which has the increasing support of manufacturers, is gaining momentum – giving consumers greater transparency on how their chocolate is made.

John Dumay, a professor of Accounting and Corporate Governance at Macquarie University in Sydney, is part of the team that devises the Chocolate Scorecard each year – and, in doing so, hopes to transform the chocolate industry.

When he talks about the scorecard, Dumay likes to emphasise that it’s more about “name and fame, rather than name and shame”, acknowledging the engagement that he and his colleagues receive from the chocolate industry.

“We couldn’t do this without the cooperation of the companies,” he says.

“I think that’s a really positive thing, working with the companies to ensure that improvements are being made, and we now have companies putting their hands up and wanting to join.”

Devising the Chocolate Scorecard

Now in the process of collecting data for a sixth edition, due to be released at Easter, the scorecard team aims to provide chocolate lovers around the world with clear information on the ethical standards of the products they eat. It ranks producers against six criteria – from traceability and transparency to the use of pesticides, child labour and the impact on deforestation.

The scorecard was created out of the recognition that Ghana and the Ivory Coast – the two largest cocoa producers, responsible for two-thirds of the world’s supply – are suffering major deforestation.

From there, groups looking at other aspects of the chocolate supply chain joined the project and expanded the scorecard into a more comprehensive look at the integrity of global chocolate production.

Coordinated by non-government organisation Be Slavery Free in collaboration with academics at Macquarie University, the University of Wollongong and The Open University in the UK, the most recent scorecard saw the participation of 63 chocolate producers from all over the world, an increase on the 43 from the fourth edition. These producers represent about 90% of global production.

The scorecard is developed from a questionnaire sent to all participating companies, created from their feedback and that of subject matter experts.

There is engagement with the companies during the survey period and they also receive their scores before the scorecard is published, giving them an opportunity to clear up any misunderstandings in the data.

Dumay says this engagement is not a greenwashing opportunity, but rather a process that ensures that, when published, the scorecard is as accurate as possible.

“We have to be credible and transparent because if we get something wrong it is disastrous for everybody,” he says.

Which chocolate brands are ethical?

In the fifth edition of the scorecard, among medium and large producers Tony’s Chocolonely, Ritter Sport and HALBA all earned a ‘green bean’. Smaller producers who scored similarly are Original Beans, Beyond Good, Chocolatemakers, Choba Choba and Elements Truffles.

Dumay says the scorecard is having a positive impact on producers and retailers, and reaching more consumers who are making informed decisions on what they buy.

“Some of the retailers, for example, have seen the scores and have come to us and asked how they can improve,” he says. “At their request, we actually put them in touch with the producers who score well, while suppliers of raw materials have switched from not knowing where their cocoa is coming from to improved traceability.”

Among the producers, global giant Nestlé has often received criticism for a perceived reluctance to disclose the impact of child labour and forced labour in its supply chain.

“Now we are seeing more clearly some of the positive improvements,” says Dumay. “They have something called the income accelerator program, which has been quite successful in getting kids into school and off the farms, thanks to an increase in the farmer’s income.

“It won’t solve 100% of the problem, but it’s considered to be a really good program.”

Dumay doesn’t claim this is solely due to the Chocolate Scorecard. Rather, he says the scorecard is part of the momentum for better supply-chain practice in the industry, where 89% of scorecard participants now have a commitment to traceability. This is an increase of 27% over two editions of the scorecard.

Even so, while chocolate is a multi-billion-dollar industry many cocoa farmers still live in poverty. One-third of the companies who responded to the questionnaire claim they are “paying at least some of their farmers a price which will allow a farmer’s household to earn a living income”. Only six out of the 63 participants in the last index “claim they are paying 100% of the farmers enough for a decent living”.

Measuring what matters

However, Dumay is optimistic that the industry is moving in the right direction and that the participation of accountants, and the use of their skills, is key.

“Accounting is about making people accountable for financial performance,” he says. “With the scorecard, what we are doing is making people accountable for their social and environmental performance.

“The scorecard is an example of ESG [environmental, social and governance] accounting on steroids, and is a wonderful demonstration of how accountants can go in and assess, measure, rank, rate and disseminate.”