To become carbon positive by 2025, we need to understand exactly how much carbon we have to reduce or offset. This also enables us to pass on our achievements to our customers by supporting them to calculate how much carbon they can save by sourcing our cocoa and chocolate.
We are looking at the carbon footprint created by our own operations (scope 1), the carbon footprint generated by the energy we use (scope 2), as well as the carbon footprint of our entire supply chain (scope 3) which also includes the production and processing of all our sourced raw materials and related land use changes (LUC).
This is why in 2018/19 we continued the pioneering work with our partner Quantis to develop the first carbon footprint assessment for the cocoa supply chain. It is only when we fully understand where our biggest impacts lie that we can prioritize our efforts. The big step forward in this assessment is the use of satellite data in combination with our farm data to calculate the carbon impact of land cleared for agriculture for individual cocoa farms. This innovative assessment replaces average country data with farm-specific data. This will allow us to assess the carbon footprint of cocoa in our supply chain much more precisely and formulate effective strategies on how to reduce it. The aim is to make this assessment publicly available in early 2020 and we encourage the cocoa and chocolate industry to use this as the industry standard.
Another big step forward in becoming carbon positive is the work we are undertaking with our partner The Gold Standard Foundation. Through this collaboration we are the first company to develop a methodology to verify how much carbon emissions can be reduced and removed at farm level and in cocoa growing communities. We are formulating the guidelines for carbon insetting projects, such as tree planting, in scope 3 of cocoa supply chains.
An additional major contributor to our carbon footprint are our dairy ingredients. Therefore, we have been working with dairy suppliers to harmonize methodologies to measure carbon emissions on dairy farms and processing facilities. These activities allow us to better manage and account for carbon footprint reductions in the dairy supply chains.
This year also marked the launch of a pilot to test the viability of Biochar. This consists of the residue of cocoa shells which have been used to generate energy in our factories. In addition the use of Biochar supports the offsetting of our carbon footprint. We are investigating the possibility of extending the use of Biochar as a fertilizer to our Farm Services business, to improve soil quality and make cocoa production more carbon neutral. Further, Biochar can be used by dairy suppliers for cow feed production, to reduce methane production.
In 2018/19, 17 of our 62 factories are now fully powered by renewable energy. Our Kagerod factory in Sweden achieved carbon neutrality in 2019. Our efforts to reduce our carbon footprint have also been recognized by CDP, an independent organization which assesses the carbon reduction actions of industry every year. In 2018 we were awarded an A- for our activities to reduce our carbon footprint, putting us in the top 6% of the over 7,000 assessed companies.
In order to become deforestation free and forest positive by 2025, we are working within our own direct supply chain as well as with suppliers and governments across our indirect supply chain to introduce traceability as a matter of priority. Approximately half of our sourced ingredients by volume are cocoa products and half are non-cocoa products, such as sugar, dairy, and vegetable oils.
In order to become forest positive, we have to start by eliminating deforestation from our supply chain. In 2017 we signed the Cocoa and Forests Initiative (CFI), a multi-stakeholder initiative dedicated to ending cocoa farming induced deforestation in Ghana and Côte d’Ivoire. It includes a commitment to deliver traceability in our direct cocoa supply chains in these two countries. In line with this commitment, we have mapped 47,182 cocoa farms in our direct supply chain within 25 kilometers of a protected forest area in Côte d’Ivoire and Ghana.
We have so far distributed over 1.8 million young cocoa seedlings in Côte d’Ivoire and Ghana. Furthermore, we have distributed almost 750,000 shade trees for replanting in Côte d’Ivoire and Ghana.
Furthermore, we are not only eliminating deforestation from our supply chain, we are also committing to forest restoration. The ISLA project in Côte d’Ivoire helps to protect the forest reserve of Cavally, a forest of high biodiversity value. It aims to sensitize the local community on sustainable natural resource management. Together with the Dutch Sustainable Trade Initiative (IDH), Barry Callebaut has supported several monitoring missions by the Wild Chimpanzee Foundation and the Ivorian national forestry agency SODEFOR in the area. These missions have helped to protect 6,280 hectares of primary forest and restore 3,800 hectares of forest by removing illegal cocoa and allowing natural forest regeneration. Furthermore, in order to prevent the infiltration of cocoa farms into Cavally, ISLA aims to make cocoa production outside of protected areas more sustainable and productive.
Our measured impact
Due to our combined carbon reduction efforts, our corporate CO2 equivalent (CO2e) footprint decreased from 9.10 million tonnes to 8.49 million tonnes in fiscal year 2018/19. This represents a reduction of –6.7%, despite an increase in production. The main drivers of this achievement are the reduced CO2e emissions from land use change, reduced CO2e intensity in factories and the reduced CO2e intensity in dairy products. The CO2e intensity per tonne of product also decreased from 4.45 to 3.92, and with the additional contributions from scope 3 insetting projects, was further reduced to 3.88. This is a decrease of –12.8% compared to the previous fiscal year.
The percentage of sourced raw materials demonstrated not to be contributing to deforestation is 37.6%. Looking ahead, we will continue to utilize our heat map to identify where the sourcing of agricultural raw materials poses a high risk of causing deforestation. This valuable data will help us to work with suppliers to improve traceability and support out partnerships. Through our support of the ISLA project 3,800 hectares of forest were regenerated.