Nestlé and ofi Launch Large Agroforestry Partnership for Cocoa Supply Chains

Global Climate Risks and EU Regulations Are Reshaping the Cocoa Industry: Nestlé and ofi Launch Largest Agroforestry Partnership to Date

Rising global climate risks and tightening EU sustainability regulations are reshaping the supply chain model of the cocoa industry. Recently, food giant Nestlé and ingredient supplier ofi (olam food ingredients) jointly announced their largest-ever global agroforestry partnership, spanning three major producing countries - Brazil, Côte d’Ivoire, and Nigeria. Over the next five years, the initiative aims to train 25,000 farmers in climate-smart agriculture to achieve emissions reduction, land restoration, and increased industry resilience.

This partnership is not only a corporate response to climate change, but also a comprehensive supply chain transformation in response to evolving regulations and consumer expectations.

Carbon Neutrality, Regenerative Agriculture, and the Era of Deforestation-Free Commodities

Cocoa is one of the crops most dependent on tropical forests and has long been associated with deforestation risks. According to the World Resources Institute (WRI), roughly a quarter of forest loss in Côte d’Ivoire and Ghana is linked to cocoa cultivation. To address this structural issue, agroforestry has emerged as a widely endorsed solution: by interplanting native tree species in cocoa farms, soil carbon storage can be enhanced, biodiversity improved, and climate resilience strengthened.

Nestlé and ofi have made this the core strategy of their collaboration. By 2030, they plan to plant 2.8 million trees and convert 72,000 hectares of land into agroforestry systems. The project aims to reduce more than 1.5 million tonnes of CO₂ equivalent by 2055. These outcomes will be verified by third parties and tracked through AI-powered carbon monitoring and ofi’s AtSource digital footprint calculator.

A Strategic Response to the EU Deforestation Regulation (EUDR) and Net-Zero Pressures

This collaboration goes beyond voluntary carbon reduction - it's a strategic response to the EU Deforestation Regulation (EUDR), which will come into full force in December 2024. The regulation requires companies to ensure that imported cocoa, coffee, timber, and other commodities are not linked to deforestation after 2020 and must be traceable to the smallholder farm level.

This represents an unprecedented compliance challenge for global cocoa supply chains. Andrew Brooks, Global Director of Sustainability for Cocoa at ofi, noted: “We are putting farmers at the center of our response to climate change.” His comments reflect a growing recognition that unless farmers are included in compliance systems and equipped with new production methods, companies risk falling short of EU requirements - and potentially losing access to European markets.

Thus, the partnership focuses not only on ecological transformation but also on farmer training, compliance support, and financial incentives. Farmers who meet sustainability criteria will receive direct payments as rewards for tree planting and maintenance - helping build a virtuous cycle where farmers are willing to participate, companies can trace progress, and consumers can place their trust in the supply chain.

ESG Investors and Consumers Are Raising the Bar

This initiative also highlights the pressure on brands and the financial logic behind ESG trends. Nestlé, which has scaled up its “Nestlé Cocoa Plan” and pledged to reach net-zero by 2050, needs to demonstrate tangible progress at the source. Meanwhile, ofi - one of the world’s largest cocoa ingredient suppliers - is advancing its “Cocoa Compass” and “Choices for Change” sustainability platforms to position itself as a strategic partner for brands like Nestlé, Mars, and Mondelez in fulfilling ESG commitments.

Notably, agroforestry carbon credits and regenerative agriculture practices are increasingly being factored into carbon markets and impact investing. The carbon tracking system developed by ofi’s internal carbon team could potentially serve as the basis for future carbon credits, creating new financial incentives for companies.

Lessons for Asia: From Supply Base to Transformation Driver

Although the current partnership is focused on Africa and Latin America, its model holds significant implications for Asian companies and governments. Whether in Indonesia and Malaysia's palm oil sectors, Vietnam's coffee industry, or Taiwan-based brands and raw material buyers, there is a growing need to engage in agroforestry partnerships and regenerative agriculture to strengthen supply chain compliance and carbon risk management.

This also raises a critical question: who should bear the cost of transitioning to sustainable agriculture? Brands? Consumers? Governments? Carbon markets? The Nestlé–ofi partnership offers one possible answer: only through cross-sector collaboration and joint investment across the value chain can we strike a balance between forest protection, supply chain stability, and climate goals.