We do not expect substantial shares of our supply chains to be incompliant. Multiple factors indicate low rates of incompliance risks. Our track record in certified products enables not only traceable supply chains but also high standards when it comes to adherence to local laws, safeguarding protected areas and anticipating deforestation through counter measures such as afforestation and agroforestry systems. All certified products in our portfolio are third party audited and verified, showcasing a good indicator for regulatory compliance. However, not all products are certified, and we are neither relying on certification as sole proof of compliance nor as proof of no deforestation.
Deforestation-freeness will be assessed with precise satellite imagery and drone footage, which will prove that in almost all cases plantations have existed prior to the cutoff date in 2020. This is supported by the fact that many crop plants including coffee trees need to mature at least 5 years to bare harvestable fruits. Additionally, the incompliance risk regarding legality of production will be assessed based on various sources such as questionnaires and external databases to verify adherence to local laws.
Over the course of the past months, we have reviewed many suppliers and supply chains. As we are mostly working with smallholder producing organizations, this results in analyzing multiple thousand land plots. So far, we can confirm not to have found major issues with deforestation. Nevertheless, given the vast number of land plots under examination and the remote analysis approach, some deforestation risk alerts are inevitable due to the inherent nature of our supply chains. Whenever these risks are identified, they will be verified to exclude potential false positives. Only if a false positive can be excluded clear measures are following to assess whether the risk can be mitigated or in extreme cases producers need to be excluded or business relations need to be ceased.