INTRODUCTION

This spreadsheet provides an updated version of the Sustainable Coconut Charter - The Sustainable Coconut Charter V2. The updated
1 version is drafted incorporating comments in the public revision process of the Coconut Charter that happened between Oct 7th and
Oct 27th 2024.
This has two tabs. The first tab provides the CORE principle & ambitions, and the second tab covers the SUPPLY CHAIN principles &
2
ambitions for the sustainable coconut with goal statement for each of them.

3 The 'supply chain' expectation is an addition to the previous coconut charter.

The CORE principles & ambitions has three impact areas

- Economic,
4
- Social,
- Environmental

The SUPPLY CHAIN principles & ambitions has four impact areas -
- Governance,
5 - Chain of Custody,
- Partnership for Active Implementation,
- Reporting/assurance

6 Both CORE and SUPPLY CHAIN principles & ambitions have goal and rationale to help understand their importance

COLUMNS EFG: These columns are currently empty will be further elaborated when drafting the assurance system based on the charter
7
the charter setting levels of performance and expectations to meet compliance levels with the sustainable coconut charter.

The purpose of the Charter is to create an industry aligned market transformation system by:

- Outlining areas of focus, principles and outcomes that should be expected from industry's sustainable practices in coconut supply
chains based on coconut supply chain's unique conditions and multi-stakeholder consultation.
8 - Harmonizing buyers’ requirements and align metrics for supply chain partners.
- Improving companies governance and transparency in coconut supply chains.
- Developing an assurance system based on the charter's principles and ambitions truly enabling market transformation in the sector
and helping companies verify and recognize their sustainability practices for coconut.
- Streamline action towards meaningful pre-competitive collaboration and mutually recognized, robust sustainability programs.
 CORE CORE
Expectations
Principle & Ambitions
EXPECTATION LEVEL
Impact Goal Pinciple & Ambition Rationale
(To be developed during the assurance system drafting process)

The farmers are receiving lower coconut yields in the recent years than what they expect.
Zainol, F.A. et al. (2023) report that the coconut yields on farms are 33 to 84% less than
1.1. Enhancing good
anticipated harvest because of low quality planting materials, poor agronomic methods,
agriculture practices and
climate pressure and biotic variables. The low productivity and yield are combined with
improve productivity farmers' limited technical know-how. It is essential to support farmers increase productivity
and re-invest in their farms to break poverty traps without compromising the environment.

Coconut business contributes to social and economic well-being of local farmers by providing
food, and employment opportunities (Zainol, F.A. et al., 2023). However, with the reduced
yields, the livelihoods are at risk. For example, Danida Green Business Partnerships (DGBP)
1.2. Improving financial
IMPACT # 1: capacity, access to finance,
reports that the coconut farmers are usually poor and about 50% of 3.5 million farmers in
the Philippines have been living below poverty line (<$2 per day). Most of these farmers are
Economic Achieving increased
and market smallholders who cultivate less than four hectares of land. A lack of funds to invest back into
the farm; know-how to maximize farm productivity, coconut yield, and quality
smallholder farmers' improvement; strengths of collective bargaining; access to market; and suitable financial
service lead to poor agriculture practices.
Income, economic opportunities,
income and subsequently
livelihoods, 1.3. Rejuvenating farms by It is estimated that up half the world’s coconut trees are senile, and up to 80% of coconut
their livelihoods trees are over 32 years old in Southeast Asia leading to low yields and incomes. Some
and economic replanting and replacing
replanting are done with poorly selected materials, without cutting down the old trees (see
unproductive coconut trees,
Zainol, F.A. et al., 2023).
opportunities and improving farm health
and safety

In many rural areas, poor infrastructure and access to technologies for planting, inputs
management, monitoring insects and pests, harvesting, market information or even
processing limits farmer's abilities to create value and farm as a business. There is a lack of
reliable information and financial services to adapt technology (Wijekoon, R., 2021). In
1.4. Increasing access to
addition, farmers do no have easy access to market information and outreach, and the
technology
online marketing of products at farmers level is still inadequate. In absence of these,
farmers have not been fully engaged with buyers as well as extension services to benefit
them, and maximize benefits.

International Labor Organization of United Nations outlines agriculture as one of the most
hazardous occupations worldwide with harvesters and farm processors with the highest
2.1 Assuring farmers health frequency and fatality rates of injury. With dangerous harvest and dehusking processes
and safety observed all across coconut supply chain mixed with exposure to pesticides and other
agrochemicals constitutes a major occupational risk which may result in poisoning and death
and, in certain cases, work-related cancer and reproductive impairments.
Impact #2:
Social In many countries, coconut farmers are smallholders. Livelihoods Funds report that 80% of
coconut farmers in Davao, Philippines are smallholders with less than 2 hectares of land, and
Protecting fundamental 2.2. Protecting farmers rights
they are engaged in decades of monocropping and intense farming and work in their farms
Social capacity human rights, and without any holidays. Moreover, the small holder farmers' land rights is contested in some
countries, where farmers face challenges to own, occupy, use and administer formal and
and security preventing child labor and customary rights.
forced labor in coconut
production and processing
Coconut farmers face shortage of workers and the wage rate is usually high (Zainol, F.A. et al.
2.3. Ensuring fair recruitment 2023). In addition, there are practices of wage difference between men and women
of workers (Pathiraja, P.M. et al. 2010), where women are paid less than men. Similarly, the use of child
labor is in practice as a means to meet the family's economic needs (DOL).

Youths are gradually moving out of coconut farming, they are demotivated to work in the
2.4. Enhancing youth coconut production fearing their lives to be trapped in vicious circles of poverty. Decades
capacity and engagement in long public authorities surveys, consultations and research are documenting youth exile
coconut farming while showing that farmers need not be poor with sufficient level of education and
awareness to opportunities on coconut farms.

3.1. Protecting forest and Deforestation in coconut landscapes has been reported in high-biodiversity lowland coastal
other natural ecosystems in forests where coconut cultivation is a key land use. A study (Eddy, S., et al. 2021) conducted
coconut production and in Sumatra reports three major drivers of deforestation and forest degradation i.e., land
processing (no- clearing for agriculture, coconut plantation, and aquaculture. The deforestation has
deforestation) contributed to degraded biodiversity and reduced wild life and birds.

IMPACT # 3: Climate change has already started impacting coconut farming. A study (Appelt, J.L et al.,
2023) projects that about 127,000 ha of current coconut farms are likely to be affected by
Environmental Protecting ecosystems, soils changes in precipitation and longer dry seasons in insular part of Southeast Asia, reducing
3.2. Developing climate
coconut yields and displacement of cultivation areas in the region. This, in turn, will add
and biodiversity in coconut resilience farms and farmers
pressure on biodiversity conservation. Good agricultural techniques, enhanced irrigation
Forest plantations and mitigating coupled with replanting with more adequate varieties is a good way to improve climate

protection, and climate change impacts for resilience.

Usage of fossil fuel such as coal, oil, natural gas and biomass in coconut processing for
coconut farmers
climate resilient 3.3. Strengthening energy machinery and plants produce greenhouse gas emissions. Replacing such energy sources
efficient coconut processing with improved biomass or other renewable energies can yield significant emissions
coconut reduction, savings and energy efficiency at processing level.
With increasingly senile trees and inadequate agricultural practices, soil health and farm
ecosystem are degrading resulting low yield and depletion of soil carbon. In addition, on-
3.4. Including low carbon farm residue is one of the sources of carbon emissions in coconut production. Moreover, the
and regenerative agriculture farmers use coal and fossil fuel. Regenerative agriculture principles like intercropping, crop
principles rotation, increasing use of biological amendments, and reduced use of persistent chemical
pesticides and fertilizers are supporting both low carbon, soil health and biodiversity while
increasing yields
 SUPPLY CHAIN SUPPLY CHAIN
Expectations
Principle & Ambitions
EXPECTATION LEVEL
Impact Goal Principle & Ambition Rationale
(To be developed during the assurance system drafting process)

1.1. Developing policies

Transparent policies and commitments enable to mobilize organizations and help
and commitments in line
manage and measure compliance responding to stakeholders requests and the
IMPACT #1 Enable sustainability with the core expectations
increasing need for sustainable coconut products. Hence, organizations are
management in coconut of the sustainable coconut expected to develop transparent policies and commitments for coconut products.
charter
supply chains through
Governance & good and transparent
Transparency governance
An effective governance requires distribution of rights and responsibilities among
1.2. Developing adequate different stakeholders, including board of directors, managers, teams and
sustainability governance stakeholders in coconut value chain. Developing adequately resourced sustainability
structure governance structures can help make implementation of commitments and policies
possible.

Managing sustainable supply chains involves identifying, visualizing, and

understanding the various components, processes, and stakeholders within a supply
chain. It is a crucial tool for creating transparency, gathering key sustainability
2.1. Mapping for supply
information to enable an organization to manage its supply base and enable truly
chain compliance sustainable supply chains. It helps organizations identify, manage, and improve
various aspects of their supply chain to align with sustainability goals, reduce risks,
and enhance overall performance.

Enhance supply chain

traceability through One of the key challenges to many buyers and processors looking to advance on
IMPACT #2 sustainable and 2.2. Improving traceability their sustainability journey is limited traceability – not knowing where the products
originated – which limits the opportunity for downstream players to support supply
efficient sourcing, and transparent supply
chain improvements. Enhancing traceability enables buyers and processors to
chain mitigate risks in supply chains, particularly in relation to farmer livelihood and long-
processing, production
Chain of Custody term supply, including responsible use of chemicals, laborers, and animals.
and other related value
chain strategies for
greater transparency. Organizations involved in agricultural supply chains generally face supply chain risks,
and at least 89% of the companies have experienced it in the last five years (Vicente,
2023). The regulatory expectations for due diligence and risk monitoring practices in
2.3.Practicing risk
supply chains is increasing globally. Supply chain risk management, supply chain
assessment and due
segmentation and due diligence practices are an integral part of organization's
diligence overall risk management strategy and provide a layer of oversight, ideally reducing
the likelihood and/or severity of risk exposures and helping to build a baseline
towards sustainable supply chains.

Supply chain engagement plan is an important practice to ensure sustainability of

IMPACT #3 3.1 Implementing effective coconut production, processing and sourcing. An engagement plan across a
Ensure partnership supply chain engagement segmented supply chain is an essential tool to address issues identified in risk
plan assessments and due diligences.
between actors along
Partnerships the supply chains to
for active meet the charter's Research and practices have shown that industry players are poorly equipped to
principles and tackle alone the underlying systemic sustainability issues in the coconut sector
implementation ambitions
3.3 Participating to alone. Collaborative initiatives addressing capacity gaps and working collaboratively
collaborative initiatives to solve pre competitive issues helps demonstrate organization's commitment to
responsible and ethical practices while fostering innovation and long-term
sustainability in the industry.
Many coconut companies in coconut supply chain have made commitments to
Establishing regular eliminate deforestation, respect human rights, ensure child/forced labor free supply
Impact #4 monitoring and
4.1. Practicing transparent
chain. However, in absence of public disclosure, monitoring of the commitments,
disclosure & reporting and reporting of the progresses, the stakeholders do not get awareness on the good
reporting in relation to
practices of the company.
Reporting & the coconut charter's The reporting of the sustainable practices in coconut industry is important.
core and supply chain 4.2. Substantiating claims However, the reporting are supposed to be substantiated with the valid methods
Assurance expectations and verification. In absence of them, the companies will have challenges to get the
acceptance of claims as the credible information.