Barry Callebaut (BARN) Status Update summary

EUDR regulation overview and strategic response

• EU Deforestation Regulation (EUDR) aims to prevent imports of commodities linked to deforestation or illegal farming, requiring traceability, deforestation-free status, and legal compliance for cocoa and other commodities from January 2025.

• Compliance requires due diligence statements, risk assessments, and risk mitigation declarations, with a focus on traceability and legality of supply chains.

• The company’s Forest Positive strategy targets EUDR compliance and broader sustainability goals, including sourcing only deforestation-free products by 2025 and aligning with science-based climate targets.

Risk assessment and mitigation approach

• Sourcing countries are assessed for deforestation risk, with West African origins like Ivory Coast and Cameroon identified as high risk due to historical and ongoing deforestation.

• Non-compliance risks are both financial (product recalls) and operational (discarding mixed non-compliant volumes), driving a proactive compliance strategy.

• Forest protection is prioritized as the most effective risk mitigation, supported by literature and meta-studies.

Due diligence and traceability tools

• A three-tiered due diligence process covers country, supplier, and farm levels, with sourcing decisions based on risk assessments at each stage.

• Seven formalized tools include country and supplier risk assessments, on-farm risk assessment, deforestation monitoring (using Starling satellite technology), yield control, grievance mechanisms, and stakeholder engagement.

• All mapped farms are assessed for deforestation events post-2020, with high-resolution satellite imagery and strict thresholds for compliance.