As part of the Rainforest Alliance 2020 Certification Program we are implementing two financial requirements for the buyers of Rainforest Alliance Certified commodities: The Sustainability Differential and Sustainability Investments, traditionally referred to as ‘premium’ in certain certification programs.
The Sustainability Differential (SD) is a mandatory cash payment to the farm certificate holder. It is intended to be transferred in full to group members in case of a group certificate holder and to be used in full for worker benefits in case of a medium to large farm certificate holder. Sustainability Investments (SI) are defined as payments to the farm certificate holder in cash or kind with the specific purpose of helping them meet the Farm Requirements of the Sustainable Agriculture Standard and continuous improvement at the farm certificate holder level. These will be based on an investment plan drawn up by the farm certificate holder.
Auditing against the new Rainforest Alliance 2020 Certification Program will begin in July 2021. Buyers sourcing from farm certificate holders that have transitioned to the new 2020 standard, will be required to make SI and SI payments based on the following timelines.
Cocoa, coffee and hazelnut
In the cocoa, coffee and hazelnut sectors the industry norm of paying a premium is already in place. First buyers will need to start recording SD and SI payments in the Rainforest Alliance traceability system from the date volumes certified against the new Rainforest Alliance 2020 standard are transacted in the system. In the case of cocoa, coffee and hazelnut, this first buyer is the initial supply chain actor legally owning the certified product after the farm certificate holder. The recorded SD and SI value will need to reflect the agreement made between farm certificate holder and their first buyers and payments will need to be done according to the terms agreed. The transition period for all farm certificate holders to the new standard is July 2021 to June 2022. Therefore, all buyers of Rainforest Alliance certified cocoa, coffee and hazelnut, will be required to pay SD and SI for new Rainforest Alliance certified volumes from July 1, 2022 onwards without exception.
Herbs & Spices
The timeline for implementation for herbs and spices, including rooibos, is aligned with the implementation of the new 2020 UEBT/Rainforest Alliance Herbs & Spices requirements. Farm auditing against the new 2020 UEBT/Rainforest Alliance Herbs & Spices requirements will be possible from July 2021 and mandatory from January 2022 onwards. We aim to have all farm certificate holders certified against the new 2020 UEBT/ Rainforest Alliance Herbs & Spices requirements by December 2022 latest. First buyers will be required to make and record payments on SD and SI in the Rainforest Alliance traceability system from the date volumes certified against the UEBT / Rainforest Alliance 2020 standard are transacted in the system. Therefore, all buyers of UEBT/Rainforest Alliance certified Herbs & Spices, will be required to pay SD and SI from January 1, 2023 onwards, without exception, since all certified farms would be on the new 2020 requirements by that date.
For Rainforest Alliance certified bananas SD and SI will need to be applied at the next available full contracting cycle after farm certificate holders have transitioned to the new Rainforest Alliance 2020 standard. Practically speaking, since the transition period for banana growers is over an 18 months’ period (July 2021 – December 2022), and the industry norm appears to be that of annual contracts by calendar year, SD and SI payments are mandatory for volumes entering the supply chain January 1, 2022 onwards, with the latest date of implementation being December 31, 2022. Therefore, all buyers of Rainforest Alliance certified bananas, without exception, will be required to pay SD and SI from January 1, 2023 onwards.
Other fresh fruit, processed fruit (fruit juices, coconut oil), vegetables, and flowers
The transition period to the new 2020 Rainforest Alliance standard for farm certificate holders for other fresh fruit, processed fruit (fruit juices, coconut oil), vegetables, and flowers is July 2021 to June 2022. Reflecting the norms of annual contracting cycles in most of these industries, all buyers of Rainforest Alliance certified fresh fruit, processed fruit, vegetables, and flowers will be required to pay SD and SI in the next available contracting cycle after December 31, 2021 for volumes certified against the 2020 standard, with the last date for implementation being December 31, 2022. Please note traceability solutions will become available for fresh fruit, vegetables, and flowers in 2021.
Given the unique nature of the tea supply chain, as well as the existence of the auction system in many producing countries, we are exploring mechanisms to facilitate annual payments of SD and SI by brand owners to farm certificate holders based on the volumes reported in the Rainforest Alliance MultiTrace traceability system. The implementation timeline for tea builds in the need to have end-to-end traceability of certified volumes in MultiTrace as well as being able to generate at least 12 months’ worth of data in order to facilitate an annual payment mechanism. Therefore, SD and SI payments in tea will be required to be made 1st April 2023 onwards based on volumes sourced in the previous 12 months from farms certified under the 2020 Rainforest Alliance standard.
Sector guidance on Sustainability Differential and Sustainability Investments
We will make detailed guidance per sector on traceability, assurance and reporting requirements available by the end of Q1 2021. In the meantime, if you have any questions or require additional support, please contact your account manager.
Photo credit: Sydelle Willow Smith