Is your favorite chocolate brand compliant with Environmental, Social, and Governance (ESG) principles? A scorecard aims to elevate companies that toe the line.

The Chocolate Scorecard is a project of BeSlavery Free—an Australian-based organization purporting to fight against modern slavery, human trafficking, and forced and child labor. It’s in its fourth year of operation.

“We believe that all companies selling chocolate products should be able to provide the information requested in the survey,” the methodology paper said. “Consumers and investors have a right to be informed about the conditions under which chocolate is produced.”

The survey polled over 40 companies on the following six categories: traceability and transparency; living income; child labor; deforestation and climate; agroforestry; and agrichemical management. 

Its methodology paper relies on variable ESG metrics derived from rating organizations like Science Based Target Initiative (SBTi), the Carbon Disclosure Project (CDP), and the Accountability Framework (AFi).  

Last year, SBTi was accused of greenwashing. Nature Magazine found SBTi reporting with renewable energy certificates (RECs) “are unlikely to reflect real reductions of global emissions, which has the potential to compromise the alignment of SBTs with the Paris temperature goal.” 

“To acknowledge the evolving nature of the industry and the increasing performance of some companies, demonstrating how much can be achieved, we raised the scoring bar. This is particularly pertinent regarding what it takes to earn a ‘green’ (‘leading the industry’) score. As top-performing companies improve, what it takes to be considered an industry leader is also evolving,” the scorecard conceded.

As I recently noted on IWF’s blog, ESG scores are prone to error and biased—prompting corporate America to pay a hefty price for good scores: 

Even more troubling was the revelation that publicly traded companies spend an average of $220,000 and $480,000 annually to boost their ESG ratings compared to private companies (which pay between $220,000 and $480,000 annually). In contrast, investors spend an average of $175,00 to $360,000 annually to improve their standing.

Fighting child slavery is a noble cause. Nevertheless, ESG scoring will distort reality concerning bad actors where some will look good on paper, but engage in harmful practices in real life. 

Companies like Nestle and Mars Candy obfuscate terrible working conditions and human rights violations by touting ESG commitments.

To learn about flaws in ESG scoring, go HERE.