ESG Practices in the Food Sector: Sustainable Strategies and Impacts in a Brazilian Business Model

Karla Jayme da Silva; Lucas Lehfeld

DOI: 10.22167/2675-6528-202603103

Article derived from a Final Course Work (TCC), with content based on the student’s original work and adapted to the editorial format of the E&S Magazine with the support of the ResumeAI tool, an artificial intelligence solution developed by the Pecege Institute for textual synthesis and organization.

Abstract

This study analyzed how the adoption of ESG (Environmental, Social and Governance) practices contributes to the consolidation of a sustainable business model in the Brazilian food sector. The research was conducted as a qualitative case study of a national chocolate company that implemented policies focused on environmental sustainability, social responsibility, and corporate governance. Data collection was based on documentary analysis, institutional reports, and public interviews with executives, producers, and co-founders of the company, treated as secondary sources. It was identified that the company adopted the cabruca system for cocoa cultivation, progressively eliminated plastic from packaging, participated in carbon credit projects, and ensured fair remuneration to producers, aiming for a decent income. It also implemented anti-corruption policies, compliance with LGPD (General Data Protection Law), and supply chain traceability. The results indicated positive socio-environmental impacts, such as biodiversity preservation and improved producer income, in addition to strengthening corporate reputation. However, the company has not yet achieved full profitability due to investments in sustainability. It was concluded that the adoption of ESG practices can be a strategy for competitive differentiation and an instrument for social transformation, demonstrating the viability of aligning purpose and profitability, although it requires significant investments and favorable conditions for its scalability.

Keywords: Case study; Governance; Food sector; Corporate sustainability.

1. Introduction

The contemporary corporate scenario is marked by significant transformations, driven by growing societal demands for companies from various sectors to rethink their operating models. This reevaluation seeks to reconcile economic performance with social and environmental responsibility. In the food sector, which plays a fundamental role in the Brazilian economy and has a direct impact on the environment and people’s quality of life, the need for adaptation becomes even more relevant.

In this context, the concept of Environmental, Social and Governance (ESG) emerges as an important instrument for sustainable and strategic management. It is capable of guiding organizations towards more ethical, transparent practices aligned with the Sustainable Development Goals (SDGs) established by the United Nations (UN). ESG practices have been consolidated as a benchmark for measuring corporate impact in socio-environmental dimensions, as well as for evaluating companies’ internal governance and their commitment to responsible performance.

The growing awareness of environmental degradation, social inequalities, and governance failures has intensified pressure on companies to integrate sustainability into their core strategies. For the food industry, this integration is particularly challenging but vital, given its direct link to natural resources, supply chains, and consumer health. There is a clear need to understand how businesses can transition to models that not only ensure profitability but also generate positive socio-environmental value.

This study addresses this need by investigating how ESG practices can contribute to the construction of more sustainable business models in the food sector. The research focuses on a Brazilian chocolate company recognized for its innovative socio-environmental policies. This company exemplifies a business model that combines purpose and profitability, promoting positive impact throughout the production chain, from the origin of cocoa to the commercialization of its products. Its approach, notably through the traditional agroforestry system known as cabruca in southern Bahia, demonstrates a commitment to biodiversity preservation, contributing to ecological balance and fostering fair income and the valorization of small rural producers.

The present work had as a general objective to analyze how Environmental, Social and Governance (ESG) practices contributed to the construction of a more sustainable business model in the Brazilian food sector, based on the case study of a national chocolate company, seeking to understand how the incorporation of socio-environmental and governance policies influenced value generation, corporate transparency, and the strengthening of business reputation, promoting positive impact on the production chain and the stakeholders involved.

2. Material and Methods

This work was classified as applied research, adopting a qualitative approach to the investigation. Regarding the objectives, the study was exploratory and descriptive, according to the classification proposed by Gil (2017). The choice for applied research was justified by the intention to understand and disseminate sustainable and replicable business practices in the food sector. The qualitative approach, in turn, was employed to deepen the understanding of complex phenomena, involving values, perceptions, and management strategies related to corporate sustainability.

The research strategy adopted was the single case study, as advocated by Yin (2001), which allows for the identification of aspects of change throughout the historical process, encompassing social and environmental dimensions. The empirical object consisted of a Brazilian chocolate company, selected for its recognized performance in implementing practices aligned with the principles of Environmental, Social and Governance (ESG) throughout its value chain. The study sought to understand the contribution of these practices to the sustainability of the business model and their impact on competitive positioning.

Data collection was structured in two main stages. Initially, documentary and bibliographic collection was carried out, with the systematization of information according to the three dimensions of ESG: environmental, social, and governance. This stage focused on surveying reports, articles, and institutional publications. Subsequently, empirical data collection was performed, concentrating on the qualitative interpretation of available secondary interviews, without conducting new interviews by the researcher.

The analyzed interviews were not conducted directly by the researcher, thus constituting secondary sources. Testimonies previously given by cocoa producers, collaborators, co-founders, and institutional representatives of the company were used. This material was obtained from journalistic outlets, corporate communication channels, audiovisual platforms, and podcasts, all publicly accessible. The content was collected, transcribed when necessary, and organized according to the three pillars of ESG for subsequent analytical treatment.

The literature review covered topics such as ESG practices and their application in Brazilian companies, corporate sustainability, food sector supply chains, and agroforestry management. Corporate governance and social responsibility, socio-environmental compliance, and impact certifications were also included, focusing on the studied chocolate company. To this end, books, academic articles, reports, and institutional publications were consulted, aiming to build a consistent theoretical foundation for the analysis.

The documentary analysis complemented the literature review, using institutional and public sources from the corporation. Sustainability reports, publications on the company’s official website, journalistic articles, and audiovisual content were examined. These documents provided information on the ESG practices adopted, allowing for an understanding of the social and environmental impacts of the organization’s implementation of these practices.

For the analysis of the collected data, the content analysis technique was employed, aiming to qualitatively interpret texts and discourses. The objective was to identify thematic categories related to sustainability, corporate governance, and social impact. The information was organized to address aspects such as agroforestry practices, Atlantic Forest preservation, waste reduction, decent income generation, producer training, ethical management, and the relationship with society involved in the production process.

The choice of a qualitative approach and a single case study was justified by the need to examine the integration of ESG practices into the business strategy of the chocolate company. The aim was to understand the relationship between economic performance and the generation of positive social impact throughout the production and commercial process. This methodology allowed for an investigation into the mechanisms that connected corporate performance to socio-environmental responsibility, providing subsidies for the incorporation of similar principles in other organizations in the food sector.

3. Results and Discussion

The present analysis of the results reveals how the adoption of Environmental, Social and Governance (ESG) practices is manifested in the construction of a sustainable business model in the food sector, using a Brazilian chocolate factory as a case study. The findings demonstrate that the company has integrated ESG principles into its core strategy, from the origin of the cocoa to the commercialization of the products, seeking to reconcile economic value with positive socio-environmental impact. This strategic approach has not only strengthened the brand’s reputation but also driven innovation throughout the production chain, despite the challenges inherent in sustainability investments.

The historical evolution of cocoa farming in Southern Bahia, the region where the chocolate company operates, is a fundamental pillar for understanding the context of its practices. The area, known as the Cocoa Coast, encompasses municipalities such as Itacaré, Uruçuca, and Ilhéus, and has expanded to other locations like Jaguaquara (Scaramuzzo, 2020; Dengo, n.d). Although cocoa was historically associated with Central America, recent studies indicate its Amazonian origin, present in the vegetation for over 5,300 years (Zarillo et al., 2018). The introduction of cultivation in Bahia, around 1746, was favored by the humid climate and the natural shade of the Atlantic Forest, consolidating itself as a structuring element of the regional economy (Aguiar; Pires, 2019).

Initially, cocoa production in Bahia was incipient and coexisted with other agricultural crops. However, between the 19th and 20th centuries, the agro-export model was established, characterized by monoculture and land concentration, with Ilhéus and Itabuna emerging as productive poles (Aguiar; Pires, 2019). The post-World War II economic crisis, intensified by African competition, and the spread of witches’ broom from 1989 onwards, which caused fruit rot, led to the collapse of the regional cocoa economy, driving the search for productive alternatives and tourism (Chiapetti, 2009; Neves, 2018).

Faced with this scenario, the Executive Commission of the Cocoa Crop Plan (CEPLAC) was created to promote the scientific and technological development of cocoa in Brazil, encouraging innovations in agroforestry systems, such as cabruca management, and fostering sustainable production (Chiapetti, 2009). The modernization of techniques in the second half of the 20th century, although it benefited large producers, deepened socioeconomic inequality, weakening small farmers (Gasparetto, 1986). This historical context highlights the importance of productive reconfiguration and the adoption of sustainable management.

Productive reconfiguration and the adoption of sustainable management – Cabruca System

Starting in 2003, cocoa production in the region began to incorporate sustainable practices more systematically, focusing on biodiversity preservation and ecological balance, especially through the cabruca system and other agroforestry systems, which are characterized by low deforestation. During this period, an increase was observed in the participation of small and medium-sized farmers, with approximately 80% of cocoa rural establishments in Bahia being family farms, many of which adopt the cabruca system (Government of the State of Bahia, 2025).

The environmental relevance of the cabruca system is undeniable, especially considering that the Atlantic Forest biome, which once occupied 36% of Bahia’s territory, is now restricted to only 6% of the original area, fragmented into several portions (WAACK et al., 2022). In 1999, UNESCO recognized the Discovery Coast as a Natural World Heritage Site due to the importance of the Atlantic Forest reserves (IPHAN, 2014). The largest concentration of preserved native vegetation in southern Bahia is largely attributed to cocoa cultivation under the cabruca system, which acts as an ecological corridor and a fundamental ally to sustainable development.

The cabruca system consists of planting cocoa in the lower stratum of the forest, under the shade of larger trees that make up the upper stratum (Aguiar; Pires, 2019). This practice contributes to the elevation of fruit quality, as the deposition of organic matter in the soil, from the fall of leaves from native trees, favors the development of the cocoa tree. Furthermore, the native vegetation offers greater protection to the fruits, resulting in better productive conditions, according to data from the Arapyaú Institute.

The importance of the cabruca system transcends the productive perspective, evidencing a high commitment to environmental conservation and configuring itself as a strategic model for sustainable development in the cocoa production chain. The chocolate factory studied structured its creation and development project based on this type of management, recognizing that caring for cocoa is intrinsically linked to the preservation of the ecosystem. Cultivation under shade, in consortium with other species such as banana trees, not only improves the quality of the fruit but also maintains biodiversity and strengthens sustainable development practices (Scaramuzzo, 2020; Dengo, n.d.).

Origin of the Chocolate Factory and the Arapyaú Institute – Transformation of the cocoa chain

The analyzed chocolate factory has its roots in the work of the Arapyaú Institute, a private, non-profit institution founded in 2008 with the purpose of strengthening social bonds and promoting sustainability in the Legal Amazon and southern Bahia. The name “Arapyaú”, of Guarani origin, means “act of world renewal” (Instituto Arapyaú, n.d.). The main visionary behind the Institute is a businessman recognized for his pioneering work in sustainable development and for founding one of the world’s largest cosmetics companies, certified as a “B Corp” (Scaramuzzo, 2020).

The genesis of the Arapyaú Institute dates back to 2005, when its founder, upon acquiring a summer residence in southern Bahia, encountered communities in precarious socioeconomic conditions, with deficiencies in health, education, and basic sanitation (Sambrana, 2021). This scenario drove the creation of the Institute, focused on local socioeconomic development. Studies identified silviculture, tourism, and cocoa farming as central productive axes, with cocoa farming presenting the greatest potential for job creation, with an estimated 300,000 jobs in ten years (Sambrana, 2021).

In 2015, the founder of the Arapyaú Institute partnered with a former associate, becoming co-founders of the chocolate company. This partnership resulted in a business strategy that seeks to simultaneously generate economic value and positive social and environmental impact, based on the concept of shared value (Creating Shared Value – CSV). The initiative aimed to build a fairer, healthier, and more sustainable cocoa chain (Sambrana, 2021).

After two years of social and technical studies on cocoa and its environmental guidelines, the chocolate company was founded in 2017, with the purpose of ensuring a decent income for small and medium-sized producers, valuing the quality of cocoa beans (Sambrana, 2021). Initially, the project involved about six producers from southern Bahia and only one physical store in São Paulo. In nine years, the company expanded its support to over two hundred producers, with more than fifty stores in Brazil and two units in Paris, consolidating its internationalization strategy (Sartoreli, 2025).

Cocoa producers integrated into the company’s supply chain receive values between 80% and 160% higher than the conventional market price. This added value is directly related to the brand’s objective of encouraging the production of extremely high-quality cocoa, cultivated under the cabruca system, which is associated with sustainable development and environmental preservation, considered non-negotiable purposes of the company (Ataíde, 2023). The brand focuses on sustainable Brazilian cocoa, adopting the bean-to-bar model, which means “from bean to bar”.

This manufacturing model is more natural, with a higher cocoa content and no ultra-processed ingredients. It encompasses integral control of the production chain, from the harvesting and selection of beans in environmentally responsible areas, through all processing stages to final packaging (Sartoreli, 2025; Dengo, n.d.). The objective is to guarantee traceability, origin, and the real flavor of chocolate, without artificial additives or excess sugar, grounding the business in the principles of sustainability and social responsibility (Sambrana, 2021).

The cocoa selection process involves preliminary guidance to producers on quality and sustainability criteria, based on the cabruca system (Mafra, 2022). A company technical team visits the properties to assess socio-environmental and cultivation conditions. Before formalization, a batch of cocoa is submitted for analysis at the Cocoa Innovation Center (CIC) to verify the chemical properties of the beans. The brand also offers training to empower partner producers, aiming to guarantee a high-quality product.

This direct process with producers ensures the total traceability of the supply chain, allowing verification of the non-extensive use of pesticides and the absence of slave or child labor, practices incompatible with the organization’s values (Mafra, 2022). The company does not act as a trader, acquiring cocoa only when the producer expresses interest in selling, thus avoiding speculation. Financially, the brand has not yet achieved full profitability, depending on external investments, but expects to reach the break-even point in the coming years (Sartoreli, 2025).

Profit generation presents an additional challenge due to the business’s purpose. Unlike many brands that seek financial results maximization through franchises, the chocolate shop does not adopt this model in its central strategic guideline. The implementation of franchises could compromise the values of sustainability, environmental protection, and support for recycling, which are non-negotiable pillars of the company (Mafra, 2022). This choice reflects the commitment to a business model that prioritizes impact over immediate profitability.

The Chocolate Company and the “ESG” Pillars

The acronym ESG, which refers to the environmental (E), social (S), and governance (G) pillars, has been transforming the perception of brands and companies regarding sustainability. Aligning organizational purpose with ESG principles contributes to the creation of positive value for investors and other stakeholders (Nascimento, 2023). The term “ESG” was introduced in 2004, by the publication Who Cares Wins by the UN Global Compact and the World Bank, questioning how to integrate social, environmental, and governance factors into the capital market (REDE BRASIL DO PACTO GLOBAL, [s.d.]).

The relevance of this theme has driven the incorporation of ESG principles in various business sectors, including the food industry. The founders of the chocolate company, when establishing the project, sought to structure a business that would add economic value, social impact, and environmental benefits, aligning ESG principles with the brand concept (Mafra, 2022). According to the co-founder, the implementation of ESG pillars broadens the business vision to all business chains, from the selection of ingredients and packaging to employee compensation (Exame, 2022).

The company holds B Corporation certification, which attests to the fulfillment of high standards of social, environmental, and governance performance, indicating that the business balances profit and purpose (Dengo, 2023). This certification evaluates criteria such as mission, transparency, and legal responsibility (Governance), compensation, benefits, quality of life, and inclusion (Workers), local impact, diversity, and suppliers (Community), environmental management, supply chain, and emissions (Environment), and product ethics, health, and privacy (Customers), covering the S and G pillars. This certification aligns with the brand’s internationalization strategy, meeting the demands of European markets that value environmental and social parameters.

Environmental Aspect

On the environmental pillar, the chocolate company aligns its actions with the Sustainable Development Goals (SDGs) and the UN’s 2030 Agenda, seeking responsible consumption standards, waste reduction, and the use of recyclable materials. There is an incentive for policies of prevention, reduction, reuse, and recycling of natural resources (Dengo, 2023). The organization positions itself with a business model focused on cocoa cultivation under the cabruca system, an agroforestry method that contributes to environmental preservation and sustainable development, applying the SDG that highlights the importance of sustainable agriculture for regenerating soil, protecting biodiversity, and sequestering carbon, while keeping the “forest standing”.

The brand’s environmental concern is reflected in the implementation of sustainability measures in its stores, such as the use of 100% recyclable packaging, in line with the SDG that addresses responsible consumption and production. In 2023, the chocolate shop launched packaging made entirely of cocoa paper, 100% compostable. In 2024, after two years of research, the brand launched a line of plastic-free packaging for truffles, being one of the first on the market (Dengo, 2023).

The organization’s trend is to achieve zero plastic in its packaging in a few years. Seasonal products, such as those for Easter and Christmas, are marketed in fabric packaging, accompanied by a manual that guides on the reuse of the material for other purposes. According to the co-founder, approximately 93% of the company’s packaging no longer uses plastic in the production process, with the institutional commitment to completely eliminate this material by 2030, reinforcing the alignment with Agenda 2030 and environmental sustainability (Sartoreli, 2025).

The brand’s environmental actions include the cabruca system (SDG 2, 13, 15), which results in preserved biodiversity and sequestered carbon. Sustainable agriculture (SDG 2, 2.3, 8) involves socio-environmental verification of suppliers, agronomic support, and reduction of pesticides, promoting a more ethical chain and improving cocoa quality. Sustainable and recyclable packaging (SDG 3, 12, 13) aims for 93% plastic-free by 2025 and 100% recyclable, with a goal of total plastic elimination by 2030, resulting in the first plastic-free truffle on the market and reduction of solid waste.

The monitoring of Greenhouse Gases (GHG) (SDG 12, 13) and the decarbonization of the supply chain include the mapping of indirect emissions and the Inova Cacau 2023 Plan, resulting in integrated climate governance and competitive advantage. The Credits for the Earth Project (SDG 1, 8, 13, 15), in partnership with ECAM/ReSeed, offers carbon credits as complementary income, remunerating producers for sustainable practices and encouraging forest preservation. The traceability of cocoa (SDG 2, 12, 15) through the SBRC system and geolocation guarantees certified cocoa free from deforestation and credentials for export to Europe.

Terrestrial life and biodiversity (SDGs 2, 13, 15) are maintained by the preservation of the Atlantic Forest and the recovery of degraded areas, valuing the forest as a productive asset. Responsible consumption and production (SDGs 3, 12) are manifested in lower sugar content (27-28% vs. 45-55% in the industry), use of natural butter, and consumer education, resulting in a product with higher added value and consumer engagement as an impact agent.

Social Aspect

In the social aspect, the chocolate brand was conceived with the intention of generating positive social impact throughout the production chain, aligning with the Sustainable Development Goals. The company pays above-market prices for cocoa, aiming to ensure fair remuneration for producers, fostering local development, and promoting the social and economic inclusion of small and medium-sized producers, contributing to the reduction of social inequalities (Terzian, 2023).

The company’s co-founder emphasizes that the world needs impact businesses that are committed to socio-environmental challenges, evaluating the relative impact of each value extracted from the system and what is returned in benefits for employees, suppliers, customers, communities, and the environment (Sambrana, 2021). Social impact, therefore, goes beyond job creation, encompassing the guarantee of a decent income, the so-called living income, which enables access to food, housing, health, education, and dignity (Terzian, 2023). This debate, previously confined to the political arena, now demands direct engagement from companies.

Global cocoa production reaches about 5 million tons annually, with approximately 75% coming from small and medium-sized producers, many in situations of socioeconomic vulnerability (Pastore, 2023). In 2023, the company paid its producers at a level about 92% higher than the market value of cocoa, corresponding to an approximate price between R$ 33 and R$ 34 per kilogram. Despite this progress, in 2022, only 38% of the producers linked to the chocolate company reached the “dignified income” level, estimated at R$ 2,600.00 per month. Although modest, this progress represents a gradual departure from the poverty line and the construction of fairer and more sustainable production relationships.

Fair remuneration and living income (SDG 1, 2.3, 10) result in payments approximately 92% above market rates, with 38% of families reaching the living wage goal and a gradual move away from the poverty line. Affirmative action positions and diversity (SDG 10) promote inclusion programs and equal opportunities for historically disadvantaged groups, expanding diversity in the corporate environment and fostering distributive justice. The fight against child labor and technical support for producers (SDG 2, 8) include rigorous verification in the supply chain and agronomic support in the cabruca system, resulting in zero tolerance for irregular labor and improved cocoa quality and productivity.

Conscious consumption and products with lower sugar content (SDG 3, 12) involve the gradual reduction of sugar content to 27-28% (vs. 45-55% in the conventional industry), engaging the consumer as an agent of impact and offering direct health benefits. The Credits for the Earth Project (SDG 1, 8, 13, 15), with carbon credits as complementary income and ECAM/ReSeed partnership, remunerates producers for sustainable practices and encourages forest preservation. The additional value paid for cocoa is not subsidized solely by the company, but also by conscious consumers who choose the brand for its socio-environmental guidelines (Sartoreli, 2025).

The global chocolate industry generates over 120 billion dollars, but it is marked by profound inequalities, with a large portion of cocoa imported from Africa, where production is often associated with child labor exploitation and conditions analogous to slavery (Sartoreli, 2025). Given this scenario, it is essential for consumers to question the origin of inputs and participate in a critical chain. The brand’s chocolate has higher added value due to its association with a corporate policy that reduces negative social impacts and protects the environment.

The company also adopts policies to promote diversity among its employees, through affirmative action vacancies and equal opportunity programs for historically disadvantaged groups, reinforcing its commitment to social inclusion and distributive justice, according to the brand’s publications. The World Health Organization recommends that sugar consumption should not exceed 5% of the daily caloric intake. In Brazil, this index ranges between 15% and 18%. The company’s strategy is to gradually reduce the sugar content to 27-28%, not exceeding 30%, while the industry maintains rates between 45% and 55% (Sartoreli, 2025).

Governance Aspect

In the Governance pillar, the organization studied structures its actions based on clear corporate policies, aligned with the principles of ethics, integrity, transparency, and legal compliance, in line with best corporate governance practices and ESG guidelines. The company adopts formal control instruments, such as the Code of Conduct and Ethics, the Corporate Anti-Corruption Policy, and the Data Protection Management System, in compliance with the General Data Protection Law (LGPD).

The Corporate Anti-Corruption Policy establishes guidelines, responsibilities, and standards of conduct to prevent, identify, and repress acts of corruption, both in relations with public administration and in private relations. This policy applies to all partners, administrators, managers, employees, service providers, suppliers, and other third parties acting on behalf of the company, reinforcing the institutional commitment to integrity throughout the value chain (Dengo, n.d.).

Among the most relevant guidelines of the Anti-Corruption Policy, zero tolerance for any form of corruption, active or passive, stands out, in accordance with Law No. 12.846/2013 (Anti-Corruption Law) and the United Nations Convention against Corruption. The company expressly prohibits the offer, promise, or granting of undue advantages to public officials or third parties, as well as the financing, sponsorship, or subsidization of illicit practices, the use of intermediaries to conceal interests, and fraud in bidding procedures (Dengo, n.d.).

Regarding the protection of personal data, the company has structured a robust LGPD compliance program, functionally integrating it into its corporate governance. In compliance with Article 41 of Law No. 13.709/2018, the brand has appointed a data protection officer (Data Protection Officer – DPO), responsible for acting as a communication channel between the controller, data subjects, and the National Data Protection Authority (ANPD). A substitute has also been appointed to ensure the operational continuity of the program (Dengo, 2023).

The DPO’s responsibilities range from internal advice on data processing operations to monitoring regulatory compliance, conducting data protection impact assessments, and cooperating with the ANPD. The DPO reports directly to the company’s senior management, acting with autonomy and independence, without conflicts of interest, which reinforces the credibility and effectiveness of the privacy program (Dengo, 2023). The company also developed internal educational materials on cybersecurity and digital fraud prevention, including guides on phishing and QR Code scams (quishing) for employees, clients, suppliers, and visitors (Dengo, n.d.).

The company’s Cookie Policy, revised in June 2025, transparently details the categories of cookies used, providing clear mechanisms for managing and revoking consent, aligning with the ethical conduct of corporate governance. Another central point of governance is risk management and continuous monitoring, through internal oversight procedures, assessment of corruption risks, and application of disciplinary penalties proportional to the severity of the offenses, which can range from verbal warning to immediate termination (Dengo, n.d.).

The policy provides for periodic internal training for awareness of anti-corruption standards and applicable legislation. The company actively encourages a reporting culture, ensuring formal communication channels and information confidentiality to protect whistleblowers and enable the investigation of violations, reinforcing collective co-responsibility for organizational integrity (Dengo, n.d.). In monitoring the supply chain and compliance with suppliers, given the risks of slave-like labor, child labor, and deforestation in cocoa farming, the organization adopts a rigorous tracking and verification policy.

To this end, it implements a prior verification model aligned with SDG 2.3, which aims to ensure decent income for small rural producers, one of the brand’s central objectives. The process of formalizing partnerships with local cocoa producers is not automatic, requiring careful analysis of the partnership’s viability, which includes a technical evaluation of cocoa quality and verification of compliance with the company’s minimum socio-environmental guidelines (Way Carbon, 2025). Aspects such as the absence of slave-like labor or child labor, responsible agricultural practices, and reduced use of pesticides are examined.

For the control of GHG emissions, the company formalized a partnership with a specialized consultancy to monitor Scope 3 throughout the value chain, which covers all indirect greenhouse gas emissions, such as raw materials, transportation, and product use (Way Carbon, 2025). This stance reinforces governance integrated with sustainability, ensuring transparency and accountability throughout the supply chain (Sartoreli, 2025). In the context of international expansion, the company is anticipating the regulatory requirements of the European Union Deforestation Regulation (EUDR), which prohibits the import of seven commodities, including cocoa, from areas deforested after December 31, 2020 (AGROSUMMIT, 2025).

The regulation imposes total traceability of the production chain through geolocation and rigorous due diligence processes, requiring products certified as “deforestation-free”. In line with this, the cocoa production chain in Rondônia implements the Brazilian Cocoa Traceability System (SBRC), in partnership with Sebrae and the Cocoa Innovation Center. This project, developed with georeferencing startups, ensures transparency in production from cultivation to the final consumer (AGROSUMMIT, 2025).

The SBRC allows identifying the origin of production and verifying that cocoa does not come from deforested areas, optimizing the due diligence process and covering environmental and social aspects, such as working conditions. Although the project is in Rondônia, the Cocoa Innovation Center points to Southern Bahia as the next territory to adopt the technology. The brand has already established partnerships to grant a premium of 25% on the value of cocoa to producers who use the traceability system, financially incentivizing the adoption of transparent and socio-environmentally responsible practices (AGROSUMMIT, 2025).

The brand’s corporate governance and compliance indicators include low labor litigation, with approximately 36 active lawsuits for over 50 stores, which is a significantly reduced number in proportion to its size (JUSBRASIL, 2026). Compliance with LGPD and the anti-corruption policy are ensured by a Code of Conduct and Ethics, periodic training, and a whistleblowing channel. Supplier verification and the whistleblowing channel guarantee a continuous socio-environmental verification process and the confidentiality of information.

Cocoa traceability and EUDR compliance are guaranteed by SBRC and geolocation, resulting in a certified, deforestation-free production chain, a credential for export to Europe. Emissions monitoring and decarbonization, with mapping of indirect emissions and a net-zero emissions target, integrate climate governance and position the company for the carbon-neutral market. B Corporation certification attests to high socio-environmental performance, institutional credibility, and alignment with the internationalization strategy (Dengo, 2023).

The company’s governance is marked by leadership based on active listening, transparent communication, and closeness to employees, strengthening internal engagement and trust among stakeholders. Leaders’ visibility and humanized management contribute to the consolidation of an ethical organizational culture, consistent with the brand’s purpose. Corporate governance is oriented towards business longevity and the generation of positive socio-environmental impact, demonstrating an integral commitment to sustainability.

Real cost of food, health, and externalities

One of the main challenges faced by the chocolate industry relates to the actual cost of food, which is often not explicitly incorporated into the final price paid by the consumer, but is assumed, in a diffuse way, by all agents in the production chain. Brazil is the sixth largest producer of cocoa in the world, behind African countries such as Ivory Coast and Ghana, and Ecuador and Indonesia (ICCO, 2025). Cocoa is of great relevance as an agricultural commodity, involving a broad chain from small producers to large processors.

Brazil also imports cocoa from African countries due to the insufficiency of national production to meet domestic demand. The Brazilian chocolate industry highlights that the quality of chocolate should not be evaluated solely by technique, but above all by the quality of the ingredients, the bean, the soil, and the origin of the cocoa (Sartoreli, 2025). A large part of the industry removes natural cocoa butter for use in other products, replacing it with fats such as palm or soy oil. In Brazil, more than half of a chocolate bar is composed of sugar, which is a cheaper, addictive ingredient capable of masking the low quality of the cocoa, transferring this cost to the consumer’s health (Sartoreli, 2025).

The World Health Organization recommends that sugar consumption not exceed 5% of the daily caloric value. In Brazil, this index ranges between 15% and 18%. The company’s strategy is to gradually reduce sugar content, respecting the adaptation of the consumer market. Currently, the brand’s products contain between 27% and 28% sugar, not exceeding 30%, while a large part of the Brazilian industry maintains indices between 45% and 55% (Sartoreli, 2025). Another factor in the product’s cheapening is the use of extremely cheap labor, often associated with child labor or conditions analogous to slavery, transferring the cost not reflected in the final price to the producer, consumer health, or the environment.

The brand encourages cocoa production in Atlantic Forest areas, promoting standing forest, recovery of degraded areas, and income generation for small and medium producers, prioritizing practices free of artificial flavorings and chemical agents. The UN states that global food systems generate about 12 trillion dollars in annual externalities. If these costs were incorporated, food should cost, on average, double, potentially reaching five times more in the case of healthy diets. Conscious consumption is a daily democratic act that reflects the world one wishes to build.

Climate projects, public policies, and future perspectives

In partnership with ReSeed and ECAM, the chocolate company developed the “Credits for the Earth / Credits for Life” project, which currently involves more than one hundred families. The project aims to value and remunerate sustainable practices of small rural producers, recognizing their role in mitigating climate change through the measurement of carbon retained in agroforestry systems, such as cabruca cocoa (ECAM, 2025). The central objective is to transform the cocoa production chain in southern Bahia, valuing small and medium-sized producers and promoting sustainable practices in the Atlantic Forest, encouraging a low-carbon economy.

The concern with ESG pillars has been expanding, covering not only cocoa production but also packaging, logistics, and emissions neutralization. In October 2025, the company partnered with an organization specialized in decarbonization, climate risk management, and ESG, aiming to achieve zero emissions throughout the production chain. Brazil, being the world’s sixth-largest cocoa producer, has a target to double production by 2030, supported by financial and social incentives, such as the Inova Cacau 2030 Plan.

Organizations such as the World Cocoa Foundation highlight that increased productivity is an essential driver for the growth of Brazilian crops. IBGE data indicate that about 60% of cocoa producers are family farmers. Approximately 80% of national production is agroforestry-based, which strategically positions Brazil in the global bioeconomy. In this context, sustainable cocoa production presents itself as a relevant driver for territorial development, the promotion of social justice, and the mitigation of climate change, however, not without significant economic and operational challenges.

In the case of the analyzed company, the strategic option for a business model oriented by ESG practices, such as the valorization of the cabruca system and differentiated remuneration for producers, implied higher operational costs and the renunciation, until now, of obtaining traditional profit margins. According to institutional data, the company has not yet achieved profitability, as a large part of its revenue has been directed to structural investments necessary for the consolidation of a sustainable business, aiming to soon be in a stage of financial equilibrium, where there is no loss, but also no profit generation.

This reality shows that the adoption of sustainable practices, although it produces positive socio-environmental impacts, demands a high volume of investments and involves choices that strain the conventional economic logic of the sector. Thus, the analyzed model should not be understood as an arrangement of “perfect harmony”, but as a process under construction, marked by the gradual search for revenue regulation, allowing for a critical evaluation of the viability and scalability of business initiatives committed to sustainability.

In summary, the research demonstrated that the adoption of ESG practices by Brazilian chocolate companies constitutes a competitive differentiation strategy and an instrument for social transformation. The integration of the cabruca system, the progressive elimination of plastic, fair remuneration for producers, and transparent governance with anti-corruption policies and LGPD compliance, although requiring significant investments and impacting short-term profitability, strengthen the brand’s reputation and promote positive socio-environmental impacts, aligning purpose and profitability in a constantly evolving business model.

4. Conclusion

This study analyzed how the adoption of Environmental, Social and Governance (ESG) practices contributed to the consolidation of a sustainable business model in the Brazilian food sector, based on the case study of a national chocolate company. It was found that the integration of the environmental, social, and governance pillars was manifested in the implementation of a production system that values cocoa cultivation using the cabruca method, promoting the preservation of the Atlantic Forest and carbon sequestration. In the social aspect, fair remuneration for producers, significantly higher than the market price, and the commitment to reducing sugar content in products, in addition to diversity policies and the fight against irregular labor in the supply chain, were identified. In governance, the formalization of anti-corruption policies, compliance with the General Data Protection Law, and a robust cocoa traceability system were observed, elements that strengthened transparency and corporate reputation. The main contribution of the study lies in demonstrating that the adoption of ESG practices can act as a competitive differentiation strategy and an instrument of social transformation, aligning purpose and profitability.

However, the analysis revealed that the chocolate shop’s business model has not yet achieved full profitability, depending on external investments, as operational costs are high due to structural investments in sustainability. This limitation highlights that the scalability of ESG-oriented business initiatives in the food sector demands enabling conditions, such as incentive public policies, tax incentives, and a change in consumption patterns. It is suggested that future studies investigate the effectiveness of such policies and the impact of consumer awareness on the economic viability of larger-scale sustainable business models, in order to understand the mechanisms that can accelerate the transition to a low-carbon and socially just economy. The brand’s experience, although still developing, points to the growing need to align purpose and profitability in the contemporary business landscape.

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Article originating from the Final Course Work of the Specialization in Compliance and ESG of the MBA USP/Esalq

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