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Frequently Asked Questions

 

Why is Forest 500 important?

We need to end tropical deforestation to tackle climate change and meet the targets set in the Paris Agreement. Tropical forests provide essential habitat for wildlife and are important for water supplies. That is why governments and companies endorsed the New York Declaration on Forests in 2014, calling for an end to commodity-driven deforestation by 2020.

What is asssessed?

The Forest 500 assessment looks at whether the most influential companies in forest-risk supply chains (palm oil, soy, beef, leather, timber, pulp and paper) are addressing deforestation risks through their policy commitments, and at what they say they are doing to implement these commitments. It also assesses the policies of the most important financial institutions providing finance to these companies. This means that both the companies and the financial institutions can be held to account against their commitments, and can benchmark their own performance against competitors. 

The Forest 500 assessment only considers publicly available information published by the companies or financial institutions on their websites.

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What if the companies and financial institutions have commitments but don’t publish them on their websites?

We believe that it is crucial that commitments and policies are made available online so that all stakeholders can assess their robustness and hold powerbrokers accountable for their commitments.

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How is the Forest 500 selected?

The 350 companies selected are the largest companies throughout palm oil, soy, beef, leather, timber or paper supply chains. Forest 500 selection covers the whole supply chains for these commodities, from producers to consumers. The 150 financial institutions are those that provided the most finance through shares, loans or bonds to those 350 companies.  

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What is a Forest 500 'powerbroker'?

The 350 companies included in the Forest 500 are described as 'powerbrokers' because they have been identified as the companies with the greatest influence on tropical deforestation through their production or use of at least one of the key forest risk commodities (beef, leather, palm oil, pulp and paper, soy, and timber).

Companies are selected as powerbrokers based on their exposure to those commodities, which is identified using a variety of metrics which vary depending on the stage of the supply chain for each commodity, including but not limited to the total landbank available for the production of that commodity, the volume of the forest-risk commodity they produce/use, or the market share within relevant sectors. 

Companies that are powerbrokers for one commodity can also produce or use other forest-risk commodities. If their exposure is not sufficient to be a powerbroker they are still assessed for the additional commodity under the Forest 500 methodology, but the scores are weighted lower for the 'non-powerbroker' commodity to reflect their reduced influence in that supply chain.

The 150 financial institution 'powerbrokers' are the key lenders, investors and other financial institutions which provide the most finance, through shareholdings, loans and underwritings, and bondholdings to the 350 powerbroker companies

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Have the companies chosen been directly linked to causing deforestation?

The companies and investors included in the Forest 500 have significant influence over the production and processing of the commodities that drive deforestation. The companies have been identified due to their size and market share. Financial institutions are selected based on the size of their investments in the 350 companies. They are at significant risk of driving deforestation, and need policies to prevent this from happening.

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Will the financial institutions and companies included in the Forest 500 change over time?

The Forest 500 have been identified using a methodology that takes into consideration issues such as company size, their links to commodity supply chains, and market shares within each industry sector. Considering that companies are being bought and merge with others on a regular basis, it is likely that a small number of new companies will be included every year while others that become less relevant or have merged may be deleted. The selection is reviewed every two years in order to ensure the most relevant actors continue to be assessed. The latest selection of companies and financial institutions was completed in 2020.

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The assessment no longer includes jurisdictions. Why not?

Previous Forest 500 assessments (2014, 2015, 2016, 2017) have ranked key jurisdictions on their deforestation policies. Since 2018 assessments have focused on company performance, rather than jurisdictions. Jurisdictions are still included in the selection process; key producing and trading jurisdictions are identified in order to guide the company and therefore financial institution selection. 

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Why do you only include six commodities in your assessments?

While palm oil, soy, beef, leather, timber and pulp & paper are not the only commodities that cause deforestation and land conversion, they have been the key drivers in recent years. We may consider adding other commodities in the future.

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Are companies in different supply chain segments assessed differently?

In 2020, Forest 500 company assessment methodology was fully aligned with the Accountability Framework Initiative. As part of this alignment, several indicators within the 'Reporting and Implementation' section of the assessment methodology apply specifically to either upstream or downstream companies.

Upstream companies are defined as producers and processors, while downstream companies are defined as traders, manufacturers, and retailers.

In addition to the standard indicators on reporting and implementation, upstream companies are assessed on indicators 4.9, 4.10, and 4.12 (worth a total of 12 points per commodity). Downstream companies are instead assessed on indicators 4.11, 4.13, 4.14, and 4.15 (also worth a total of 12 points per commodity). Companies which are classed as both upstream and downstream for the same commodity are assessed on all seven indicators, which are weighted to equal a total of 12 points. 

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Have you assessed the companies and financial institutions in the languages they operate in?

Yes, wherever possible powerbrokers have been assessed in the key languages they communicate in. In particular languages included Arabic, Bahasa Indonesia, Bahasa Malay, Dutch, English, French, German, Italian, Japanese, Korean, Mandarin, Norwegian, Portuguese, Russian, Spanish and Swedish.

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How do you define deforestation and conversion?

Forest 500 uses the definitions of deforestation (including zero-net and zero-gross deforestation) and conversion (including zero-net and zero-gross conversion) as defined by the Accountability Framework Initiative. 

While deforestation specifically refers to the loss of natural forests, conversion extends to any change from a natural ecosystem to any other land use.

The full definitions used can be found on the Accountability Framework Initiative website.

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How objective is the selection methodology?

The methodology that was used to identify the Forest 500 can be found here. We believe that this represents the current best effort to identify the key powerbrokers. Nevertheless, given the lack of reporting in some sectors and the significant lack of data available, it is not possible to guarantee the accuracy of all information contained on this site.

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Do you release the detailed scoring? 

The full assessment methodologies are available online, and all scores (out of 100) are available to view on each company or financial institution profile or via the rankings page. You can also download the full datasets

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Will the assessment methodologies be reviewed to reflect policy developments?

The Forest 500 assessment methodologies for companies and financial institutions are reviewed and updated each year.

In 2020 the company assessment methodology was tightened and now fully aligns with the Accountability Framework Initiative. This sets out a common framework for companies seeking to address deforestation in their supply chains, and outlines the best practice for companies operating in forest-risk supply chains. The Forest 500 company assessment methodology now assesses companies against this best practice.

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