The countdown to 2020
posted by Helen Burley, 14 January 2019
As 2019 gets underway, there is no longer any excuse for companies involved in forest risk commodities – whether that be palm oil, soy, beef and leather or timber, pulp and paper, or others – not to be doubling their efforts to make sure they are not directly, or indirectly responsible for tropical deforestation.
Signatories to the New York Declaration on Forests – which includes major traders such as Cargill, and consumer goods manufacturers such as Danone, Nestlé and L’Oreal, have committed to eliminate deforestation from their supply chains, including from third party suppliers, collectively by no later than 2020. And members of the Consumer Goods Forum have a collective commitment to achieve net zero deforestation by 2020.Yet as the 2017 Forest 500 assessment shows, while many have made commitments to prevent deforestation in their supply chain, those commitments rarely apply across all commodities and all areas of forest risk.
Indeed, none of the 250 most influential companies in forest-risk supply chains identified by Forest 500 are able to guarantee their supply chains are deforestation free.
Opportunities for action
Of course for some of the companies involved in forest-risk supply chains, doubling their efforts will not be enough because they do not appear to be making any effort at all.
Forest 500’s 2017 assessment identified 25 major players in forest-risk supply chains who did not have any policies at all on addressing deforestation risks. Some of these companies are sourcing palm oil, soy and beef, but have not identified the risk from deforestation in these supply chains. Companies sourcing beef and other cattle products were least likely to be addressing the risk.
These companies need to recognise the deforestation risks in their supply chains and introduce policies to address those risks. Transparency and traceability tools exist to help companies identify risks – Trase for example highlights where companies sourcing soy from Brazil may be exposed to deforestation risks. The new Accountability Framework initiative (AFi) will provide a toolkit for companies to follow.
Other companies have recognised the risk posed by deforestation in some areas of their supply chains, but many fail to introduce relevant policies across all forest-risk commodities. So while 61 percent of companies assessed have a deforestation policy for sourcing palm oil, almost half of these companies did not have a corresponding policy for sourcing soy despite also being exposed to deforestation from soy in their supply chains.
Companies also need to ensure that their commodity-specific policies apply to all of the areas that they source from. The majority of company policies related to soy apply only to the Amazon, and not to areas such as the Chaco in Argentina and Paraguay where forest is also being cleared to make way for soy production.
Even companies who have made commitments across all supply chains and all areas have work to do to implement these commitments – with greater transparency around their supply chains a key part of this. Progress is needed ahead of the 2020 deadline – and beyond. The new Forest 500 indicators will be assessing progress on implementation this year.
Who can help drive change?
While companies are in the driving seat when it comes to ensuring there is no deforestation in their supply chains, financial institutions can push the companies they invest in to address these deforestation risks, in order to avoid being exposed to deforestation through their loans and investments.
The SCRIPT tool, created by Global Canopy with WWF and Ceres allows financial institutions to understand and mitigate the deforestation risks associated with financing companies in soft commodity supply chains. Guidance documents outline the risks for financial institutions from investments in unsustainable production in different sectors and detail what company policies financial institutions should look for.
Governments also play an important role in influencing company behaviour, both in producer countries and in consumer markets. For producer countries, legislation and enforcement can be used to protect important areas of native vegetation, but softer measures including incentives for sustainable production can also be effective. For example, Brazil’s ABC programme is designed to encourage lower climate emissions from agriculture.
Consumer country governments can also drive companies to change behaviour through their actions. The French government, for example, has introduced a National Strategy to Combat Imported Deforestation, and the European Union is introducing an integrated approach to addressing deforestation.
Consumers too can influence company behaviour – through purchasing decisions and also by directly demanding more sustainable products from retailers and manufacturers.
Take action now
With the 2020 deadline looming there is clearly an urgent need for action – and much to do. But the tools are available to support companies and financial institutions to address the challenge. As momentum grows to deliver on climate goals – alongside deforestation targets, companies have every reason to act.
The 2020 deadline may not be achieved across supply chains, but that is not an excuse for abandoning targets, or kicking the can down the road. Progress needs to be made.