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Insight

Deforestation risks high in beef and soy supply chains

Companies in beef and soy supply chains are still not doing enough to address deforestation, according to the eighth annual Forest 500 report, with the majority of companies lacking commitments to address deforestation in these supply chains.

This lack of action is particularly worrying as Brazil is the biggest global exporter of both beef and soy - and deforestation in the Brazilian Amazon is increasing, reaching a 15-year high in 2021.

Indeed, the Brazilian cattle sector has been found to be the biggest global driver of deforestation, with forests and natural habitat cleared in both the Amazon and the Cerrado to make way for cattle pasture. Indigenous peoples and local communities are frequently displaced by this clearing, and often this pasture is later converted to arable land for soy. 

New research from the Brazilian NGO Instituto Centro de Vida finds more than 1000 square kilometers of forest has been cleared on soy farms in the Amazon in the last decade. 

Beef producers on the frontline

Global Canopy assesses 87 companies in beef supply chains, covering all stages of the supply chain from producers through to processors, traders, manufacturers and retailers. Just 30% of those companies assessed have a commitment to end deforestation.

This includes eight Brazilian beef producers, processors and traders - companies which could be seen as operating closest to the deforestation frontline. While seven of these companies have deforestation commitments, only one, Marfrig, applies that commitment to all sourcing regions. JBS and Minerva - who with Marfrig dominate the market - have commitments that only apply to some sourcing regions. Irmãos Gonçalves Comercio e Industria has no commitment at all.

And when it comes to effective implementation of their commitments, there is a mixed picture. JBS, for example, does not require suppliers to set equivalent deforestation commitments for all of their supply chains, meaning that beef producers may guarantee that JBS is buying deforestation-free beef, but may continue to supply beef linked to deforestation to other clients. Marfrig and Minerva require suppliers to have commitments across all of their supplies. 

None of the companies use independent verification to check compliance for all of their operations - although JBS does have independent verification for beef sourced from the Amazon.

The story for soy

Similar problems are found in soy supply chains, with just 14 of the 33 (42%) soy traders and processors assessed having made a deforestation commitment. Four of these companies are headquartered in Brazil.

The big beef traders (JBS, Minerva and Marfrig) also buy and sell soy, but only JBS and Minerva have a zero deforestation commitment for soy, and they do not apply their commitments to all sourcing regions. 

But these companies only represent a small proportion of the soy trade, which is dominated by Bunge, Cargill, Amaggi, ADM and COFCO. These “big five” companies have all made deforestation commitments, and signed a commitment at COP26 to “work with governments, farmers, and other key stakeholders in our supply chains, to accelerate sector-wide action and to identify opportunities for public-private collaboration to catalyse further progress on eliminating commodity driven deforestation”. 

Amaggi, ADM, Cargill and Bunge apply that commitment to all sourcing regions, while COFCO only applies its commitment to all sourcing from Brazil. Only ADM, Amaggi and Bunge report on how their commitments are being implemented, relying on the RTRS certification scheme to verify that soy is deforestation-free. None report complete compliance with their commitments - with Amaggi reporting that in 2019, just 22% of its soy was certified. ADM, Amaggi and COFCO report no certified soy.

Lack of action echoes down the supply chain

There is a similar mixed picture when it comes to manufacturers and retailers sourcing beef and soy. Some companies have made strong commitments but are not engaging with their suppliers to ensure that commitment is implemented.

Manufacturers and retailers must effectively engage their suppliers if their deforestation commitments are to be implemented. But we also need to see greater action from the producers, processors and traders, especially those which dominate the production and processing of beef and soy. These companies have the potential to transform beef and soy supply chains, and must step up to the plate if we are to achieve global supply chains that are deforestation-free. 

 

Image credit: Alfribeiro, iStock.com

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