Demand for soy is the second biggest global driver of tropical deforestation. Tropical forests in South America are not only cleared to make way for soy directly, but also for beef pasture that is being displaced by soy elsewhere. This is contributing to the destruction of critical ecosystems and the climate crisis.
Almost 80% of the soy produced globally is used for animal feed, which means soy is embedded or ‘hidden’ in many animal products - including fish, meat, and dairy products. As a result these products may also contain deforestation, and so be linked to climate impacts, biodiversity loss and even human rights abuses - creating a clear reputational risk for manufacturers and retailers.
As government and consumer pressure for deforestation-free products grows, companies need to recognise the deforestation-risk in their soy supply. For manufacturers and retailers, exposure to indirect soy is likely to be much greater than exposure to direct soy in soy milk or tofu for example. So if companies are to effectively address their deforestation-risks, they must include indirect supplies in their commitments.
What are companies doing about it?
Forest 500 identifies the 350 companies with the greatest influence on tropical deforestation based on their exposure to forest-risk commodities, and assesses them on the strength and implementation of their deforestation commitments. This includes 130 companies which are exposed to indirect soy through their supply chains.
While 45 of these 130 companies have a deforestation commitment for their soy sourcing, far fewer show that they recognise the risks linked to indirect soy. Only 27 of the 45 companies with a deforestation commitment for soy have explicitly included indirect soy within their commitment.
This means that 18 of the world’s best known brands including Kellogg’s, Sainsbury’s, and Unilever need to ensure that they apply their deforestation commitment to indirect soy too - as it is currently not clear if they are doing so.
Some companies are taking this first step, including M&S, Tesco, and Lidl Group owner Schwarz Group which have all committed to ensuring that all of their soy consumption is deforestation-free - even that which they are exposed to indirectly through animal products.
How can companies address hidden soy?
Addressing deforestation hidden in soy supply chains is challenging because it can be difficult for companies to monitor soy that they don’t purchase directly. The proportion of soy in animal feed varies. Companies cannot always easily trace animal products back to source, and so cannot check what they were fed.
The Accountability Framework Initiative, which provides a guide to best practice for companies on implementing their commitments through their supply chains, encourages companies to monitor their suppliers for compliance with their deforestation commitments. Although this can be difficult, especially given suppliers rarely raise the animal from birth.
Forest 500 found that 12 of the 27 companies in Forest 500 which had included indirect soy in their deforestation commitment had not published a clear process to monitor their suppliers.
Without taking this first step, companies will struggle to deal with any non-compliance in their soy supply chain. But once this process is in place, companies can identify suppliers who are not in compliance with their commitments, and address any issues.
The Accountability Framework Initiative says companies should engage with non-compliant suppliers and work together to meet their deforestation-free commitments. Setting a deadline for compliance strengthens this approach, with the risk of exclusion from the supply chain if the supplier fails to comply.
Some companies opt to exclude non-compliant suppliers first, and then work with them to bring them in line with their commitments before re-including them in their supply chain.
UK food retailer Marks and Spencer announced that as part of its commitment to only source soy from deforestation-free regions by 2025, it was replacing the soy in the animal feed for its UK dairy cows with alternative sources of protein.
While exclusion can be effective in terms of eliminating deforestation from a company’s own supplies, engaging with suppliers can help drive change on the ground. Otherwise the risk is that suppliers simply sell the soy linked to deforestation to other companies. Global demand for soy is high, so suppliers who are deforesting will continue to find companies to supply - meaning the deforestation will continue.
Can companies use their influence even further?
Engaging with suppliers enables companies to bring their supply chain in line with their own standards - but companies can go further and require their suppliers, e.g. animal feed manufacturers, to set their own commitments to be deforestation-free across all of their own operations.
This model enables companies to extend their positive impacts on deforestation beyond their own supply chains - and drive change across all of their suppliers’ operations. The Consumer Goods Forum’s Forest Positive Coalition, which includes companies exposed to indirect soy through their supply chains such as Unilever, Tesco and Sainsbury’s, has adopted this approach for palm oil, beef, pulp and paper, and soy.
By using their influence as buyers to engage with their suppliers, and ask for change beyond their own sourcing, companies can work collectively to create a deforestation-free soy industry.
Image: United Soybean Board, creativecommons
