Extending the ambition of company commitments to zero deforestation in soy supply chains
posted by Ellen Griffiths, 18 April 2019
But, despite the risks to biodiversity, just one of the companies assessed for soy by Global Canopy’s Forest 500 Annual Report 2018 scored 5/5, with a zero deforestation commitment that applies to all sourcing regions rather than specific biomes such as the Amazon, and a time-bound deadline such as 2020. The Forest 500 assesses 168 companies in soy supply chains, looking at the strength of their deforestation commitments.
The average score for the companies assessed was a disappointing 13% and of the 168, 75 companies scored 0, meaning that these companies did not have any commitments for their sourcing or production, or even show an awareness of the importance of forests. The entire soy sector lags behind the palm oil and timber sectors in this respect.
Moving towards implementation
Compared to the 2017 rankings, 70% of companies assessed have dropped scores, mainly because new indicators were introduced in 2018 to assess the implementation of policy commitments. It is crucial for companies to publicly report on their policy implementation so that they and others can monitor their progress, even if their total volumes sourced will not reach full compliance for a number of years.
In implementing commitments, companies must ensure accurate monitoring of compliant soy volumes and supplier performance on an ongoing basis to be able to meet their no-deforestation commitments. Companies should also have a clear policy on engaging with non-compliant suppliers and report on actions to address issues of non-compliance. Suppliers should be given time to become compliant, and only removed after a specified period of engagement.
There are many initiatives which can help companies move from forming policy commitments through to implementation, including the Accountability Framework Initiative and Proforest’s Soy Toolkit, which provides resources and guidance from supplier engagement and setting up purchase control systems through to monitoring and reporting on progress.
Supply chain transparency needed
Supply chain transparency has been the critical barrier to progress thus far, with the soy supply chain often being opaque to the downstream buying companies. This is only now changing, with tools such as Trase allowing companies to map supply chains from port of import back to production municipality without leaving their office HQs. However, in 2018 none of the companies assessed disclosed their lists of soy suppliers. This is a crucial next step for companies to improve transparency – which makes it easier for them and others to understand their supply chains, identify sources of risk, and more effectively monitor compliance.
Companies should follow the lead of palm oil supply chains, and bring the same transparency to other commodity sourcing. A quarter of companies assessed for palm oil disclose either supplier lists or detailed sourcing areas, by giving coordinates or concession boundaries.
Moving beyond 2020
Global Canopy’s 2018 Forest 500 annual report shows that it is unlikely any company will be able to meet these commitments by the original 2020 deadlines that many companies had committed to for achieving zero-deforestation supply chains.
The industry has made some positive steps, however, with the Soft Commodities Forum announcing that it will be tracking soy from the Cerrado, and Cargill joining Louis Dreyfus and COFCO by launching a commitment of no-conversion of native vegetation since the Forest 500 assessments were completed in 2018. Companies now need to move beyond commitments to individual action plans for implementation, following the lead of the UK Sustainable Soy Roundtable’s specific action plans for companies.
The soy sector could also learn from other commodities in terms of setting and implementing meaningful policies. Of the 87 Forest 500 companies that have forest-related commitments for palm oil (and are exposed to soy) 58 did not have forest-related commitment for soy.
Collective agreements which companies sign up to such as the Soy Moratorium and Cerrado Manifesto have put companies on the right path, but it will take determination from company head offices and increased public pressure and scrutiny to steer the soy industry in the direction of social and environmental responsibility.