How do we assess the Forest 500 companies?

What is Forest 500?

Forest 500, a Global Canopy project, identifies and ranks the 350 companies and 150 financial institutions with the greatest influence on tropical deforestation. For the companies, this influence comes from exposure in their supply chains to six forest-risk commodities: palm oil, soy, beef, leather, timber, and pulp and paper. The exposure is identified through data from volumes of commodities used, to market share in industries that use these commodities, to area of land owned.

What did the latest Forest 500 assessment find?

This year’s Forest 500 assessment found that a third of the companies assessed still do not have a deforestation commitment[1] for any of the forest-risk commodities they are exposed to. Only a quarter have made deforestation commitments for all commodities, with the fewest commitments being made for soy (31%), beef (28%), and leather (25%).

One third of those companies that have at least one deforestation commitment, do not report on their progress towards all of their deforestation commitments. As deforestation rates continue to rise, we need greater transparency from companies on their exposure to, and action to address, tropical deforestation in their supply chains.

How are companies assessed? 

Companies are assessed on the commitments they have for each of the forest-risk commodities they are exposed to through their production or sourcing.

Forest 500 assessments are carried out using the information and commitments which have been made publicly available on the companies’ websites. They are assessed against an average of 95 indicators  that measure both the strength of their deforestation commitments for each commodity, and how they report on implementation. 

Wherever possible, companies are assessed in their native language to allow for nuances in translation.

Global Canopy reviews the assessment methodology every year with external experts, to ensure it continues to reflect best practice for company action on deforestation - and the methodology is fully aligned with the Accountability Framework Initiative’s Common Methodology. 

Why don't we ask companies for input?

Forest 500 assesses companies on their publicly available commitments and reporting, without their direct input. We do this because transparency on exposure to and action on tropical deforestation is critical in achieving deforestation-free supply chains. 

Clear, publicly-accessible information and commitments make it easier for other companies to benchmark against their peers and it also allows NGOs, businesses and governments to hold companies accountable. 

Such transparency also enables companies to check whether their suppliers are operating in line with their commitments.

With due diligence legislation on deforestation expected in the UK and also likely in the EU, companies could soon be legally required to identify and address their exposure to tropical deforestation. Transparency from companies in their supply chains, will make it easier for the companies themselves and their suppliers to comply with this legislation.

Changes since 2020 - alignment with the Accountability Framework Initiative

In the 2020 assessment methodology review, Forest 500 aligned with the Accountability Framework Initiative’s Common Methodology which outlines best practice for companies operating in forest-risk commodity supply chains. Our alignment of the Forest 500 company methodology meant that at least 16 indicators were either changed or added compared to our 2019 methodology.

What makes up a company’s score?

A company score is identified based on four key areas, as shown below. 

Overall Approach

Forest 500 looks for an overarching commitment to remove or reduce deforestation and/or conversion of all natural ecosystems within the companies’ supply chains. We also assess other indicators that indicate awareness or intention, including whether companies recognise deforestation as a business risk.

Content of commitments

Each commodity is assessed on more detailed indicators, including whether the company has a deforestation commitment specific to each forest risk commodity they are exposed to. The strongest commitments apply to all operations, suppliers, and sourcing regions, and have a target date for completion.

Social commitments

Assessed once per commodity, our methodology assesses companies for their commitment to require human rights, workers rights, and indigenous rights to be respected in their supply chains, such as ensuring gender equality, the inclusion and support of smallholder farmers, securing the free, prior and informed consent of local populations, and a commitment to provide remediation for environmental harms. 

Reporting and Implementation

Companies can struggle to report on how they implement their commitments as measuring impact within supply chains can prove difficult due to a lack of transparency from suppliers. 

We look at a variety of implementation indicators including whether companies monitor their suppliers or own operations in line with their commitments. The assessments also identify whether companies conduct forest-risk assessments, and check if their supply chains are operating legally. 

Companies score points for reporting on their progress towards the deforestation commitments, and transparency about specific commodities used and sourcing regions and suppliers.

All scores reflect data reported by companies themselves, meaning we are unable to verify its accuracy, or how robust their monitoring is. Some companies, such as JBS, score well for their policies but have still been exposed for links to deforestation in their supply chains. 

Interested in finding out more?

Watch a recording of our webinar for companies below.

You can also find out more about what good looks like in our insight.

[1] For companies, a deforestation commitment is one that commits to zero-gross/zero-net deforestation or zero-gross/zero-net conversion, or at least protects priority forest types including high conservation value forests or commits to a credible certification scheme that protects these.