Increasing transparency means forests do not need to pay the price for cheap vegetable oil
posted by Niki Mardas, 21 March 2018
This matters because these forests provide natural protection against climate change, habitat for many of the world’s most endangered species and many of the natural resources we all depend on.
Demand for palm oil, and other ‘forest risk commodities’ such as cattle and soy is a major driver of forest loss in tropical countries. In Indonesia alone, an area of rainforest the size of the UK was lost between 1990 and 2015.
Transitioning to sustainable agriculture, while supporting the rights and livelihoods of local communities, would help reduce greenhouse gas emissions and keep global temperature rises below 2 degrees C.
Companies under scrutiny
Global Canopy’s Forest 500 project has been monitoring the deforestation commitments of 14 of the companies highlighted by the Greenpeace research (PZ Cussons and Smuckers were not included in the Forest 500 2017 assessment).
Six of these companies scored top marks for their policy commitments across different commodities, and all 14 scored top marks for their policies on palm oil. All of these companies, except Johnson & Johnson, have made a commitment to implement a traceability system – and all say that they apply their policies to all of their suppliers.
So it is worrying that none of these companies can guarantee clean palm oil supplies (pdf).
More worrying still, the companies assessed for Forest 500 are more likely to have a policy in place for palm oil (60%) than for the other main drivers of deforestation: cattle and soy. The reality is that no sector is on track to achieve deforestation-free supply chains by 2020.
So much more needs to be done. Palm oil and soy are used as vegetable oils across a vast range of consumer goods products. They are present in practically every aisle in the supermarket. And hidden soy is also present in most meat and dairy products as a result of its use in animal feed.
This demand for cheap vegetable oil has a high price.
Companies are aware of the problem. All of the companies assessed by Greenpeace are members of the Consumer Goods Forum, and have signed up to zero net deforestation by 2020.
Companies such as Nestlé and Unilever, for example, have made efforts to disclose their palm oil suppliers. This is an important step in addressing the issue – although transparency alone does not necessarily deliver change. Companies must also engage with their suppliers and ensure that supplies are deforestation free.
Others companies appear to be ignoring the problem – with no commodity-specific policies in place, let alone measures to address where their supplies are coming from.
With advanced technology and satellite data, companies have growing access to the information they need to understand their supply chains. This information also makes it easier for others to identify problems and hold companies to account.
New initiatives such as trase.earth track soy and cattle supply chains from the place of production to the country of import, allowing companies to identify the areas where deforestation risks are highest and take action to address the issues. Palm oil data is being added and will be developed over the course of 2018.
Financial institutions also have an important role to play in helping to eliminate deforestation risks in the companies they fund. But more information is available to them than ever before: a new platform, SCRIPT, takes a step forward in enabling these institutions to identify and engage on deforestation risks across their portfolios.
Moving from commitments to action
Consumers are increasingly aware of the links between palm oil and soy in the products they buy and deforestation in other parts of the world – and more and more companies want not only to be seen to do the right thing, but also recognise the need to address the legal and operational risks associated with unsustainable production.
This means moving beyond the realm of commitments and policies to taking clear action to address deforestation risks. By identifying suppliers, and engaging with them on the risks they all face, companies have the power to deliver real change. They also have fewer and fewer excuses not to act.