Putting commitments into practice
posted by Mei Corbett, 14 March 2019
The good news is that more companies are committing to remove deforestation from their supply chains, from big brands such as Nestlé and Danone, to trading companies such as Cargill and Louis Dreyfus.
But while this is welcome news, the key question is whether these commitments are implemented. Without this, they are not worth the paper they are written on.
Assessing implementation progress for the Forest 500 - reporting a key requirement
So how can we measure companies’ progress in implementing their commitments? This year, Global Canopy has improved the methodology for our 2018 Forest 500 ranking - due out on International Forests Day on Thursday 21st March - to capture which companies are reporting on their implementation efforts.
For companies to be fully held to account, it is crucial that they report on their pathways to implementation. This first step will make it easier to identify where companies are making progress.
Reporting against commitments is important because this allows others to see what has been done. Forest 500 asks companies to report on their annual progress and their volumes that are compliant with their commitments. In fact the new methodology now looks at whether companies independently verify their self-reporting to introduce greater accountability.
Companies should be using a consistent structure to report on their progress. The good news is that tools are becoming available for companies to use when reporting such as Proforest’s Implementation Framework.
New implementation indicators
Forest 500 now also looks at how companies are implementing their commitments, for example if they are monitoring and engaging with their suppliers. Half points are given if companies engage non-compliant suppliers with no clear time bound threat of exclusion, or blacklist non-compliant suppliers without engagement. This is because we believe that it is important that companies engage with non-compliant suppliers in their supply chain rather than simply ending these relationships. This encourages suppliers to improve practice and avoid deforestation, rather than continuing bad practice and selling elsewhere. On the other hand time bound exclusion is important to prevent continuous engagement with suppliers who do not change their practices.
We also assess whether companies have grievance mechanisms in place to promote transparency and accountability in their supply chains. Issues such as labour violations or land disputes can emerge from all segments of the supply chain and it is essential that there are ways of bringing these issues to the attention of companies.
Forest 500 has also added a new indicator on collaborative actions - for example participation in landscape initiatives. A key barrier preventing many downstream companies from implementing their commitments is the difficulty of managing risks within their complex supply chains. To overcome this, there needs to be a wider sector shift towards working with others to address issues and share costs in the transition to more sustainable supply chains. Reporting is still key, with companies only scoring points if they can show that they are allocating resources to these collaborative efforts.
The new implementation indicators allow Forest 500 to differentiate between the true leaders in soft-commodity supply chains and those who are yet to act on their commitments. The result of this will be that many companies will lose points in the 2018 assessment.
Working to find a common approach
The improved methodology, while providing a better measure of how companies are implementing their commitments, is also feeding into wider NGO community’s efforts to align assessment indicators and asks of companies.
The Accountability Framework, for example, is a collaborative effort working towards a set of norms and guidelines that companies can apply across their supply chains. With partner organisations, they are currently leading on the development of a framework that aligns the indicators used by different initiatives to assess company action on deforestation. This will help companies follow a clearer definition of best practice in shifting towards more sustainable supply chains beyond 2020.
Why this matters
Companies need to be held to account for their commitments to end deforestation and for the steps they are taking to implement them. With companies set to miss their 2020 targets, they need to strengthen their commitments by building detailed action plans including steps to implementation.
Action needs to happen to stop commodity-driven deforestation accelerating at the current rate. Forest 500 requires companies to implement their commitments and report on their progress. When this becomes common practice, we will see progress happening towards eliminating deforestation on the ground.