Feature Story

Supply change: Businesses get serious about stopping deforestation

June 21, 2017

Palm oil plantation at sunrise
Palm oil plantations are notorious for their varied negative environmental impacts, including deforestation and habitat loss, air and water pollution, and soil erosion.

Before you can stop deforestation, you have to know what’s causing it. And in the case of tropical forests, the answer is clear: Most deforestation is driven by commercial agriculture, namely the production of palm, soy, timber and cattle – the so-called “big four” commodities.

But things are starting to change. Several hundred large companies have committed to reduce or eliminate deforestation in their supply chains. At the same time, more investors, corporations, industry groups, non-profit organizations, consumers, and governments are calling for more information on how companies’ actions are affecting forests.

Much of this progress is being driven by Supply Change, a global online platform that tracks corporate commitments to reducing deforestation in supply chains. Launched in 2015, the platform is now tracking deforestation commitments made by roughly 450 companies that produce, process, trade, manufacture, or retail products linked to the “big four”. Supply Change has also identified at least 100 companies that have committed to helping small farmers improve their practices in an effort to slow deforestation.

“Supply Change is the world’s largest, most comprehensive and most accessed database on company commitments to reduce deforestation,” says UN Environment expert Ersin Esen. “The platform allows people to monitor and report on companies’ commitments. This, in turn, enables companies, associations, governments and others to access and use this increasingly transparent and available data.”

Supply Change is implemented by the non-profit organization Forest Trends and UN Environment, and funded by the Global Environment Facility. Cargill, Nestlé, Royal Dutch Shell, Starbucks and Unilever are among the major multinational corporations whose commitments Supply Change is tracking.

“It is always really helpful internally to be able to point to the very wide diversity of stakeholders who are really keen to see us meet [our deforestation commitments] and are supportive of the challenges that we are encountering in getting there,” says Unilever’s Hannah Hislop.

“Encouragingly, more companies are making progress towards deforestation-free supply chains,” writes Jillian Gladstone, Senior Manager of CDP’s Forests Program, in an article for the Supply Change newsletter. CDP, formerly the Carbon Disclosure Project, runs the global disclosure system that enables companies, cities, states and regions to measure and manage their environmental impacts. It has been partnering with Supply Change for the past three years.

Information on how companies are progressing “is publicly available for over half of commitments tracked by Supply Change over a two-year time frame – a dramatic increase from a year ago, when only one in three commitments were backed by transparent progress,” says Gladstone.

Key findings from the latest Supply Change report, Tracking Corporate Commitments to Deforestation-Free Supply Chains:

  • Commitments on palm, and timber and pulp continue to lead the way, while commitment rates remain considerably lower for soy and cattle, which is troubling given their outsized contribution to tropical forest loss.
  • Smaller, private companies continue to lag behind their larger, publicly traded peers in terms of commitment rates.
  • Retailers had the lowest rate of commitments — 54 %— compared to their peers that operate “upstream” within supply chains (producers, 71 %; processors, 72 %; traders, 70 %; and manufacturers, 66 %).
  • Commitments that aren’t accompanied by progress reporting run the risk of becoming “dormant”. One in five commitments has a target date that is either past due or never had a target date at all — and has never had progress information available. One third of the 447 companies with commitments have at least one commitment that is dormant.

Read more about Supply Change in this Rural21 article: Big business, small farms and “no deforestation” commitments.

Livestock production is a primary driver of deforestation in the Amazon Basin. In the last 40 years, the region has lost nearly 20 percent of forest cover, or an area of about the size of California, to soy farming, cattle ranching, and illegal logging.

Soy, beef and palm oil are used in a wide range of foods and goods that are consumed by billions of people around the world. They yield about US$92 billion a year to producers, many of whom are small-scale rural farmers. But they are also responsible for about 80 percent of tropical deforestation.

To address this issue, in 2015 the GEF approved a five-year, US$45 million Integrated Approach Pilot Program called Taking Deforestation out of Commodity Supply Chains to help support the production of sustainable commodities as well as stimulate the demand for them. By linking efforts in the production-side and the demand-side, the GEF is helping to make them mutually supportive and linking them to the work of governments and others along the entire global supply chain for soy, beef and oil palm, strengthening engagement by a wide range of stakeholders, from smallholder farmers to global corporations.

The GEF is also working with partners under the Tropical Forest Alliance 2020, a global public-private partnership to drive action towards deforestation-free supply chains, hosted at the World Economic Forum. Through a $400 million fund to halt deforestation in tropical forests, the GEF, together with Norway, UN Environment, the Sustainable Trade Initiative (IDH) and major food companies and environmental NGOs aim to protect over 5 million hectares of forests and peatlands – an area equivalent to the size of Costa Rica – by 2020.

This article was originally published by UN Environment