Weak by design: company commitments fall short on deforestation
More companies than ever have committed to address deforestation in their supply chains as seen in high profile statements such as the New York Declaration on Forests (pdf). Yet the global deforestation rate, and deforestation linked to agricultural production continues to rise. Why have these commitments not translated to improved protection of forests?
A recent study released in Nature Climate Change asks this same question. Authors, Eric Lambin and Holly Gibbs highlight the failure of many commitments to specify implementation actions, or to address indirect impacts, such as the movement of production and impacts to new regions by only focusing on one geography at a time.
These findings reinforce the conclusions from Global Canopy’s Forest 500 analysis — despite making commitments, most policies lack the strength or scope to adequately address deforestation. And few companies include details regarding how they will implement the commitments they have made.
For example, 87% of companies that have at least one commodity policy do not apply those policies to their suppliers. Commitments either omit certain geographies, portions of the supply chain, indirect suppliers, or only apply to certain types of forests. These limitations leave many loopholes, enabling companies to claim compliance with their commitments despite continued links to deforestation.
The implementation gap
Not all company policies are designed with loopholes. Among the Forest 500 2017 findings, 57 companies scored at least four out of a maximum five points, indicating they have strong policies. However, a gap persists between the adoption of a strong policy and its implementation.
Even leading companies face the challenge of how to translate the commitment into actions throughout their supply chain, including the challenge of identifying where, and how to take action. The supply chains for forest risk commodities, such as palm oil, soy, and cattle, are complex and often opaque, making it difficult for companies to identify the companies and the places they source from.
This complexity grows exponentially for consumer goods manufacturers and retailers. These companies only receive goods after they pass through four or five other intermediaries, making it difficult to identify which companies supply them, and where the products originate.
Even where a company knows who supplies it, or the general region where a product originates, it still remains difficult to determine if that product is associated with deforestation. For example, the land used to produce soy this year may have been deforested five years ago, and planted with corn. The soy producer may have unknowingly purchased previously deforested land. For a retailer sourcing soy from that land, would that soy be considered to be linked to deforestation?
These challenges in tracing the supply chain are becoming less daunting with unprecedented data such as through the mapping efforts of Trase, or the deforestation monitoring tools used by both civil society organisations and governments. Such tools provide key first steps to move from policy to implementation, including identifying the highest risk suppliers and production geographies.
The way forward
Companies have the potential to play an important role in addressing deforestation through their supply chains. As Lambin and Gibbs conclude, commitments must be designed to be stronger and to cover all forest impacts. Particularly important is the need to avoid the displacement of impacts from one protected area of forest to a forest somewhere else.
Much work remains to identify how to quickly and effectively implement these commitments to avoid irreparable harm to forests and the environment. Lambin and Gibbs suggest a need for specific codes of conduct to require sustainable production and procurement, yet how to design such codes remain unclear, and obstructed by a lack of pre-competitive collaboration among companies.
“More immediate action is needed to demonstrate commitment to change and to clear the haze surrounding these efforts” Holly Gibbs, study author.
Global Canopy — together with our partners in the Supply Chain Transparency Network — are developing just such best practices to unlock the potential of companies to reduce deforestation.
But further opportunities for collaboration among companies is a crucial missing piece. As companies develop the strategies that work best, greater improvements in deforestation can be met by sharing these strategies — both with peer companies, and with NGOs.
Article by Dr. Sarah Lake, Head of the Supply Chains Programme at Global Canopy