global perspectives

How to achieve a deforestation-free supply chain

30 June 2023 / WORDS BY Carter Ingram and Jake Billhorn

With deforestation surging, how can we ensure global targets and commitments are met?

The term ‘land use change’ is used to describe the process by which a natural landscape is transformed for human use. It can result in a degradation of ecosystem functions, significant greenhouse gas emissions, and is one of the biggest threats to global biodiversity.

One of the most prominent forms of land use change is deforestation. When forests are cleared to make way for activities such as agriculture, important habitats for myriad species are lost, as are the ecosystems and the many services they provide to society, including climate change mitigation.

Environmental activists started campaigning to ‘save the rainforests’ in the 1980s, yet the pace of deforestation has actually accelerated over the past decade compared with the early 2000s. The clearing of the world’s forests – home to about 80% of terrestrial biodiversity – is primarily driven by seven key commodities: timber, palm oil, beef (cattle), soy, rubber, cocoa and coffee. Many companies that rely on these commodities, including food producers and packaging suppliers, have made commitments to address risks and ensure deforestation-free supply chains by as early as 2025.

Policy developments in recent years helped bring about and fast-track these commitments. The Global Biodiversity Framework (GBF) agreed at the COP15 summit in December 2022 commits member nations to “halt and reverse” biodiversity loss by 2030, while in the US, President Biden last year signed an executive order on ‘Strengthening the Nation’s Forests, Communities, and Local Economies’, advancing efforts to conserve forest ecosystems and address drivers of global deforestation, including illegal forest clearing.

The European Parliament also passed a supply chain transparency law in April that will require companies selling products in the EU to have a due diligence statement from their suppliers, confirming the product does not come from deforested land. The EU law will cover cattle, cocoa, coffee, palm oil, soya and wood, and goods made from these commodities, as well as rubber, charcoal and printed paper products. Companies will also have to confirm that the rights of indigenous peoples were protected.

Where we are now

So how ready are companies to meet zero deforestation obligations – and uphold their own deforestation free supply chain commitments? A review of 865 companies that disclosed their data to the non-profit Carbon Disclosure Project (CDP) in 2021, showed that 66% had some sort of policy related to deforestation, 36% had a public, company-wide no-deforestation or no-conversion policy, and just 13% had commitments to no-deforestation/no-conversion that included remediation, restoration and/or compensation for local communities.

In our own research, we have found few companies with a 100% certified deforestation-free supply chain.  Granted, addressing deforestation across global supply chains is highly complex and not an easy undertaking. Companies often have limited visibility on the sourcing locations and production practices associated with the commodities they purchase. Identifying the origins of ingredients and/or raw materials can remain frustratingly hard to understand.

Commonly cited issues when it comes deforestation-free sourcing include no common definition of what constitutes a “forest”, considerable differences between zero-deforestation commitments (in which no trees are allowed to be cut down at all) and ’no net deforestation’ commitments (where losses can be offset by trees being planted elsewhere). However, one of the most difficult issues to address is traceability of products and commodities back to where they were grown and produced.

How do we get to where we want to be?

We work with stakeholders throughout supply chains for a range of commodities, and have identified five actions that can help companies reduce and address deforestation:

  1. The first step is to align the company’s commitments with a high-quality framework for reducing deforestation in supply chains such as the ones designed by the Accountability Framework initiative (AFi), or the Science-Based Targets initiative (SBTi). Key elements include making sure commitments are to zero deforestation, not “no net” deforestation and putting in place cut-off dates for as soon as possible, to avoid the risk of more deforestation occurring.
  2. Prioritise – start with the commodities identified in the organisation’s supply chain that are of the highest risk with respect to deforestation, and expand commitments to lower risk, high impact commodities in the future.
  3. Strengthening and/or developing relationships with supply chain partners. This may mean supporting downstream suppliers or aggregators with training or technical support, enabling them to track where commodities originate and how they were produced. It may also mean facilitating access to technical and financial resources for farmers in the supply chain so they can implement and maintain agricultural practices that reduce deforestation.
  4. Investing in supply chain traceability, monitoring and verification systems. These systems will provide the data to both make change and legitimise a company’s zero deforestation claims.
  5. Finally, the importance of collaboration cannot be overstated. No single organisation can address deforestation alone. Addressing the drivers of deforestation in a landscape may require companies to collaborate and partner with governments, NGOs, community groups, and other companies, as well as cross-commodity collaboration.

Fully realising deforestation-free supply chains will require investments in technology, new and potentially unlikely collaborations. It will require providing farmers and other supply chain actors with the resources needed to implement and track deforestation free commodities, and new reporting approaches and initiatives. Traceability systems that help companies better understand the scope and content of their supply chains can help to identify risks, including human rights abuses and deforestation. Transparent reporting is an essential way companies can ensure they track progress on their commitments. Traditional forms of supplier engagement such as site visits and surveys are also part of deepening relationships and commitments with supply chain actors to identify and advance solutions towards common goals.

With these elements in place, eliminating deforestation from supply chains is achievable. Although it is difficult and complex work, it is possible and can be done with existing technology, collaborations across landscapes and supply chains, incentives for downstream actors, and ambition to deliver on current commitments. Protecting the life-sustaining biodiversity of healthy forests benefits the climate, nature, local communities and ultimately, long-term business value for companies themselves.


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