- More leadership, transparency and accountability is needed in the corporate sector.
- Of the 250 companies found to have the most influence over tropical deforestation worldwide, just 7 percent have commitments to comprehensively remove deforestation from their global supply chains.
- Most alarmingly, none of the most influential investors or lenders have zero deforestation policies in place.
News of another company or country adopting some kind of policy on deforestation is so common these days it’s safe to say that awareness of the need to conserve what’s left of the world’s tropical rainforests has probably never been more prevalent.
But very few of the global corporations most responsible for the risks facing rainforests have made pledges to eliminate deforestation across their entire supply chains, according to new research that found the “deforestation economy” has not slowed down despite heightened awareness of its pervasive impacts.
What we need is “a new set of incentives that promote sustainable, deforestation-free agriculture,” according to a report published this month by Oxford, UK-based forest conservation group Global Canopy Programme (GCP).
In other words, making pledges is the easy part — actually implementing commitments to eliminate deforestation from the supply chains of big agricultural companies is the far more difficult part, especially because it means shifting the priorities of the entire global economy.
Researchers at GCP examined the challenges faced by the hundreds of corporations that have pledged to eliminate deforestation from their supply chains, whether through a “zero deforestation commitment” or a “zero net deforestation commitment” (which aim to achieve zero overall loss of forest while allowing some flexibility to meet the needs of local forest communities).
The main finding in the report is that corporate commitments alone aren’t enough, and the GCP team makes several recommendations for how companies can achieve their goals through coordinated action across jurisdictions that includes both the public and private sectors.
“While companies must act, they cannot do so in isolation,” Andrew Mitchell, Global Canopy Programme’s CEO, said in a statement. “Other influential stakeholders including financial institutions and governments should play a role in creating the right market conditions that will enable a transition to a world where the production of forest risk commodities in a sustainable way becomes the norm and not the exception.”
The report points to the New York Declaration on Forests, an agreement to eliminate deforestation from the production of agricultural commodities by 2020 and achieve zero deforestation by 2030, signed by leaders from both the public and private sector in September last year at a UN Climate Summit, as the type of cross-sector collaboration we need more of.
For any goals to reduce deforestation to be achieved, the researchers found a general need for greater transparency and accountability among public and private powerbrokers driving tropical deforestation.
“Increasingly available data on forest cover, concessions, trade and corporate policies is providing new insights into corporate impacts and dependencies on forests and overall progress towards zero deforestation commitments,” the report says. “Better linkage between emerging transparency initiatives is required to monitor global progress effectively towards 2020 and 2030 targets.”
GCP’s Forest 500 rankings track the key jurisdictions, corporations, investment funds and other powerbrokers who wield the most influence in the deforestation economy. Of the 250 companies in the Forest 500, the researchers found over 60 percent have some kind of policy to address deforestation connected to their business operations — but only 7 percent have commitments to comprehensively remove deforestation from their global supply chains.
This shows a need for leadership in the corporate sector: “Strong leadership can help close the variance gap in the scope and strength of corporate policies among and between supply chain segments, commodities, sectors and regions,” the GCP researchers write in the report.
Most alarmingly, no investors or lenders in the Forest 500 have zero deforestation policies in place, the researchers found. “Most financial institutions do not fully understand deforestation risk,” they write, “so regard it as non-material to investment decisions. Most fail to offer favourable terms to sustainable commodity production. This drives investment towards deforestation, rather than away from it.”
India and China are the global laggards in terms of action on addressing the risk to forests of the global commodities trade. “Neither region yet demonstrates political or corporate commitment towards zero deforestation,” the authors write in the report, noting that India is the largest importer of palm oil in the world and China imports massive amounts of soy and cattle products. Not surprisingly, the researchers found these two countries have very low awareness of forest issues at the political and corporate levels.
The path to a truly deforestation-free global supply chain, according to GCP’s Mitchell, is a public-private partnership that transforms the global commodities trade in such a way that prices come to reflect the true cost of a commodities production.
“Today’s price signal is wrong and the fundamental rules of the game need to be changed to get it right,” Mitchell said. “Bank credit, taxation, subsidies, tariffs and regulation need to favour commodities traded that are not destroying irreplaceable natural capital like rainforests, and penalise those that are. That way the business case for change will become an irresistible force to which the market will respond globally.”