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Are global commodities producers living up to their climate promises?

  • A new report by Amsterdam-based research think tank Climate Focus and a coalition of 12 other research organizations and civil society groups examines the progress made so far on implementing supply chain commitments to meet the second of ten goals laid out in the 2014 New York Declaration on Forests (NYDF).
  • Goal two of the NYDF calls on companies to end deforestation associated with the production of key agricultural commodities. Halting deforestation is one of the key tactics embedded in the Paris Climate Agreement for drawing down the world’s greenhouse gas emissions.
  • The Climate Focus report analyzes 600 companies involved in the production of the “big four” globally traded commodities — cattle, palm oil, soy, and wood — and finds that progress is being made, but calls the pace of progress too gradual.

More than 90 countries have now ratified the Paris Climate Agreement, which will enter into force tomorrow. Just 55 countries representing at least 55 percent of the world’s greenhouse gas emissions needed to formally adopt the agreement to trigger its entry into force, and that threshold was reached far quicker than anyone could have expected.

But the nations of the world aren’t the only entities seeking to rein in the amount of climate-cooking emissions for which they’re responsible. Hundreds of companies have made sustainability commitments and adopted policies that would make them part of the fight against global warming, as well. The pertinent question then becomes: Is the private sector living up to its climate promises?

A new report by Amsterdam-based research think tank Climate Focus and a coalition of 12 other research organizations and civil society groups examines the progress made so far on implementing supply chain commitments to meet the second of ten goals laid out in the 2014 New York Declaration on Forests (NYDF), a commitment by 190 national governments, sub-national governments, multinational companies, indigenous groups, and NGOs to cut deforestation in half by 2020 and end it altogether by 2030.

Goal two of the NYDF calls on companies to end deforestation associated with the production of key agricultural commodities. Halting deforestation is one of the key tactics embedded in the Paris Climate Agreement for drawing down the world’s greenhouse gas emissions. Not only does deforestation create carbon emissions directly by destroying trees and other vegetation, but keeping forests standing will also allow them to continue sequestering carbon that would otherwise be pumped into Earth’s atmosphere, thus further mitigating future global warming.

The Climate Focus report analyzes 600 companies involved in the production of the “big four” globally traded commodities — cattle, palm oil, soy, and wood — which are collectively responsible for 40 percent of total global deforestation.

Much of that deforestation is occurring in tropical forests. A December 2015 study found that, between 2000 and 2011, an average deforestation area of 3.8 million hectare (9.4 million acres) and the equivalent of 1.6 gigatonnes of carbon emissions were embodied in the production of beef, soy, palm oil, and wood products in just seven Southeast Asian and Latin American tropical countries with high deforestation rates.

According to the Climate Focus report, 415 of the 600 companies examined have adopted more than 700 different supply chain commitments, mostly addressing emissions from palm oil and timber production. Fewer commitments focus on soy and cattle, the primary driver of deforestation (according to that December 2015 study, beef production is responsible for 65 percent of total tropical deforestation between 2001 and 2009).

The good news is that implementation of these commitments is largely underway. Between 84 and 87 percent of companies that have made commitments have identified if and where their operations put forests at risk, while 56 to 70 percent of producers, processors, and traders as well as 64 to 87 percent of retailers and manufacturers have established commodities purchasing guidelines in line with their commitments. Most companies are using some kind of certification scheme to source sustainable goods, the report states.

The not-so-good news is that despite the fact that corporate forest protection commitments continue to surge — some 100 companies have made 212 new commitments since December 2015 — the researchers found that progress is too gradual. Most commitments are not time-bound, and progress on implementation is mixed. Nearly all corporate commitments address just one commodity or a specific landscape — a mere 43 of the 415 companies with commitments have set company-wide targets that cover all commodities relevant to their operations.

Sixty percent of the commitments examined in the report cover palm oil, while 53 percent cover wood, 21 percent cover soy, and a mere 12 percent cover cattle. “Raising cattle is one of the leading causes of deforestation, but it’s difficult for the sector to make commitments as cows change hands multiple times over their lifespans,” Charlotte Streck, co-founder and director of Climate Focus, said in a statement. “Tracing deforestation to the specific animal is a major challenge.”

More action on cattle and other commodities with the biggest forest impacts is clearly needed, Streck added. There’s also a need for more partnerships between companies and governments, as well as among retailers, traders, and producers.

Using these sorts of strategies, the report suggests, Brazil has made some progress towards removing deforestation from beef and soy production. In the Brazilian State of Pará, for instance, nearly 90 percent of federally inspected slaughterhouses have signed agreements with Greenpeace that commit them to avoiding the purchase of cattle from ranches that contribute to deforestation. Meanwhile, Brazil’s Soy Moratorium is a public-private initiative that has led to significant reductions in deforestation levels.

“Tomorrow, as the Paris Agreement comes into force, nearly 200 governments shift focus from climate commitments to action,” Streck said. “We need this same shift in corporate sustainability commitments. But action has to be fast as natural forests are still disappearing at an alarming rate, posing the risk that supply chains may only become ‘deforestation-free’ once forests are gone.”

Governments have a major role to play in effecting that corporate shift toward sustainability. Companies interviewed for the report said that poor land-use planning, weak law enforcement, and insufficient monitoring and accountability systems in forest countries where they have operations make it difficult for them to achieve their pledges to go deforestation-free.

“Ultimately, it is not pledges, but realizing those pledges that will end deforestation,” according to Streck. “Implementation and monitoring are key. More action by both public and private sector players — and sooner — is needed to have a meaningful impact on deforestation by 2020 and to ultimately end it by 2030.”

Borneo rainforest. Photo by Rhett Butler.

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