- Fern conducted interviews with and policy reviews of 15 companies, from major consumer-facing companies like IKEA, Nestlé, and Unilever, to producers and traders such as APP (Asia Pulp and Paper), Cargill, Golden Agri-Resources, and Sime Darby.
- One overriding message emerged, Fern reports: companies see government policies and actions — or lack thereof — as one of the main obstacles to cleaning up their supply chains.
- Many companies view the governments of countries where commodities production occurs as having a crucial role to play in “creating an enabling framework of rules, regulations and effective administration without which private sector commitments to tackle deforestation can only have limited impact,” the report states.
The number of companies that have pledged to stop selling or using commodities that drive tropical deforestation has proliferated over the past several years. These commitments to clean up commodities supply chains are often referred to as Zero Deforestation Commitments, and they have been the subject of much scrutiny.
For instance, after analyzing the policies of 600 companies involved in the production of the four globally traded agricultural commodities chiefly responsible for tropical deforestation — cattle, palm oil, soy, and wood products — Amsterdam-based research group Climate Focus reported last year that while there are many commitments designed to address the impacts of deforestation for palm oil and timber production, far fewer are focused on soy and cattle.
Yet the latter two commodities are responsible for the larger share of rainforest destruction: According to a December 2015 study, beef production alone drove 65 percent of gross tropical deforestation between 2001 and 2009, soy drove 16 percent, and palm oil and wood products (which includes timber, pulp, and paper) each drove about 10 percent.
According to another pair of reports released late last year, companies are underestimating the degree to which they may be exposed to deforestation in their supply chains, calling into question their ability to meet their targets.
London-based non-profit CDP (formerly known as the Carbon Disclosure Project) found that just 42 percent of the companies surveyed by the group had analyzed their supply chains to determine how the availability or quality of sustainably produced raw materials will impact their growth strategies for the next five years. The UK-based think tank Global Canopy Programme (GCP), meanwhile, concluded that, despite the growing momentum toward commitments to end tropical deforestation, the pledges made so far “lack the teeth” to make meaningful change in the global commodities supply chain.
That means that the deforestation targets for 2020 and 2030 committed to by the Consumer Goods Forum (a global network of over 400 consumer companies) and signatories to the UN’s New York Declaration on Forests (which includes 40 national governments, 20 sub-national governments, 57 multinational companies, 16 indigenous groups, and 57 civil society organizations) were unlikely to be met, according to GCP.
Now a new report from Brussels-based NGO Fern looks at the barriers to progress on cleaning up the global commodities supply chain from the companies’ own perspective. Fern conducted interviews with and policy reviews of 15 companies, from major consumer-facing companies like IKEA, Nestlé, and Unilever, to producers and traders such as APP (Asia Pulp and Paper), Cargill, Golden Agri-Resources, and Sime Darby.
The companies agreed to speak with Fern on the condition that their individual statements remain anonymous, allowing them to speak candidly. But one overriding message emerged, Fern reports: companies see government policies and actions — or lack thereof — as one of the main obstacles to cleaning up their supply chains.
Many companies view the governments of countries where commodities production occurs as having a crucial role to play in “creating an enabling framework of rules, regulations and effective administration without which private sector commitments to tackle deforestation can only have limited impact,” the report states.
“Ultimately this is about systemic change at landscape level. The only people who can make this work are governments,” a representative of a major supply chain company told Fern. “The private sector can reinforce it, can do some trail blazing … but at the end of the day no one single company can do landscape solutions … unless governments do their part it won’t work.”
Disputes over land ownership and tenure — in other words, lack of clarity over who actually owns the land — were cited by many of the companies as a critical factor impeding progress and a far more intractable issue to solve than environmental degradation. “The lack of clarity over legal concession and plantation boundaries and protected areas — including local communities encroaching on concessions in the absence of clear legal rights — was seen as a particular problem,” according to Fern.
Labor issues and improving the standards of smallholders and local companies were also seen as considerable challenges. Also, “The absence of global agreement on definitions and standards was seen as a problem; virtually every company we interviewed possesses slightly different standards and criteria,” the authors of the report write.
“Areas where companies wanted government support in their efforts to end deforestation included: having clear and consistent policies on customary land tenure; better and more effectively implemented policies on land use planning and the allocation of concessions; stronger protection of forests that are rich in carbon and have high conservation value; and tougher enforcement of existing laws designed to protect forests,” Fern summarized in a statement accompanying the report.
While the costs incurred by large companies in trying to meet their Zero Deforestation Commitments are likely significant, they are not widely viewed as so excessive that they are prohibitive to progress, Fern found.
The group notes that the EU is currently considering an EU Action Plan against deforestation and forest degradation, and that the results of its survey could help inform the legislation. One large palm oil producer and trader agreed: “There’s a case for Europe to be much more forthcoming on setting standards (on forest management) — clear guidelines and standards — the EU should just say what it wants so there’s a clear, defined target to aim for.”
- Henders, S., Persson, U. M., & Kastner, T. (2015). Trading forests: land-use change and carbon emissions embodied in production and exports of forest-risk commodities. Environmental Research Letters, 10(12), 125012. doi:10.1088/1748-9326/10/12/125012
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