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Companies still not doing enough to cut deforestation from commodities supply chains: report

  • The latest “Forest 500” rankings are out from the Global Canopy Programme (GCP), and the main takeaway is that the global companies with the most influence over forests still aren’t doing enough to cut tropical deforestation out of their supply chains.
  • Just five companies improved their policies enough over the last year to score a perfect five out of five in the 2017 rankings. Commitments to root deforestation out of timber and palm oil supply chains did increase, according to the report, but less than one-fourth of the Forest 500 companies have adopted policies to cover all of the commodities in their supply chains.
  • Progress among financial institutions also continues to be sluggish, the GCP’s researchers found, with just 13 financial institutions scoring four out of five and 65 scoring zero. No financial institutions have received the maximum possible score.

The latest “Forest 500” rankings are out today from the Global Canopy Programme (GCP), and the main takeaway is that the global companies with the most influence over forests still aren’t doing enough to cut tropical deforestation out of their supply chains.

The annual Forest 500 report analyzes the 250 companies and 150 financial institutions (as well as the 50 most crucial jurisdictions and 50 other powerbrokers) that “have the largest potential to prevent tropical deforestation.” Every year since 2014 the GCP has assigned scores to each of these entities based on the strength of the policies they’ve adopted to address their exposure to deforestation risks from the production of four commodities — cattle, palm oil, soy, and timber (which includes pulp and paper) — that are collectively responsible for the majority of tropical forest destruction driven by agricultural operations today.

This year’s rankings show that companies have made little progress since last year’s report, which found that, overall, the Forest 500 were not making enough headway to meet 2020 deforestation targets.

Just five companies have since improved their policies enough to score a perfect five out of five in the 2017 rankings. Commitments to root deforestation out of timber and palm oil supply chains did increase, according to the report, but less than one-fourth of the Forest 500 companies have adopted policies to cover all of the commodities in their supply chains. The total number of companies that have received top marks now stands at 18, while 25 companies still score a zero out of five.

Sarah Lake, who leads the Supply Chains Programme at GCP, notes that few companies in the cattle sector, in particular, have taken strong steps to sever their connections to deforestation in the tropics. Just 17 percent of cattle companies in the Forest 500 have a policy designed to help protect the forests where their cattle are produced or procured, and, what’s more, at least four Forest 500 companies have actually dropped policies addressing deforestation for cattle products since 2014.

“Far more can be done to ensure that cattle rearing for beef and leather does not lead to tropical forests being cleared,” Lake said in a statement.

But Lake also points out that the majority of Forest 500 companies have yet to take comprehensive action regarding their connection to forest destruction: “This year’s ranking clearly shows that while some leading companies have recognised the importance of tackling deforestation in their supply chains, most have not, and many are taking a piecemeal approach.”

Progress among financial institutions also continues to be sluggish, the GCP’s researchers found, with just 13 financial institutions scoring four out of five and 65 scoring zero. No financial institutions have received the maximum possible score.

There are a number of public-private partnerships to address deforestation, such as the New York Declaration on Forests and the Consumer Goods Forum, that have set 2020 as the deadline for meeting various benchmarks on halting tropical deforestation. If present trends continue, however, that deadline will not be met, according to the authors of the 2017 Forest 500 report.

“At the current rate, the companies and financial institutions with the greatest influence on forests will fail to adopt adequate policies, or implement these policies by 2020,” they write. “As a result, global goals of zero commodity-driven deforestation by 2020 will be missed.”

The strength of existing commitments varies by commodity, the authors add, with policies covering timber and palm oil being the most common and robust, while the cattle and soy sectors are lagging significantly behind. “Nevertheless, no sector is currently on track to achieve deforestation-free supply chains by 2020,” the authors note.

“Companies need to develop policies across all their supply chains to ensure forests are protected, and financial institutions need to ensure that their investment policies recognise deforestation risks in their portfolios,” Lake said.

Tropical deforestation for an acacia timber plantation in Sabah, Malaysia. Photo by Rhett Butler.

Follow Mike Gaworecki on Twitter: @mikeg2001

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