Photo: Glenn Hurowtiz
Forests Trends Report Highlights Challenges and Opportunities in Making Deforestation Commitments Work
The past few years have produced a wave of deforestation commitments from companies, big and small, all around the world, in a telling sign of how mainstream environmental protection has become. Yet, to this day, deforestation continues, mostly unabated, in Indonesia, Brazil, the Congo and other biodiversity hotspots, and remains a major source of greenhouse gas emissions. A just released report from the non-profit organization Forest Trends aims to provide a snapshot of what these commitments do and do not mean, in a single, easily accessible place.
“I see this report as being a way to raise awareness, and build consensus on how to move forward,” said Jason Clay, Senior Vice President for Food & Markets at the World Wildlife Foundation (WWF), a partner on the report. “We have a lot of companies making commitments, and we don’t know what they add up to.”
The report, entitled Supply Change: Tracking Corporate Commitments to Deforestation-free Supply Chains, looks at 579 public commitments from 366 companies who purchase at least one of four major commodities that account for a third of the nearly 10 million hectares of tropical forests lost every year – palm, soy, timber and cattle. Thus, it provides a benchmark for how companies are responding to public pressure to eliminate deforestation from their supply chain, detailing what the existing commitments mean, how they differ between industries, and what more needs to be done (both by companies and other actors) to ensure they have the impact needed to stop deforestation.
“What we’re trying to highlight here is that it’s not just setting the commitment, but it’s also reporting on progress, whether it’s telling a bright story, or showing challenges on where we need collaboration,” said Stephen Donofrio, the Senior Advisor to the Supply Change project. It is in response to the demand for better information on global efforts to tackle what is now widely accepted as a major global environmental challenge.
Overall, the report found positive, incremental progress compared to last year, but also several challenges. One pertinent issue is that, while palm oil has the highest level of action – more than half of all tracked companies have made public commitments, most likely due to the efforts of civil society groups – the other commodities are lagging. Particularly worrisome is the cattle industry, which has the fewest commitments, even though it accounts for far more deforestation than the three other commodities, and 10 times more than palm alone. The reasons, according to Donofrio, are complex.
“The cattle value chain is very different than palm,” said Donofrio. “The majority of cattle that is produced is consumed domestically in these countries, whereas palm oil [often] gets exported around the world.” Moreover, there are not nearly as many multi-stakeholder initiatives in the cattle industry as in palm oil or timber. This is a ripe place for more attention, both from companies and from outside actors, including NGOs.
Another challenge is the slow progress towards increasing transparency. According to Forest Trends, public information on the tangible steps companies are taking towards achieving their goals can be found in just one-third of commitments; obviously, that’s not nearly enough. This inhibits Supply Change’s work directly.
“We’re trying to show that companies are making progress to making those commitments, and the only way we can do that is if we have regular information from these companies,” said Donofrio.
A significant barrier to progress: Most companies are self-reporting results rather than using independent, third-party verification. Even if a company is being completely honest, allowing outsiders to analyze and help present the data not only builds credibility but allows for information to be standardized within an industry, amplifying its impact.
Another improvement that could make a big difference in better understanding supply chains and increasing transparency would involve companies releasing more information about their suppliers. According to Donofrio, that is currently very rare. “Very few companies are providing that level of information about that supply chain.”
For Clay, having this information could aid the bigger battle: Figuring out how to change practices among the worst suppliers, something he hopes companies are willing to do, even if it takes more time.
“If we can begin to move the bottom, then that’s where the biggest potential impacts are,” said Clay. “With nearly all commodities, the bottom 25 percent of suppliers produce 50 percent of the negative impact, and only about 10 percent of the product.”
Government’s Role Is Important
A lot of attention is being paid to companies that go beyond governments in commitments to ending deforestation and combating greenhouse gas emissions, the impact companies can make without countries creating legal systems to protect landscapes is limited.
“Certifications schemes and deforestation-free commitments are a result of governments not doing enough, as most of the deforestation occurring is illegal,” said Clay. “What companies are trying to do is what governments [around the world] should be doing.”
In the end, supply chain and no-deforestation commitments are important, but without better transparency, independent verification and stronger legal enforcement from governments, they will remain little more than what far-too-many are today: unenforceable, well-intentioned pieces of paper. According to Donofrio, we have to recognize that this is an effort much larger than just the private sector, and there is a role for civil society, media, multi-stakeholder initiatives and governments to play – especially as scientists sound alarm bells about the key role forests play in regulating global climate.
“These are challenging commitments to achieve, and as more and more progress is being made, companies are also encountering challenges,” said Donofrio. “There is a recognition among companies and stakeholders that, as every day passes, the time-frame to getting those commitments achieved is [shrinking]”.
Projects like Supply Change, which allows individuals to easily assess and compare commitments, and their partner, the Carbon Disclosure Project, which aims to increase transparency and standardize reporting, can play a key role in helping clean up global supply chains. Progress is being made, but it’s more important than ever that all actors – companies, experts, governments and civil society – work together to ensure deforestation ends before it’s too late.