SUPPLY CHANGE

Dear Colleagues,

At the Tropical Forest Alliance (TFA) 2020 annual general assembly in Jakarta, Indonesia earlier this month, companies expressed support for Indonesia’s President Joko Widodo’s peat protection and restoration program. A group of 63 big-name producers, including Cargill and Wilmar International, committed to adopt more inclusive and effective fire management systems, build local capacity to reduce fires on concession areas, and submit maps of peatlands in concession areas to assist in government monitoring and restoration efforts. Consumer Goods Forum members that source palm oil, pulp and paper from Indonesia, including General Mills and Kao Corporation, also indicated their intent to align with and support the newly-created Peat Land Restoration Agency (BRG) mandate, using the TFA as a platform for collaboration.  

This announcement of corporate support comes at an important time for Indonesia. President Widodo’s peat protection and restoration program is the latest in a series of actions to take control of the environmental narrative and ensure that last year’s deadly peat-based fires are prevented in the future. In addition to banning peatland conversion last November, he established the BRG with performance-based financial support from the Norwegian and American Governments, naming Nazir Foed – an experienced conservationist and former employee of the World Wildlife Fund – as its director.  With much of Indonesia’s peatland drained by agribusinesses, corporate support for this home-grown initiative is key to reducing the risk of future fires and achieving the 2016 BRG intermediary goal of restoring/re-wetting 30%, or 150,000 hectares, of the 2 million hectares they hope to restore.  

By hosting the meeting in Jakarta, the TFA 2020 signaled the strategic importance of consolidating support for environmental improvements in Indonesia to achieve their mission of producing deforestation-free commodities through cross-sectoral collaboration. This was one of six initiatives outlined in its first annual report, with other regionally-focused efforts in West and Central Africa, Brazil, China and India. Additionally, the report outlines two other initiatives--the Better Growth without Deforestation Initiative and Financial Sector Engagement Initiative--to be finalized by 2018. The TFA 2020 highlighted its 2015 efforts to establish national standards for palm oil development in Africa through its Africa Palm Oil Initiative. This included a recently held a regional workshop in Ghana where nine countries agreed to continue developing national and regional principles for West and Central Africa that will help  guide responsible palm oil development. The final goal of these efforts is to sign a regional accord by next November’s UN Climate Change Conference.  

The TFA 2020’s six initiatives seek to provide actionable forms of engagement for partners to advance strategic goals for sustainable practice and the reduction of commodity-related deforestation. It remains to be seen whether, following their most recent meeting and subsequent reports, this will happen. However, the number of involved private-sector and governmental organizations has grown, indicating that there may in fact be a chance for their efforts to succeed.

More stories about changing supply chains are summarized below, so keep reading!

-The Supply Change team

 

 

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Upcoming Events

Innovation Forum: How business can tackle deforestation
Washington DC, 6-7 April 2016

As part of a broader, global series of meetings, including London and Singapore, this forum will bring together key corporate practitioners, NGOs and governmental representatives for a post COP21 outlook, to discuss and debate how far we have come in tackling deforestation risks, implementing policies and collaborating effectively.

There will be focused debates and practical working sessions on smallholder farmer engagement, forest restoration, meeting company commitments, and clarifying zero net-zero deforestation.

You can see more info on the event here. Forest Trends’ Ecosystem Marketplace is pleased to be a Media Partner at the event and welcomes our friends and colleagues to register at a 20% discount using the code IF20D.

 

Resources for the Future: Reducing Deforestation in Commodity Supply Chains Seminar
Washington DC, 6 April 2016

This event is part of the First Wednesday Seminar Series on environmental and resources topics hosted by the Resources of the Future (RFF). Stephen Donofrio, Senior Advisor for Supply Change, and other prominent speakers will discuss private and governmental approaches for reducing deforestation from commodity supply chains.

The discussion will focus on drawing out the synergies between voluntary environmental corporate commitments, eco-certifications, voluntary moratoria, supply chain transparency and Reducing Emissions from Deforestation and Forest Degradation (REDD+) mechanisms. Learn more about the event here.

 

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Recent News

RSPO says NO!

Last week the Roundtable on Sustainable Palm Oil (RSPO) suspended membership of one of Malaysia’s largest palm oil conglomerates, IOI Group, because of alleged transgressions in its operations in Indonesian Borneo. NGOs submitted formal grievances against the company to the RSPO beginning six years ago. “The RSPO allowed IOI to abuse its systems in attempts to sweep serious non-compliance with law and RSPO standards and procedures under the carpet,” suggested Eric Wakker, of the consultancy Aidenvironment. Ahead of the ruling, non-profit Chain Reaction Research warned of potential economic risks of suspension. IOI attempted to reassure investors that less than 0.5 percent of revenues came from sales of certified sustainable palm oil. Nonetheless their share price dropped following the news.
Read more from Mongabay.

 

 

Making a Fashion Statement:

Six Chinese companies joined almost 60 multi-national fashion designers and brands by pledging to not source fashion materials from rare and endangered forests. This is part of the CanopyStyle pledge campaign, an initiative of the environmental non-profit Canopy. These companies comprise 65 percent of the Chinese market in the production of rayon, a wood-based fiber material associated with deforestation, says Canopy’s founder, Nicole Rycroft. “With the continued shift in brands' environmental requirements, incorporating sustainable forest fiber procurement criteria is a sound business decision,” explained Dr. Christian Reisinger, CEO of Shandong Yamei. Li Baikuan of Tangshan Sanyou suggested the apparel industry could collaborate by using “alternative fibers such as garment waste, recovered fabrics, agricultural residues, and other non-woods.”
Read more on Fibre 2 Fashion.

 

Greenpeace grades company performance, D for Deforestation

Earlier this month, Greenpeace released a Company Scorecard evaluating 14 global consumer goods companies and their performance in removing deforestation from their palm oil supply. Companies were assessed based on responsible sourcing, transparent reporting, including correcting noncompliance for all suppliers, and support for industry-wide reforms such as the Palm Oil Innovation Group (POIG). Notably, none of the companies were able to ensure that their palm oil supply was not associated with deforestation. The three worst performing companies were Colgate Palmolive, Johnson & Johnson and Pepsico, all of which made no deforestation commitments in 2014. The Italian confectioner Ferrerro stood out as the only company capable of tracing its palm oil supply back to plantations.
Read more from Eco-business.

 

Palm Oil’s Strictest Standards

POIG has released a revised set of verification indicators on palm oil production. The POIG standards are meant to complement the RSPO criteria by addressing specific gaps, such as: High Carbon Stock (HCS) forest protection, peatland protection, use of pesticides, human rights protections, and labor practices. Beginning in March 2016, adherence to the standards is compulsory for POIG member companies. Three of its member companies, Agropalma, New Britain Palm Oil, and Daabon, were extensively involved in test driving the new set of standards and have set out to prove that producing deforestation-free palm oil is both operationally possible and economically feasible.
Read more from Eco-Business.

 

Making it personal, going deforestation-free

Allie Goldstein, a Senior Associate at Ecosystem Marketplace, recently tried living deforestation-free, not buying products containing the four commodities most associated with tropical deforestation. With palm oil found in over half of consumer products and labeled under at least 224 different names, Goldstein struggled to find basic items such as soap and cosmetics. She had to buy many products in bulk because of unlabeled wood-based packaging and ate a vegan diet, as most domesticated terrestrial animals are fed untraceable soy-based feeds. Goldstein concludes that it is more important for activists to “urg[e] businesses to publicly commit to sourcing deforestation-free commodities” than painstakingly checking labels for sustainability.
Read more on the Washington Post.

 

The Mounting Casualties of Deforestation Divestment

The world’s largest sovereign wealth fund, the Norwegian Government Pension Fund Global (GPFG) – worth $828B, continues to uphold its commitment to responsible investment. Its 2015 Annual Report highlights the fund’s recent divestments, including 11 companies whose operations are associated with substantial deforestation. These companies are the latest in a series of expulsions based on a risk-based investment plan. Since 2012 the GPFG has divested from over 120 companies, with over 50 of those companies being linked to deforestation.  Despite the irony of an oil-based fund making environmental risk decisions, the GPFG is pioneering a model of investment where decisions are linked to sustainable forest practices.
Read more from Mongabay.

 

GLAD to help with deforestation

A new satellite mapping system has been released by the institute for Global Land Analysis and Discovery (GLAD). This system is able to autonomously monitor changes in forest cover and send alerts when it discovers suspicious activity.  Although satellites have already been used to monitor deforestation, the GLAD system sends alerts at a speed that was previously unheard of. The swiftness of the alerts allows enforcement officials to catch illegal deforestation in progress and can provide useful hard evidence to support convictions.
Read more from The Guardian.

 

Fire-free villages are catchin’

116 Indonesian villages impacted by last year’s forest fires have launched local education campaigns and patrols to discourage illegal burning of forests. Sering, a village in the Riau province using the fire-free village model, saw steep declines in areas affected by fire. Of the over 1 million hectares the village controls, approximately 80 were burned in 2013 before the program started. Only 11 hectares were burned in 2015, and no fires have been reported this year. Part of the solution is a push for greater local authority and accountability in suppressing forest fires said Najib Asmani, advisor to the Provincial Governor of South Sumatra.
Read more on climate Home.

 

 

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