SUPPLY CHANGE

 

July 18, 2016

Dear colleagues,

We’re happy to report that we’ve just had a substantial meeting of the minds. Nearly 350 people joined our July 12th webinar, co-hosted by Forest Trends and Innovation Forum, and heard a panel of experts discuss the state and trends of corporate commitments to reducing commodity-driven deforestation. The event featured a deep dive into the findings of Supply Change’s newest report, Tracking Corporate Commitments to Deforestation-free Supply Chains, 2016. If you missed it live, check out the recording on the report landing page.

Panelists from CDP (formerly the Carbon Disclosure Project), the Tropical Forest Alliance (TFA), the Consumer Goods Forum (CGF), and of course the Innovation Forum, zeroed in on three key findings.

The first was a somewhat troubling paradox – namely, that those companies reporting progress on their commitments were 74% of the way to their goal, but only 1/3 of commitments had progress information available. The big question now is: what does this mean? It could, for example, reflect a desire to hide poor progress, but it could also reflect a desire to hold off on announcing progress until the time is right, or it may just mean that “there is no agreed upon assessment standard for zero net deforestation,” as CGF Sustainability Director Ignacio Gavilan pointed out. Either way, panelists urged companies to share their progress for the good of all.

“Tracking progress is vital, no matter where a company is on its journey,” said Jillian Gladstone of CDP. “Transparency is a critical element in driving change.”

Jillian also shared CDP’s new supply chain performance plan, which helps companies review their procurement processes and strategize on how to communicate their progress toward commitment achievement.

Panelists also focused on the finding that larger companies are more likely to have a commitment than smaller companies that source or produce the same commodities. Toby Webb, the founder of the Innovation Forum, suggested that this reflects the influence that NGOs have had on global companies, while smaller domestic companies are both less likely to be targeted by NGO campaigns and less likely to see reputational risk.

Finally, there’s the issue of jurisdictional sourcing, where an entire state or country would require all of its producers to meet sustainable production standards. This makes it easier for companies to source from that region without having to check on the integrity of individual suppliers. Marco Albani, Director of TFA’s 2020 initiative, said that “Jurisdictional sourcing... addresses many of the barriers to achieving deforestation-free commodities at the scale at which decisions around land use are made.” Some of the barriers include capacity building for smallholders and so-called “leakage” – where progress by sustainable plantations is negated by nearby competitors with deforestation-intensive practices.

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

-The Supply Change team

 

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Upcoming Events

If you enjoyed the webinar discussion, please note that Innovation Forum will be addressing topics such as this at their upcoming “How business can tackle deforestation” events:

Please get in touch with Lea Vavrik for any questions or comments at lea.vavrik@innovation-forum.co.uk.

 

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Recent News

IPOP pops under government pressure?

A group of the world’s largest palm oil refiners agreed to disband and dissolve their 2014 collective commitment to remove deforestation and exploitation of people and local communities from their palm oil supply chains. In a statement, Indonesia Palm Oil Pledge (IPOP) signatories Golden Agri Resources, Wilmar, Cargill, Asian Agri, Musim Mas, and Agro Lestari - representing 60% of Indonesian palm oil exports - asserted they would uphold their existing individual sustainability commitments, but that governmental legislation had fulfilled the purpose of IPOP. However, while governmental legislation mandates protection of primary forests and peatland, it does not require protection of secondary forests and high-carbon-content bushlands as IPOP did. Gemma Tillack, Agribusiness Campaign Director for Rainforest Action Network, argued that “the government led Indonesian Sustainable Palm Oil (ISPO) system has an important role to play, but it will not deliver the extension services, market access and land security for small holders promised by the IPOP.”
Read more at the Straight Times.

 

Stage fright over dirty palm oil contracts

Bunge became the latest agribusiness to cancel future palm oil contracts with the producer IOI Corporation for its failure to meet its deforestation policy and for its corresponding suspension from the Roundtable on Sustainable Palm Oil (RSPO). IOI’s environmental transgressions not only led to a boycott among many of its large palm oil purchasers, but also hurt the company’s bottom line and boosted sales of its competitor, Kuala Lumpur Kepong Bhd. Another purchaser, Cargill, has called on IOI to establish a deforestation policy and implementation plan. Yet many green groups view this as ineffective or worse. “Cargill’s willingness to do business with repeat deforesters like IOI makes their sustainability policy look like a joke,” said Glenn Hurowitz, Managing Director at the advocacy and campaign organization, Waxman Strategies.
Read more on Mongabay.com

 

Moo-ving ahead on Global Strategy

By unanimous vote, the board of the Global Roundtable for Sustainable Beef (GRSB) approved its five-year strategy. The GRSB will aim to be relevant to the industry, achieve tangible impacts in sustainability, and act as a trusted global voice on beef and sustainability. The GRSB does not set standards and will not create a certification program, but instead will work to provide a common baseline understanding of sustainable beef that national roundtables and other initiatives can use to meet their needs. "GRSB does not have the capacity to work everywhere, and since we started we have had a clear vision that local knowledge and experience will be the key to sustainability” said Mr. Petre, GRSB Executive Director.
Read more from the Cattle Site.

 

Makeover for Ag trade legislation

Two conservation organizations urged Ministers to develop a European Union (EU) action plan on deforestation and forest degradation to ensure that only legally and sustainably produced commodities are imported. In their letter, Fern and Conservation International Europe praised the Forest Law Enforcement Governance and Trade Program’s establishment of legally binding bilateral trade agreements on timber, because of the documented improvements in forest governance in commodity producing countries. But policies and mechanisms like these, they argued, should be replicated for trade in palm oil, cattle, and soy-based products, which are also major contributors to deforestation and climate change. A recently released report finds that achieving global climate goals will require government and company commitments toward reducing deforestation.
Read more at Food Navigator.

 

Teak’s Last Stand

A new government moratorium on timber production in Burma’s Pegu Yoma mountain range brings hope that its teak population, Tectona grandis, might recover. The ban will run for 10 years (2017-2027) and applies to logging by corporations, communities, and illicit traders. Although praised as progress, the ban faces great hurdles in the realm of enforcement. In the past, Burma’s military government has undermined regulatory efforts and even been found complicit in extralegal harvests. It has yet to be seen whether the new civilian-led government and Ministry of Natural Resources and Environmental Conservation will be able to control the region and enforce the ban.
Read more at The Irrawaddy


EUTR unswayed by UK

The UK’s recent vote to exit the EU, dubbed ‘Brexit’, is unlikely to disrupt existing laws governing UK timber trade, asserts Kerstin Canby of Forest Trends. The UK does not officially leave the EU until its two year notice period has expired; leaving the EUTR (EU Timber Regulations) intact until that time. Upon exiting the EU, the UK may choose to retain access to Europe’s lucrative “single market” by adhering to EU standards - as Norway does. In the event that the UK chooses not to follow EU regulations, they would most likely fall back upon national regulations such as the Timber Products Regulation of 2013 and continue to engage with the EUTR by way of the Timber Regulation Enforcement Exchange.
Read more at Ecosystem Marketplace


A clean air coalition, for peat’s sake!

Ahead of this year’s haze season, five companies - Unilever, Ayam Brand, Danone, IKEA, and Wildlife Reserves Singapore - have banded together to promote the switch to sustainably-produced palm oil. The group calls itself the Singapore Alliance on Sustainable Palm Oil, and announced that it seeks to reduce the slash-and-burn practices that cause haze pollution. The alliance is supported by WWF Singapore, which will actively recruit more companies to join. This corporate/NGO alliance is the latest in a string of Singaporean anti-haze efforts such as the government’s Transboundary Haze Pollution Act of 2014.
Read more at Channel News Asi

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