SUPPLY CHANGE

 

March 29, 2017

Dear Colleagues,

Last week the Supply Change team published its 2017 report on corporate commitments to reducing deforestation in supply chains. Now entering its third year of existence, the Supply Change platform continues to grow—both in terms of total commitments captured and in depth and detail of commitment information. For the first time we are able to offer a year-on-year comparison of the commitment landscape and measure changes against a baseline. The good news is that progress reporting is now available for over half of all commitments, up from one in three last year.  This represents a 57% growth in reporting since our 2016 report. Clear progress reporting increases transparency and provides assurance to stakeholders that companies are paying attention to the issue and monitoring progress.

On the other hand, 20% of the commitments in the Supply Change database are dormant. A commitment is dormant when the target date has passed and the company has never publicly reported progress. Demonstrating progress through public reporting is critical for reassuring investors, supply chain actors, NGOs, and other stakeholders that the commitment is alive and well.  Therefore, the high number of dormant commitments is an indicator of potential risk to any stakeholder engaged with these companies.

Supply Change Report Cover

Unilever’s senior global advisory manager, Hannah Hislop responded to Supply Change findings suggesting that “having an honest and open dialogue with stakeholders about why things are challenging and writing that up on the website is better than leaving a commitment dormant.”

 She made her remarks during a webinar on March 16th, which Supply Change held in partnership with the Tropical Forest Alliance 2020 (TFA) and Innovation Forum. Over 345 participated in the webinar, which featured the joint launch of Supply Change’s newest report and TFA’s latest Annual Report. A panel of speakers with representatives from Supply Change, TFA, Golden Agri Resources, CDP, and Unilever discussed the implications that these updates have on prospects for achieving fast-approaching targets (e.g. 2020) and the necessity for positive reinforcement in spurring commitment implementation.

Many presenters at last week’s TFA General Assembly reiterated the importance of connecting commitments with reduced impact. Looking ahead, Supply Change’s geographically explicit commitments will take us one step closer to making this connection. This discussion will continue next week at the Innovation Forum’s event where senior representatives from Archer Daniels Midland, Cargill, JBS, Kimberly Clark, McDonalds, Permian Global, Sime Darby, Waxman Strategies will discuss how companies can promote sustainable supply chains to reduce deforestation and protect company reputations.

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 D.C., 3-4 April 2017

As a Supporting Partner, Forest Trends’ Supply Change Initiative invites you to join us at an Innovation Forum conference in April. This international multi-stakeholder meeting is designed to provide practical guidance for the implementation of zero deforestation policies. Already confirmed participants include senior representatives from the likes of Archer Daniels Midland, Cargill, JBS, Kimberly Clark, McDonalds, Permian Global, Sime Darby, Waxman Strategies, and many more.

Any contacts of ours are eligible for a 20% discount to attend the event. Please use the coupon code SC20 when registering online here.

 

12th Round Table on Responsible Soy Annual Conference (RT12): Zero deforestation- Transparency and Scale
Lille, France, 31 May - 1 June 2017

RT12 aims to encourage participants to share ideas and solutions for achieving continuous improvement in the soy sector. In particular, discussions will focus on mapping deforestation risks in supply chains, tools for improving transparency, pathways for scaling up sustainable production, and collaboration among different soy certification schemes.

Learn more about the RT12 here.

 

 

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Recent News

Don’t bank on it

More than half of 50 of the largest palm oil producers and traders inconsistently report on how they manage their land banks according to new research by the Zoological Society of London. The authors quantify the land areas that companies use for plantings, conservation, and infrastructure as well as those areas that are RSPO-certified or remain unplanted. Understanding which concession areas remain unplanted is vital information for investors and downstream buyers to manage deforestation risks from palm oil producers, which is why it is noteworthy that more than two thirds of these companies have not disclosed this information. Consequently, this report highlights clear areas for improvement in improving transparency among producers.
Read more at SPOTT

 

Certified Deforestation-Free?

The Round Table on Responsible Soy’s (RTRS) recently released responsible soy standard 3.0 is “the world’s first zero deforestation multi-stakeholder certification standard,” RTRS executive director Marcelo Viscenti told FeedNavigator. The standard now includes a provision requiring a third party zero-deforestation assessment to be carried out before a certification can be issued. All plantations must prove that they have not impacted any native forests, wetlands, or riverbanks since June of 2016. Along with the addition of this landmark provision, the standard also introduces human rights requirements and removes components, which have proven prohibitive for smallholders, such as requiring a High Carbon Value assessment.
Read more from Food Navigator

 

Going public

Last week, after a year and a half court battle, Indonesia’s highest court forced the Indonesian Government to share palm oil concession maps with non-profit Forest Watch Indonesia.  This comes after the government pursued several appeals. The Government will share the names of plantation companies along with the precise boundaries, coordinates, and areas of their concessions to comply with the non-profit’s 2015 freedom of information request.
Read more from Mongabay.com

 

Certifications for Everyone!

The government-backed Malaysian Sustainable Palm Oil (MPSO) certification scheme has been declared mandatory.  After two years of voluntary compliance, the Malaysian government has announced that all domestic production must be MSPO-certified by the end of 2019. The MSPO requirement is part of a push to improve global perceptions of the quality and sustainability of supply--particularly for environmentally conscious consumers in Malaysia's second largest market, the European Union. A set of staggered target dates have been set, and correspond to the ease of MSPO standard implementation.  First up are producers that are already RSPO (Roundtable on Sustainable Palm Oil) certified, then non-certified corporate producers, then smallholders - who may be granted financial assistance to meet the standard.
Read more from the Malaysian Palm Oil Council (MPOC)

 

 

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Monthly Insights from the Supply Change Desk

Each month, the Supply Change team reviews hundreds of corporate commitments to reduce deforestation in commodity supply chains. Monthly Insights shines a spotlight on companies that deserve recognition for their diligence or innovation at crafting, implementing, or reporting upon their commitments.
 

Shedding a Tier

Many downstream companies find it challenging to reach back along the supply chain and affect the behavior of their second tier suppliers (the suppliers of their suppliers). Scant few companies disclose their first tier suppliers, and almost none disclose their second tier. The Kellogg Company has gone above and beyond by listing all of its indirect suppliers that have come under watchdog scrutiny and providing a description of how it has leveraged its purchasing power to apply pressure and avoid exposure to deforestation linked palm oil.
Read More on the Kellogg Company


Taking Ownership

The scope and coverage of a company’s commitment to reduce commodity-driven deforestation can be difficult to assess; it’s especially challenging when the company has a complex ownership structure. Ownership complexity can make it difficult to understand which business segments are covered by a commitment, so it is helpful when companies clarify commitment parameters. The British manufacturer PZ Cussons explicitly outlines how its palm oil commitment applies to its two joint ventures. PZ Cusson’s commitment documentation also includes an explanation of how it aligns with the commitment of its venture partner, Wilmar, as well as information on its recourse for non-compliant suppliers. Providing this level of detail helps to boost transparency and to manage expectations around a commitment’s implementation. 
Read more on PZ Cussons

 

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