May 17, 2017
CDP is pleased to be writing to you as a guest contributor to this newsletter. CDP runs the largest global system for voluntary corporate environmental disclosure. We have partnered with Supply Change over the past three years to foster increased transparency around the management of corporate deforestation.
Addressing the complex challenges of global deforestation requires new forms of multi-stakeholder discussions. Last month, CDP convened 60 corporate representatives and investors for a first-of-its-kind workshop focusing on best practice in water and deforestation management. The links between deforestation management and water stewardship run deep, and both topics offer significant opportunities for companies to make their businesses more sustainable and resilient.
Investors see water and forests disclosure as an emerging marker of best practice. Building on their long history integrating environmental, social and governance (ESG) aspects into their practice, Neuberger Berman hosted CDP’s Water & Forests Workshop and joined other investors in calling for increased water and forests disclosure. Transparency is the “lifeblood” of many aspects of investing, one investor said, highlighting the need for more complete information-sharing.
Practitioners at CDP’s workshop discussed the unique challenges posed by water and forests management and shared their experiences driving progress. Supply chain alignment was identified as critical for meeting zero-deforestation commitments and ensuring an adequate supply of deforestation-free commodities.
CDP and Supply Change participated in a joint session focused on the business case for deforestation management. The evidence is clear. CDP Forests disclosures demonstrate that a substantial share of corporate income depends on commodities linked to deforestation risk – nearly a quarter of the revenues of 187 companies that were analyzed by CDP in 2016.
Meanwhile, many companies are overlooking how deforestation-related risks will impact growth. CDP finds that confidence in the security of future supply is undermined by the fact that only one in five companies assess risks associated with deforestation beyond a six-year horizon. This is troubling, and given the increased scrutiny over impacts on forests, companies can no longer afford to continue with business-as-usual.
Encouragingly, more companies are making progress towards deforestation-free supply chains. Supply Change recently reported that transparency around public deforestation commitments is beginning to gain steam. Progress information is publicly available for over half of commitments tracked by Supply Change over a two-year time frame – a dramatic increase from a year ago, when only one in three commitments were backed by transparent progress.
Companies that disclose publicly through CDP on deforestation policies and commitments, management activities, and progress against targets, see their Supply Change profiles updated regularly, allowing for direct dissemination of their progress to a wide variety of stakeholders.
Increasing disclosure on deforestation management benefits investors, customers, and reporting companies. Transparency helps to make visible the risks that are hiding in plain sight, as well as highlight continuous improvement. We’ve all heard the mantra, “what gets measured gets managed.” Conversely, by failing to communicate its approaches of management, a company may overlook opportunities for ending deforestation.
- Jillian Gladstone, Senior Manager of CDP’s Forests Program
CDP, formerly the Carbon Disclosure Project, runs the largest global system for environmental disclosure. We partner with over 800 institutional investors to motivate the world’s largest companies to reduce deforestation and carbon emissions, and protect water resources. The data we collect enables investors to make better informed decisions in line with a sustainable economy. CDP knows firsthand the importance of disclosure and action around deforestation.
Email us for more information about this partnership, or about how to disclose to CDP this year.
More stories about changing supply chains are summarized below, so keep reading!
- The Supply Change team