February 28, 2019
We’re only a couple of months into an action-packed 2019, as companies look to hit their commitments to reduce or eliminate deforestation from their agricultural supply chains. Almost one-third of the commitments profiled by Supply Change (279 out of 858) have a 2020 deadline – including members of several multi-stakeholder initiatives (e.g. Consumer Goods Forum, Tropical Forest Alliance 2020, New York Declaration on Forests) with collective deforestation commitments targeting 2020.
We’ve tracked less than one-quarter (64 out of the 279 with a 2020 deadline) of commitments that have been fulfilled or are close (over 90% achieved) to being fulfilled, which means many companies will need to ramp-up their efforts this year if they are to achieve their goals. Lack of traceability is also a major obstacle for companies to achieve and verify the progress they make towards reducing deforestation – if you don’t know where your products are coming from, you can’t guarantee that forests weren’t destroyed in order to produce them. Supply Change found that only 35% of commitments include aspirations to improve the traceability. Technological improvements could go a long way in illuminating murky supply chains and holding companies accountable.
In light of this predicament, a new initiative was launched at the annual meeting of the World Economic Forum in Davos, Switzerland last month to promote emerging technologies like blockchain in food supply chains. These technological improvements could cultivate greater accountability and traceability in commodity supply chains, and satisfy increasing consumer and government demands that companies be able to pinpoint sources of food contamination and monitor environmental concerns like deforestation. Effective traceability is essential for sustainable, deforestation-free supply chains for all the commodities that Supply Change tracks, but especially for cattle supply chains.
Monitoring deforestation in cattle supply chains is especially difficult, because cattle often spend their lives on several different ranches before they reach the slaughterhouse and each ranch must be accounted for before the cattle can be considered deforestation-free. Digital traceability systems for cattle, like the one in Uruguay, have been revolutionary in monitoring both environmental destruction and food safety concerns.
Although progress towards achieving zero net deforestation in commodity supply chains has been slow, business leaders are increasingly recognizing the importance of eliminating deforestation. For example, the number of companies disclosing to CDP Forests almost doubled between 2017 and 2018 (see Recent News), and climate change and biodiversity loss were recognized as two of the largest risks to prosperity and stability by business leaders in the Global Risks Report 2019 put out by the World Economic Forum.
The increased commitment from the corporate sector is critical as commodity-driven deforestation is increasing in many parts of the world, abetted by recent leadership changes in Brazil, the Democratic Republic of Congo, and elsewhere, that favor industry interests over environmental protection. Assessments on the progress being made by government and businesses – such as NYDF’s 2018 Assessment – have been less than optimistic about our collective ability to address deforestation.
Needless to say, the Supply Change team anticipates that 2019 will be a busy year for corporate commitments addressing commodity-driven deforestation and we look forward to tracking these developments in the coming months!
More stories about changing supply chains are summarized below, so keep reading!
- The Supply Change team
Upcoming Events & Updates
Innovation Forum: The Future of Food 2019
Innovation Forum’s inaugural series on The Future of Food aims to identify the main areas of opportunity and innovation within the food and beverage industry. They will assess how business can react to consumer trends and expectations, whilst building sustainable, resilient agricultural supply chains. Confirmed speakers to date include Mondelez, Nestle, Unilever, Pepsi, APP, ING, Kellogg’s, General Mills, Bunge, Impossible Foods, JUST, Tyson, AB InBev, Syngenta, Sime Darby, Ferrero, Barilla, IKEA, Carlsberg and many more.
Register using the code SC15 for a 15% discount!
Register for the London Event | Register for the Chicago Event
Forests, Farms, and the Global Carbon Sink Series
Our sister initiative Ecosystem Marketplace is rolling out a new series on the role that farmers play in climate change in light of farmers’ growing presence in global climate talks, such as the Koronivia Joint Work on Agriculture. Agriculture is a major source of greenhouse gas emissions, but farmers will also be a crucial force in climate change mitigation action, through the protection and cultivation of fields, forests and farms as carbon sinks. The first and second instalments are out now!
The Landscape Standard: How will the Landscape Standard catalyze sustainability at scale?
Landscape Standard is hosting a webinar entitled, ‘How will the Landscape Standard catalyze sustainability at scale?’ They will be explaining the ambition of their exciting new initiative and how it can help businesses, investors and governments reliant on natural resources to assess and mitigate landscape scale risks and credibly communicate impact at scale. They will also provide updates on progress to date and offer plenty of opportunity for discussion.
There will be two one-hour discussions on Thursday, 7th March at 8:00 AM GMT (Asia & Europe) and 3:00 PM GMT (Europe & Americas).
Register for Asia/Europe | Register for Europe/Americas
Where's the beef?
If your New Year’s Resolution was to eat healthier for you and the planet, then the EAT-Lancet Commission has some food for thought (pun-intended!). Their report, Food in the Anthropocene: the EAT-Lancet Commission on healthy diets from sustainable food systems) outlines the optimal diet to achieve maximum health and sustainability benefits. The diet emphasizes fruits, vegetables, and whole grains, while severely limiting red meat. Although the negative environmental impact of meat consumption has been well-established, only one-eighth of companies (7 out of 56) that have made commitments to tackle cattle-driven deforestation do so by reducing or eliminating cattle products from their supply chains. In practice, this might involve fashion companies (like Stella McCartney) promising to only use vegetarian alternatives to leather, but food retailer companies have yet to make commitments to take direct action to reduce the amount of beef they sell – some (like AxFood) put the onus on customer choice and promote plant-based food products, while others (like Jerónimo Martin) reduce the amount of beef they buy from areas with high deforestation risk only. It remains to be seen if this report will inspire more companies to make more robust commitments to reduce use and find sustainable alternatives or invest in improving the sustainability of existing supply chain.
Learn more at EAT.
Fast food too slow to address deforestation
Ceres and the FAIRR Initiative recently convened a group of 80 investors, representing $6.5 trillion, to call on the fast food industry to release detailed time-bound targets and plans to reduce deforestation and improve sustainability. The group of investors – including Aviva Investors and Aegon Asset Management – were acting in response to research released at the World Economic Forum showing that for every dollar spent on fast food products, governments and charities spend two dollars to counteract the industry’s harm. Ceres’ chief executive Mindy Lubber said, “Fast food giants deliver speedy meals, but they have been super slow in responding to their out-sized environmental footprints.” The investors sent open letters to several titans, including Domino’s, Wendy’s, KFC, and Chipotle.
Learn more at Edie.net.
It pays to have a sustainable supply chain
In its annual rankings of sustainable companies, CDP bestowed A ratings to seven companies – L’Oréal, Firmenich, Beiersdorf AG, BillerudKorsnäs, Fuji Oil Holdings Inc., Tetra Pak, and UPM-Kymmene – for their progress in addressing deforestation in their supply chains. Both L’Oréal and Firmenich also received As for their progress on climate change and water security. Of the 6,800+ companies that CDP grades, only 2% made it to the top tier. What’s more, companies on the A-List outperformed the STOXX Global 1800 stock index by 5.4% since CDP began scoring companies in 2011. The brand benefits that come with having good CDP scores have driven an increase in corporate transparency, with 55% more companies disclosing to CDP in 2018 compared to 2013, and the number of companies disclosing on deforestation increased more than four-fold in the same time period.
Learn more from Sustainable Brands.
Zero deforestation commitments are up, but Papua forest cover is down
A report released this week by the Environmental Investigation Agency (EIA) found that about 56,000 hectares of dense forest were cleared in Papua, Indonesia since 2015, and that an additional 31 million hectares have been earmarked for plantation development, despite an increase in companies with zero-deforestation commitments over that period. While this outcome represents a 50% reduction in projected deforestation under business-as-usual conditions, it is clear that zero-deforestation commitments have fallen short of the mark. EIA argues that ambitious voluntary commitments such as these are hard to achieve when there are weak incentives for companies to act, and has called for binding regulatory solutions.
Learn more from Environmental Investigation Agency.