July 21, 2017

Dear Colleagues,

Countries have signed onto a number of complementary United Nations (U.N.) agreements, such as the Paris Climate Agreement, Sustainable Development Goals, and the Strategic Plan for Biodiversity, all of which directly or indirectly address deforestation. The United States’ exit from the Paris Accord and Brazil’s cuts in its environmental budget have stoked fears that national climate targets in support of the Paris Agreement (Nationally Determined Contributions (NDCs)) collectively won’t be enough to achieve global goals and have overshadowed emerging improvements in accountability and collaboration around other international goals.

Meeting in the middle

Just last week, the U.N. convened a high level forum on Sustainable Development for a state-led review of voluntary, national progress toward the 2030 Agenda for achieving the Sustainability Development Goals (SDGs). As part of a supporting workshop, Supply Change’s Senior Advisor, Stephen Donofrio, facilitated a panel on popularizing private sector reporting and achievements around the SDGs.  Already, Supply Change has come across more than a dozen companies that explicitly explain how their low/no deforestation commitments contribute to SDG 15 (life on land) and/or SDG 12 (responsible consumption and production) both of which will be officially reviewed by the U.N. in 2018. One key theme from the panel was that SDGs provide a common set of tangible goals and metrics around which companies and countries can engage and build trust. Consequently, the SDGs can simplify alignment and monitoring of public and private sector progress toward reducing deforestation against goals set at multiple scales. Integration will become easier as companies are now able to have the impacts of their SDG contributions independently verified under a new standard launched by the Gold Standard with approval from the United Nations.

Doing the math

But even if the private sector follows through with its commitments can we assume that larger national and global targets will be met when corporate actions are summed with public sector actions? Despite some setbacks, NDCs provide a useful high level framework for tracking progress with potential for incorporating private and subnational achievements (including SDGs) and communicating results. For example, check out a previous newsletter for a better idea of how corporate pledges can protect additional forest area beyond areas covered by regulation. New research—to be published on next week—explores how public-private efforts can be strengthened to achieve no/low deforestation pledges drawing from case studies in Brazil and Indonesia.

Measuring impact

At the end of the day, the devil is in the details: how can we measure the impacts of corporate commitments on the ground? New research by the International Institute for Sustainable Development grappled with this issue by evaluating 15 commonly used standards for commodity production (including several for palm oil and soybeans) against a set of newly developed core biodiversity indicators dubbed the “Biodiversity Impact Indicators for Commodity Production” or BIICP for short. The research findings were intended to support implementation of the Strategic Plan for Biodiversity. Research findings suggested that many of the commodity standards require implementation of specific practices rather than achievement of outcomes, which limited their effectiveness in measuring actual biodiversity impacts. Supply Change research suggests that annual reporting requirements for commodity certifications, such as the Roundtable on Sustainable Palm Oil (RSPO), can influence both the level of transparency and type of data companies share. Consequently, measuring impact is limited by the data available, which was the impetus for a coalition of environmental actors to create guidance on improving palm oil transparency. Supply Change aims to capture an increasing number of impact metrics such as the number of hectares of land companies control, certify, and protect. Contact us if you have suggestions for additional metrics for collection. Looking forward, improvements in transparency will strengthen the integration of global and private sector actions on deforestation (read further to learn more about other transparency initiatives).  


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

-The Supply Change team



Recent News

Don’t bank on deforestation!

At the end of last month, the Boston-based NGO, Ceres, launched its new investor guide called “Engage the Chain.” Investors can compare social and environmental risks associated with agricultural supply chains for different companies. Kroger, Dominos, Kraft Heinz and 37 other companies have been targeted by 58 shareholder resolutions relating to commodity supply chain sustainability since 2011. The release of the guide is well timed. HSBC, one of the first banks to publish an Agricultural Commodities Policy, has taken action—it has become one of the first banks to encourage a third party investigation into the alleged deforestation impacts of its portfolio. Ideally, investors would use the guide proactively and reduce the need for retroactive investigations into unsustainable supply chain practices.


Wood you cut it out?

A recent sustainability scorecard of the wood purchasing habits of 128 companies operating in the UK, found that half of companies performed well or at least had started reporting sustainability progress. Larger multinationals and construction companies, in particular, generally received high scores. In contrast, the remaining half of companies poorly communicated their sustainability efforts or failed to disclose entirely. Despite progress logged since the previous scorecard, the World Wildlife Fund’s Forest Campaign concluded that many companies will need to transform their approach if the campaign’s 2020 target for the UK to establish a sustainable timber market is to be met. Supply Change already tracks 55 corporate members of this campaign.


1 for the $ or 2 for the show?

According to a recent survey of 131 Italian food companies, companies pursuing supply chain traceability were more likely to be motivated by potential improvements in access to information, safety, and quality management than by financial returns. University of Milan researchers also found that companies pursuing commodity certification as a means of maximizing profits tended to have achieved lower levels of supply chain traceability than those seeking sustainability improvements. Downstream buyers can benefit from the transparency afforded from higher levels of commodity supply chain traceability, because this can make it easier to protect their corporate reputation and follow the law. European regulation already requires all food and feed business operators to provide traceability evidence of where foods, feeds, and animals come from.
Read more at Sustainable Brands



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.


Sequestration approximation

Increasingly, companies are reporting their GHG emissions, reductions, and offsets, but neglect to quantify GHG emissions from deforestation as well as the loss of future forest capacity to sequester carbon.  Standardized accounting for the GHG impacts of land use doesn’t exist yet, but some plantation companies, like New Britain Palm Oil and Indofood Agri Resources, have taken initiative and recorded their GHG emissions associated with land clearance (along with methane and fertilizer-based nitrous oxide). Downstream sectors are also integrating these concepts into procurement; the Swiss consulting firm Quantis has convened a coalition of downstream companies and NGOs to create a framework for land use GHG accounting, which could be released as early as next month.
Learn more about New Britain Palm Oil
Learn more about Indofood Agri Resources


Citing your sources

Despite calls for greater supply chain transparency, it’s uncommon for agricultural companies to post information on their website about their suppliers of commodities most associated with tropical deforestation. However, the Singapore-based palm oil giant, Musim Mas, publishes a list of the palm oil mills (and parent companies) from which it supplies. The company also provides a simple online form for all stakeholders to lodge detailed complaints related to non-compliance with RSPO or company sustainability requirements. Related company responses and outcomes are tracked publicly on the company’s public grievance mechanism website. Musim Mas also commits to drop repeat non-compliant suppliers, but is candid that dialogue is often a better strategy for achieving impact.
Read more about Musim Mas

Forest Trends CDP WWF GEF UNEP