July 9, 2019

Dear Colleagues,

The tropics lost an area of primary rainforest the size of Belgium last year, according to the latest data from Global Forest Watch. Although forest loss declined in 2018 compared with 2017 and 2016, the amount of forest cover lost in 2018 was still above the eighteen-year average and represents the fourth-highest annual deforestation rate since record keeping began in 2001.

Although the largest hectare loss was in Brazil (where, troublingly, forest loss has accelerated to record levels in May and June), the largest deforestation percentage increase was in Ghana, where primary forest loss soared by sixty percent between 2017 and 2018. Other West African countries, particularly Cote d’Ivoire and Liberia, also saw significant increases in annual forest loss by 26% and 12%, respectively. Illegal gold mining and logging are believed to be the primary culprits of the increased deforestation in Ghana, but the expansion of cocoa farming is also believed to have contributed to the increase (although the Ghanaian Cocoa Board’s chief executive disputed this). 

Cocoa plants thrive in full sun and in the shade, so cocoa is often planted beneath the forest canopy. This makes it extremely difficult for satellite-based monitoring systems to detect where the understory has been converted for cocoa production, so the exact degree to which cocoa production has driven the rise in deforestation in Ghana is unclear. A 2017 report by Mighty Earth estimated that around one-fourth of deforestation – much of it in protected areas – in Ghana between 2001 and 2014 was attributable to cocoa production. The situation in Cote d’Ivoire, where 40% of deforestation occurs in protected areas, is similar, and both countries have witnessed the rise of “illegal” towns based around cocoa production inside protected areas. A majority – 65% – of the world’s cocoa is grown in West Africa, while the remaining 30% is grown in the tropics of Latin America and Asia.

However, emerging monitoring technologies may be able to shed some light (pun intended) on the issue: Scottish company Ecometrica is using drones equipped with Lidar technology to create three-dimensional maps of forest landscapes. The Lidar drones are currently surveying the impacts of climate change, land use, and invasive species in the forests of western Scotland, but will soon venture to West Africa, where they will identify where cocoa farmers have thinned the forests. This technology will not only help forestry authorities in Ghana map where cocoa farms are encroaching on national parks, but is also being marketed to cocoa companies so they can track deforestation in their cocoa supply chains.   

Palm oil, cattle, soy, and timber and pulp are considered to be the “big four” commodities that drive deforestation – and are therefore the primary focus of Supply Change’s tracking of commitments for sustainable commodity sourcing and production – but both governments and the private sector have become increasingly aware of cocoa’s role as a significant driver of deforestation in the tropics.

The World Cocoa Foundation’s Cocoa and Forests Initiative illustrates this growing recognition.  It was launched in November 2017 and joins the governments of Ghana and Cote d’Ivoire and 32 of the world’s most prominent chocolate and cocoa companies (including – to name just a few – Unilever, Cargill, Mars, Nestlé, Mondeléz, and Hershey) for the purpose of ending deforestation from cocoa production. In March, the members of the Cocoa and Forests Initiative published action plans to address deforestation from cocoa, which address forest protection and restoration, sustainable cocoa production, farmer livelihoods, and engagement with local .

Mars, for instance, released the names of its Tier 1 cocoa suppliers along with its plans to increase traceability to the farm level by 2025. The Cocoa and Forests Initiative is a novel approach to sustainable commodity production. Unlike multi-stakeholder platforms for other commodities, such as palm oil (Roundtable for Sustainable Palm Oil, Indonesian Sustainable Palm Oil, etc.), the Cocoa and Forests Initiative’s approach was not only endorsed by the private sector, but also by governments from top cocoa-producing countries. 

Accordingly, Supply Change is expanding our research to include company commitments and activities in their cocoa supply chains, in addition to timber and pulp, palm oil, soy, and cattle.If developments such as the Cocoa and Forests Initiative are any indication, companies are increasingly recognizing the importance of sourcing sustainable, deforestation-free cocoa and we expect to see growing numbers of companies making commitments that target cocoa. 

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

- The Supply Change team 




Upcoming Events and Updates

Latin America Sustainable Beef Vision Summit

Sao Paolo, Brazil | July 10-12, 2019

Sustainable livestock stakeholders including national roundtables for sustainable beef from Argentina, Brazil, Paraguay, Colombia, and Mexico and key representatives from the sustainable livestock stakeholder sector will share lessons learned and build consensus on the key messages and priorities that will guide the Latin American beef sector into 2020 and beyond. More details here

Supply Change is attending! You can check out the presentation of our upcoming report, Commitments in Country: Companies, Cattle, & Commitments that Count in Paraguay, 2019 in the session on Global Market Trends – Export Markets at 12:05pm on July 10.

Planning for Success: 2020 and Beyond
July 25, 2019

Speakers: AFi, Forest Trends, and Innovation Forum

Introducing a new collaboration between Supply Change & AFi, this webinar will set the scene for challenges around reporting commitments, the challenges companies are having along the way and planning for success. The webinar may feature a potential corporate guest!

Additional details will be provided closer to the date.




Recent News

Trouble with traceability: JBS tarnished by supplier’s illegal deforestation  

A joint investigation by journalists at The Guardian, Repórter Brasil, and the Bureau of Investigative Journalism found that farms owned by Brazilian company AgroSB Agropecuária SA have been illegally clearing protected rainforest to expand cattle pasture in the Brazilian state of Pará. Brazilian meat processing company, JBS, was also called out by the investigation because hundreds of heads of cattle that they bought from AgroSB were reared on the farms accused of illegal deforestation.  The cattle were transferred from these farms to other AgroSB farms to be fattened before they were sold to JBS for slaughter.  Though JBS has increased its scrutiny of direct suppliers, it has not yet been able to guarantee compliance from indirect suppliers. This is a recurring problem for the cattle industry in Brazil and one that highlights a need for more thorough traceability systems; cattle are owned by several ranches over their lifetime (breeding, rearing, fattening) and current regulations only require slaughterhouses to ensure that deforestation did not occur on the ranch from which the cattle was purchased.

Learn more at The Guardian.


Cargill puts a price tag on deforestation-free soy

In a letter sent to soy farmers in Brazil, Cargill announced that they will spend USD $30 million to fund new ideas to end deforestation in Brazil while also assuring farmers that they will not support a soy moratorium in the Cerrado similar to the one in effect in the Amazon. This comes on the heels of an announcement Cargill made last month in which they admitted that they and the rest of the industry will not meet their commitments to eliminate deforestation from their (soy and other commodity) supply chains by the 2020 deadline. A major obstacle to tackling deforestation for Cargill and other companies has been due to a lack of traceability in the complicated commodity supply chains. The news of Cargill’s latest strategy to address deforestation was met with criticism from environmental groups; Glenn Hurowitz from Mighty Earth dismissed Cargill’s plan as being unambitious and ineffective.   

Learn more at Grist.


Join the club: European palm oil importers also failing to meet commitments

European palm oil importers are not on track to meet their commitments to source and sell products that are deforestation-free, according to analysis by the Palm Oil Transparency Coalition (POTC). The POTC is a group made up of prominent European retailers, including Ahold Delhaize, Marks and Spencer, Casino, Boots, Waitrose, and others. A major obstacle to achieving their commitments is a lack of traceability. Although nearly all (98%) of palm oil imported into Europe can be traced to the mill in which it was processed, only about a third can be traced to the plantation where it was grown.  Importers also noted that sustainable palm oil was a higher priority for food manufacturers and retailers compared to those in personal care and household product industries.

Forest Trends CDP WWF GEF UNEP