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February 2012 | Paul Snell
Companies need to urgently consider their ‘forest
footprint’ and take action to prevent deforestation, a report has urged.
According to the Forest Footprint Disclosure Annual Review 2011, businesses should see
the value of reporting on their footprint - which is made up of their exposure
to five ‘forest risk commodities’; timber, soy, cattle products, palm oil and
biofuels – to work with suppliers and boost the resilience of their supply
These commodities represent a potential regulatory,
reputational and supply risk because deforestation often occurs in order to
make way for these more lucrative fields of business.
“More companies need to wake up to the
risks deforestation presents in their portfolios,” said Andrew Mitchell,
chairman of Forest Footprint Disclosure. “Who wants to finance the destruction
of life on earth, especially when it undermines wealth creation itself?"
The review pointed out the benefit of
understanding this area of the supply chain in more detail. “Building closer
ties through the value chain may improve the quality and price of products and
help secure supply and reduce price volatility during crises,” it said.
It also highlighted the potential
reputational damage to brands, such as Mattel which was targeted by campaign group Greenpeace over claims about the company’s
sourcing of packaging for Barbie
The toy manufacturer subsequently published a sustainable sourcing plan and targets for its packaging.
This year’s review, published today, names
the sector leaders (a full list can be found below) – those organisations that
are best at disclosing their supply chain activity in this area.
“Given the growing concern around security
of supply for commodities in the coming decades of resource scarcity, the
disclosure process offers companies space to work with their suppliers and
customers to identify potential problems in a timely manner, and help to improve
the resilience of their supply chain,” said Theodore Roosevelt IV, managing
director at Barclays Capital and chairman of the Pew Center on Global Climate Change.
Footprint Disclosure – Sector Leaders 2011
Basic minerals: Stora Enso
Clothing, accessories and footwear: Nike
Food and drug retailers: Sainsbury's
Food products and soft drinks: Nestlé
General retailers: Marks & Spencer
Industrials, construction and autos: Dalhoff Larsen & Horneman
Personal care and household goods: Kimberly-Clark
Travel and leisure: British Airways
Farming and fishing: Grupo André Maggi
Oil and gas: Greenergy International
Utilities: Drax Group